LSBGHORZ

AGENDA MEMORANDUM

 

 

MEETING DATE:               November 22, 2010

 

FROM:                                   Jay M. Evans, City Manager

                                               

SUBJECT:                              Enterprise Performance Incentive Program

 

 

Staff Recommendation:

Staff recommends approval of the Enterprise Performance Incentive Program.

 

Analysis:

The changes in the U.S. economy over the last three years have required local governments to re-evaluate priorities, business models, service levels, retirement plans, compensation systems, and methods of service delivery.  The City of Leesburg has been a leader in adapting to the “new normal” and the results have been realized in our financial reports and improved bond ratings.  Leesburg is better positioned than many local governments because of our willingness to make difficult but timely changes.  Simply put, we have been responsive and responsible.

 

Dedication to organizational performance at the employee level is pervasive in the private sector.  Corporate compensation systems are frequently tied to organizational performance, giving each and every employee a stake in company’s success or failure.  This also motivates employees to provide top-quality service in order to ensure future sales.  The more satisfied the customer, the more business for the company, and the more secure the employee’s financial future.

 

Government, on the other hand, has been slow to adopt many of corporate America’s successful practices.  The claim has always been that “government is different,” “government doesn’t exist to make a profit” and “that won’t work here.”  Frequently it is time itself that proves these notions wrong, with defined-benefit pension plans being a perfect example.  Corporate America realized many years ago that these plans were not sustainable, but governments are just now coming to that conclusion themselves.  Organizational performance is proving to be a similar issue, in that local government can no longer sustain a business model that ignores economic realities and rewards employees without regard to the success or failure of the organization.  It is time to change.

 

Giving government employees a stake in the performance of the organization should be part of the new way government operates.  Performance is not defined as simply the bottom line, but also the impact the organization has had on the customer (the ratepayer or taxpayer).  Shouldn’t government employees care about rate increases or increases in taxes?  Shouldn’t they care about the financial health of the organization?   Shouldn’t they care about both the short-term and long-term consequences of staffing, benefit levels, debt levels, life-cycle costs, changes in revenues, expenditures, and so forth?  Should we be surprised at an unsatisfactory outcome when our system provides no incentive to the front-line employee to care about the overall performance of the organization?  It can be different.

 

Proposed herein is a system that should increase interest in and responsiveness to Leesburg’s success as an organization.  A change is proposed to the traditional model wherein Leesburg has granted across-the-board merit increases (subject to the employee’s personal performance evaluation) to all business units equally.  For the purpose of this explanation, the business units (or “funds”) such as the General Fund, Water, Wastewater, Electric, Gas, Stormwater, etc. will all be referred to as “enterprises.” 

 

To begin, the ability of an employee to receive a bonus or a raise will be tied to the performance of the enterprise in which they work.  Enterprise performance will be evaluated utilizing adopted methodologies (“Enterprise Financial Performance Tests,” attached hereto).   The methodologies are empirical enough to evaluate the enterprise’s financial health from the past fiscal year, current fiscal year, and the projected fiscal year by way of analysis using the 3rd quarter unaudited financials.  The process is flexible enough to allow the Commission to consider anomalies that may have affected financial performance, known threats to future performance, or other conditions that could affect the desirability of providing financial incentives in a given year.  Increases in taxes or utility rates are factors that could negatively impact the incentives, ensuring the customer is the top priority in the program.

 

Under the Enterprise Performance Incentive Program, each enterprise will be subjected to a Financial Performance Test.  The results of this test will determine eligibility for incentives (bonuses or raises) for the employees in that enterprise, and will also determine the amount of funding available for the incentive.  The amount of funding available is a function of financial performance, but would be limited to no more than 7% of payroll.  This amount would be known as the Potential Bonus/Raise, or “PBR”.  Depending on performance, the PBR will be distributed either as bonuses or raises.  Raises will be given only if the performance appears (as demonstrated in the analysis) to be sustainable.  Questionable sustainability will result in one-time bonuses only.  This will help to combat the adverse impact of recurring expenses when sustainability is not assured.

 

For those departments that have not adopted a Skill-Based Pay plan (only Electric has), the incentive will be split into a 4% Enterprise Performance Incentive effective October 1st, and up to 2% would be used as a Personal Performance Evaluation Merit Incentive.  The Personal Performance Evaluations will still be conducted on the employee’s employment anniversary date, and the employee will still have to “exceed expectations” on their evaluation to be eligible for the Merit Incentive.  Sustainability, as demonstrated in the Financial Performance Test, will determine whether the incentives are distributed as bonuses or raises. 

 

For those departments utilizing a Skill-Based Pay plan (again, only Electric has one so far), the incentives are not distributed in the above format, but instead become the financial reward for progress through the Skill-Based Pay plan.  Sustainability still determines the method of distribution (bonus vs. raise), and the entire amount of the PBR is available for use.  Timing is also October 1st

 

Based on the attached Enterprise Financial Performance Tests, only Electric, Gas, Wastewater, Stormwater, and Solid Waste qualify for Enterprise Performance Incentives in FY 2010-2011.  All other enterprises, including the General Fund, will have to improve their financial position before incentives will be warranted.

 

While most Leesburg employees will not be eligible for Performance Incentives this year, all employees will have the motivation to improve efficiency and further the goals of the organization for next year.  Additionally, this system will allow the City to reward those employees whose personal and enterprise performance currently merit a financial reward.

 

Lastly, the applicability of this program on employees covered under collective bargaining agreements is subject to bargaining.

 

Options:        

1.  Approve the resolution as presented; or

2.  Other such action as the Commission may deem appropriate.

 

Fiscal Impact:

The most conservative estimate (highest possible amount) of financial impact is $304,125 across all departments that qualify (Electric, Gas, Wastewater, Stormwater, and Solid Waste).  Sustainability has already been considered as part of the Enterprise Performance Test, and determines whether incentives are distributed as raises or bonuses.

 

Submission Date and Time:    11/23/10 8:58 AM____

 

 

 

 

Department: Administration

Prepared by:  Jay M. Evans, City Manager

Attachments:  Yes__X__   No ______

Advertised:   __ ___Not Required _X____                     

Dates:   ____________________________                     

Newspapers:_______________________                                                    

 

 

Reviewed by: ________

Finance  Dept. __________________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________

 

Account : _____________________

No. Project No.  _______________

WF No. ______________________

Budget : ______________________   

Available _____________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Enterprise Performance Evaluation – General Fund

 

Metrics:

Cash on hand as of September (UNAUDITED)                                                     $  7,004,675

Reserve Policy Required Balance                                                                              $  4,816,451

Change in Unrestricted Cash from 2008 to 2009                                                  $  2,213,760

Change in Unrestricted Cash from 2009 to September 2010 (estimated) $      (42,100)

10% of Change in Unrestricted Cash                                                                        $           N/A

2010 Budgeted Payroll                                                                                                   $20,456,200

7% of payroll                                                                                                                      $  1,431,934

5% of payroll                                                                                                                      $  1,022,810

Change in Cash expressed as percent of payroll  2008 to 2009                                10.82%

Change in Cash Percent of payroll  2009 to 2010                                                     (0.21)%

Net income from 2008-2009                                                                                        $  1,705,884

Projected net income for 2009-2010                                                                        $  1,000,000

 

Enterprise performance test

 

1         There has been no millage rate increase in FY 2009-2010.

2         Both FY 2008-2009 and FY 2009-2010 have positive net income ($1,705,884 and $1,000,000 respectively).

3         Cash reserve requirement has been met in both the previous fiscal year and the current fiscal year.             

4         Declining revenues required workforce reduction in FY 2010-2011 budget.  Although Fund Balance is expected to be positive at the ’09-’10 fiscal year end, the inability of the Water Fund to make its dividend payment to the General Fund ($547,688) may lead to a negative contribution to unrestricted cash ($42,100).  Known future threats include continued decline of recurring revenues, including ad valorem proceeds.  Further erosion of revenues threatens service levels of critical operations including public safety. Additionally, pension costs continue to escalate and deprive the General Fund of needed resources.  Debt service associated with the pay back of the loan for Magnolia Townhomes will begin in FY 2012-2013 totaling $979,000 with the final payment being made in FY 2016-2017.  Declining ad valorem proceeds in the respective CRA’s may eventually shift debt service burden to the General Fund.   

5         This test does not apply (unrestricted cash does not exceed 150% of required balance).

6         10% of prior year contribution to unrestricted cash results in a negative contribution.  Therefore, there is no “Potential Bonus or Raise”, or “PBR”.

7         This test does not apply as PBR would be a negative number.

8         This test does not apply as PBR would be a negative number.

9         The fund enjoyed an increase in unrestricted cash of $2,213,760 in 2008-2009, however in 2009-2010 the change in unrestricted cash is expected to be negative. 

10     This test does not apply as PBR would be a negative number.

 

 

Bottom Line:

The General Fund fails performance tests 4, 6, and 9.  The General Fund does not qualify for enterprise performance incentives.

 


Enterprise Performance Evaluation - Electric

Metrics:

Cash on hand as of September (UNAUDITED)                                                     $12,535,840

Reserve Policy Required Balance                                                                              $  9,022,196

Change in Unrestricted Cash from 2008 to 2009                                                  $     594,871

Change in Unrestricted from 2009 to September 2010                                    $  2,030,049

10% of Change in Unrestricted Cash                                                                        $     203,004

2010 Budgeted Payroll                                                                                                   $  3,237,243

7% of payroll                                                                                                                      $     226,607

5% of payroll                                                                                                                      $     161,862

Change in Cash expressed as percent of payroll  2008 to 2009                                18.38%

Change in Cash Percent of payroll  2009 to 2010                                                           62.71%

Net income from 2008-2009                                                                                        $     976,033

Projected net income for 2009-2010                                                                        $  1,500,000

 

 

Enterprise performance test

 

1.       There has been no base rate increase in FY 2009-2010 (BPCA and CPI excluded)

2.       Both FY 2008-2009 and FY 2009-2010 have positive net income ($976,033 and $1,500,000 respectively).

3.       Cash reserve requirement has been met in both the previous fiscal year and the current fiscal year.             

4.       The dividend payment to the General Fund was paid in FY 2008-2009 and 2009-2010.

5.       The contribution to renewal and replacement funds was increased from $500,000 to $1,000,000 per year.  The current balance of $1,846,000 is adequate to cover projected R&R expenditures of $600,000 reflected in the 2010-11 capital plan.  Net excess contributions to R&R are expected to increase by $400,000.  Finance is working with the Electric Department to determine the timing and capital requirements of future years. 

6.       This test does not apply.  The cash balance does not exceed 150% of the reserve requirement.

7.       10% of prior year contribution to unrestricted cash is $203,005, the use of which is limited to 7% of payroll, or $226,607.  This is the “Potential Bonus or Raise”, or “PBR”.

8.       This test does not apply.  The PBR is not less than 5% of payroll.

9.       The PBR of $203,005 is greater than 5% of payroll, or $161,862, and so the amount may be distributed as raises (topped-out employees will receive a one-time bonus).

10.   The fund has enjoyed increases in unrestricted cash of $594,871 and $2,030,049 in 2008-2009 and 2009-2010 respectively.  Based upon the best information available at this time, the financial performance of this fund is expected to remain positive.

 

Bottom Line:

The Electric Fund passes the performance test and qualifies for enterprise performance incentives to be distributed in the form of raises totaling no more than $203,005.  The Electric Department intends to implement the Skill Based Pay system, which is estimated to cost $141,544.  The difference between what would be authorized under the performance incentive program and what the department intends to use is $61,511.


Enterprise Performance Evaluation - Gas

Metrics:

Cash on hand as of September (UNAUDITED)                                                     $  6,538,610

Reserve Policy Required Balance                                                                              $  1,231,427

Change in Unrestricted Cash from 2008 to 2009                                                  $     658,619

Change in Unrestricted from 2009 to September 2010                                    $  2,841,200

10% of Change in Unrestricted Cash                                                                        $     284,120

2010 Budgeted Payroll                                                                                                   $  1,009,131

7% of payroll                                                                                                                      $       70,639

5% of payroll                                                                                                                      $       50,457

Change in Cash expressed as percent of payroll  2008 to 2009                                65.27%

Change in Cash Percent of payroll  2009 to 2010                                                    281.55%

Net income from 2008-2009                                                                                        $  1,281,908

Projected net income for 2009-2010                                                                        $  1,800,000

 

 

Enterprise performance test

 

1.       There has been no base rate increase in FY 2009-2010 (CPI excluded)

2.       Both FY 2008-2009 and FY 2009-2010 have positive net income ($1,281,908 and $1,800,000 respectively).

3.       Cash reserve requirement has been met in both the previous fiscal year and the current fiscal year.             

4.       The dividend payment to the General Fund was paid in FY 2008-2009 and 2009-2010.

5.       The Gas utility has provided funding for various projects around the City and the financial performance has not been impacted by the funding of those projects.  The fund has strong performance, low rates for the customers, and no known threats.

6.       The cash balance of $6,538,610 exceeds the required balance of $1,231,427 by greater than 150%.  The use of the excess is limited by 7% of payroll, or $70,639.  This is the “Potential Bonus or Raise”, or “PBR”.

7.       This item does not apply since cash exceeds 150% of required balance (see above).

8.       This item does not apply since PBR is greater than 5% of payroll.

9.       The PBR of $70,639 is greater than 5% of payroll, or $50,457, and so the amount may be distributed as raises (topped-out employees will receive a one-time bonus).

10.    The fund has enjoyed increases in unrestricted cash of $658,619 and $2,841,200 in 2008-2009 and 2009-2010 respectively.  Based upon the best information available at this time, the financial performance of this fund is expected to remain positive.

 

Bottom Line:

The Gas Fund passes the performance test and qualifies for enterprise performance incentives to be distributed in the form of raises totaling no more than $70,639.  The most conservative projection of the actual cost of raises to be distributed is $68,000.

 

 


Enterprise Performance Evaluation - Water

Metrics:

Cash on hand as of September (UNAUDITED)                                                     $  2,146,743

Reserve Policy Required Balance                                                                              $  1,847,281

Change in Unrestricted Cash from 2008 to 2009                                                  $     495,880

Change in Unrestricted from 2009 to September 2010                                    $(1,345,076)

10% of Change in Unrestricted Cash                                                                        $           N/A

2010 Budgeted Payroll                                                                                                   $  1,842,262

7% of payroll                                                                                                                      $     128,958

5% of payroll                                                                                                                      $       92,113

Change in Cash expressed as percent of payroll  2008 to 2009                                26.92%

Change in Cash Percent of payroll  2009 to 2010                                                    (73.01)%

Net income from 2008-2009                                                                                        $     410,710

Projected net income for 2009-2010                                                                        $   (700,000)

 

Enterprise performance test

 

1.       A 2-step base rate increase was approved on October 12, 2009 for FY 2009-2010 and  FY 2010-2011.  The rate increase was required to combat the impact of depreciation on net income due to the deployment of new assets.  City Commission discussion is required to determine the extent to which the base rate increase should impact the enterprise performance incentive.

2.       FY 2008-2009 has positive net income of $410,710 and FY 2009-2010 is projected to be a net loss of approximately $700,000.

3.       Cash reserve requirement has been met in both the previous fiscal year and the current fiscal year.             

4.       The dividend payment to the General Fund was paid in FY 2008-2009; but based on the projected net loss of $700,000 the FY 2009-2010 dividend contribution of $547,688 will be refunded to the Water fund from the General Fund per the requirements of the cash reserve policy.

5.       Water utility revenues were less than expected by approximately $400,000 due to an abnormally wet winter season.  The utility has done its best to control and reduce its variable costs.  However, capital projects which include the Hwy 441/27 relocation and the unexpected repair costs of $211,115 related to CR 468 have placed a heavier burden on unrestricted cash than in the past.  CUP requirements also placed an additional burden on unrestricted cash with the funding of $483,200 to continue with the alternative water supply (Coquina Coast Project). 

6.       This item does not apply.  Unrestricted cash does not exceed 150% of required cash balance.

7.       10% of prior year contribution to unrestricted cash results in a negative contribution.  Therefore, there is no “Potential Bonus or Raise”, or “PBR”.

8.       This item does not apply as PBR would be a negative number

9.       This item does not apply as PBR would be a negative number.

10.   This test is not required as there is no PBR.

 

Bottom Line:

The Water Fund fails performance tests 2,4, 5, and 7 and does not qualify for enterprise performance incentives. 

 

 


Enterprise Performance Evaluation - Wastewater

Metrics:

Cash on hand as of September (UNAUDITED)                                                     $  2,571,390

Reserve Policy Required Balance                                                                              $  2,381,850

Change in Unrestricted Cash from 2008 to 2009                                                  $     373,072

Change in Unrestricted from 2009 to September 2010                                    $     362,809

10% of Change in Unrestricted Cash                                                                        $       36,281

2010 Budgeted Payroll                                                                                                   $  2,220,342

7% of payroll                                                                                                                      $     155,424

5% of payroll                                                                                                                      $     111,017

Change in Cash expressed as percent of payroll  2008 to 2009                                16.80%

Change in Cash Percent of payroll  2009 to 2010                                                      16.34%

Net income from 2008-2009                                                                                        $  1,146,112

Projected net income for 2009-2010                                                                        $     700,000

 

 

Enterprise performance test

 

1.       There has been no base rate increase in FY 2009-2010 (CPI excluded)

2.       Both FY 2008-2009 and FY 2009-2010 have positive net income ($1,146,112 and $700,000 respectively).

3.       Cash reserve requirement has been met in both the previous fiscal year and the current fiscal year.             

4.       The dividend payment to the General Fund was paid in FY 2008-2009 and 2009-2010.

5.       The fund’s margin is relatively tight, but stable and sustainable.  Capital expenditures appear more than appropriate.  Threats include regulatory changes and a sustained waiver of impact fees.  Neither of which are immediate cause for concern.

6.       Cash balance does not exceed 150% of required cash balance.

7.       10% of prior year contribution to unrestricted cash is $36,281, the use of which is limited to 7% of payroll, or $155,424.  The $36,281 is the “Potential Bonus or Raise”, or “PBR”.

8.       PBR is less than 5% of payroll, and so it is available to be distributed as bonuses.

9.       This item does not apply since PBR is less than 5% of payroll.

10.   Margins are tight in this fund, but performance is expected to remain positive and the fund should not be adversely impacted by distribution of the PBR as one-time bonuses.

 

Bottom Line:

The Wastewater Fund passes the performance test and qualifies for enterprise performance incentives to be distributed in the form one-time bonuses totaling no more than $36,281 (or about 1.6% of payroll).

 

 

 

 


Enterprise Performance Evaluation - Communications

Metrics:

Cash on hand as of September (UNAUDITED)                                                     $     611,809

Reserve Policy Required Balance                                                                              $     300,218

Change in Unrestricted Cash from 2008 to 2009                                                  $       74,834

Change in Unrestricted from 2009 to September 2010                                    $     (11,591)

10% of Change in Unrestricted Cash                                                                        $           N/A

2010 Budgeted Payroll                                                                                                   $     315,176

7% of payroll                                                                                                                      $       22,062

5% of payroll                                                                                                                      $       15,759

Change in Cash expressed as percent of payroll  2008 to 2009                                 23.74%

Change in Cash Percent of payroll  2009 to 2010                                                       (3.68)%

Net income from 2008-2009                                                                                        $       26,333

Projected net income for 2009-2010                                                                        $     137,000

 

 

Enterprise performance test

 

1.       There has been no base rate increase in FY 2009-2010 (CPI excluded)

2.       Both FY 2008-2009 and FY 2009-2010 have positive net income ($26,333 and $137,000 respectively).

3.       Cash reserve requirement has been met in both the previous fiscal year and the current fiscal year.             

4.       The cost allocation payment to the General Fund was paid in FY 2008-2009 and 2009-2010.

5.       Although the cash reserve requirement has been met according to the terms of the cash reserve policy the utility experienced a negative contribution to unrestricted cash.  The projected annual revenue that will be generated from the additional customer connections provided by FY ’09-’10 capital expenditures has already been included in the FY 2010-2011 budget.  The Communications utility requires close review due to their debt service and capital requirements related to their network infrastructure. 

6.       This item does not apply as cash balance does not exceed 150% of required cash.

7.       10% of prior year contribution to unrestricted cash results in a negative contribution.  Therefore, there is no “Potential Bonus or Raise”, or “PBR”.

8.       This item does not apply as PBR would be a negative number.

9.       This item does not apply as PBR would be a negative number.

10.   This test is not required as there is no PBR.

 

Bottom Line:

The fund fails performance tests 5 and 7, and does not qualify for enterprise performance incentives.

 

 

 

 

 

 

 


Enterprise Performance Evaluation – Solid Waste

Metrics:

Cash on hand as of September (UNAUDITED)                                                     $  1,226,909

Reserve Policy Required Balance                                                                              $     921,000

Change in Unrestricted Cash from 2008 to 2009                                                  $     164,712

Change in Unrestricted from 2009 to September 2010                                    $     696,937

10% of Change in Unrestricted Cash                                                                        $       69,694

2010 Budgeted Payroll                                                                                                   $     844,242

7% of payroll                                                                                                                      $       59,097

5% of payroll                                                                                                                      $       42,212

Change in Cash expressed as percent of payroll  2008 to 2009                                19.51%

Change in Cash Percent of payroll  2009 to 2010                                                      82.55%

Net income from 2008-2009                                                                                        $    428,899

Projected net income for 2009-2010                                                                        $    700,000

 

 

Enterprise performance test

 

1.       There has been no base rate increase in FY 2009-2010 (CPI excluded)

2.       Both FY 2008-2009 and FY 2009-2010 have positive net income ($428,899 and $700,000 respectively).

3.       Cash reserve requirement has been met in both the previous fiscal year and the current fiscal year.             

4.       The dividend payment to the General Fund was paid in FY 2008-2009 and 2009-2010.

5.       The Solid Waste utility has achieved significant financial improvement over the previous fiscal year. The utility is now compliant with the cash reserve policy and has fully paid back the $600,000 loan from the Gas utility.

6.       This step does not apply.  Cash balance does not exceed 150% of required reserve.

7.       10% of prior year contribution to unrestricted cash is $69,694, the use of which is limited to 7% of payroll, or $59,097.  This is the “Potential Bonus or Raise”, or “PBR”.

8.       This step does not apply, as PBR is greater than 5% of payroll.

9.       The PBR of $59,097 is greater than 5% of payroll, or $42,212, and so the amount may be distributed as raises (topped-out employees will receive a one-time bonus).

10.   The fund has enjoyed increases in unrestricted cash of $164,712 and $696,937 in 2008-2009 and 2009-2010 respectively.  Based upon the best information available at this time, the financial performance of this fund is expected to remain positive and can support the PBR.

 

Bottom Line:

The Solid Waste Fund passes the performance test and qualifies for enterprise performance incentives to be distributed in the form of raises totaling no more than $59,097.  The most conservative projection of the actual cost of raises to be distributed is $49,000.

 

 

 


Enterprise Performance Evaluation – Stormwater

Metrics:

Cash on hand as of September (UNAUDITED)                                                     $  1,638,820

Reserve Policy Required Balance                                                                              $     587,584

Change in Unrestricted Cash from 2008 to 2009                                                  $     264,452

Change in Unrestricted from 2009 to September 2010                                    $     372,472

10% of Change in Unrestricted Cash                                                                        $       37,247

2010 Budgeted Payroll                                                                                                   $     166,747

7% of payroll                                                                                                                      $       11,672

5% of payroll                                                                                                                      $         8,337

Change in Cash expressed as percent of payroll  2008 to 2009                              158.59%

Change in Cash Percent of payroll  2009 to 2010                                                    223.38%

Net income from 2008-2009                                                                                        $    328,120

Projected net income for 2009-2010                                                                        $    200,000

 

 

Enterprise performance test

 

1.       There has been no base rate increase in FY 2009-2010.

2.       Both FY 2008-2009 and FY 2009-2010 have positive net income ($328,120 and $200,000 respectively).

3.       Cash reserve requirement has been met in both the previous fiscal year and the current fiscal year.             

4.       The dividend payment to the General Fund was paid in FY 2008-2009 and 2009-2010.

5.       The Stormwater utility is a special revenue fund and is required to be converted to an enterprise fund in FY 2010-2011.  The fund in its current financial position meets the city’s cash reserve policy when applied. With this in mind and the impending conversion of this fund meets the requirements for a “Potential Bonus or Raise”, or “PBR”.

6.       Unrestricted cash of $1,638,820 exceeds the required balance of $587,584 by more than 150%.  Availability of the amount over the required balance is limited to 7% of payroll, or $11,672.  This is the “Potential Bonus or Raise”, or “PBR”.

7.       Does not apply (see 6 above).

8.       Does not apply as the PBR is greater than 5% of payroll.

9.       The PBR of $11,672 is greater than 5% of payroll, or $8,337, and so the amount may be distributed as raises (topped-out employees will receive a one-time bonus).

10.   The fund has enjoyed increases in unrestricted cash of $264,452 and $372,472 in 2008-2009 and 2009-2010 respectively.  Based upon the best information available at this time, the financial performance of this fund is expected to remain positive.

 

Bottom Line:

The Stormwater Fund passes the performance test and qualifies for enterprise performance incentives to be distributed in the form of raises totaling no more than $11,672.  The most conservative projection of the actual cost of raises to be distributed is $9,300.

 

 


Enterprise Performance Evaluation – Building Fund

Metrics:

Cash on hand as of September (UNAUDITED)                                                     $      (39,491)

Reserve Policy Required Balance                                                                              $      111,775

Change in Unrestricted Cash from 2008 to 2009                                                  $      (47,689)

Change in Unrestricted from 2009 to September 2010                                    $        (4,489)

10% of Change in Unrestricted Cash                                                                        $           N/A

2010 Budgeted Payroll                                                                                                   $     314,984

7% of payroll                                                                                                                      $       22,049

5% of payroll                                                                                                                      $       15,749

Change in Cash expressed as percent of payroll  2008 to 2009                                (15.14)%

Change in Cash Percent of payroll  2009 to 2010                                                        (1.43)%

Net income from 2008-2009                                                                                        $     (44,980)

Projected net income for 2009-2010                                                                        $       (2,000)

 

 

Enterprise performance test

 

1.       There has been no base rate increase in FY 2009-2010.

2.       FY 2008-2009 has a loss of $44,980 and FY 2009-2010 is expected to incur a loss once all of the final audit adjustments have been recorded.

3.       Cash reserve requirement has not been met in both the previous fiscal year and the current fiscal year.     

4.       Not applicable.  By law, the Building Fund does not make a dividend payment to the General Fund.

5.       The cash reserve requirement has not been met according to the terms of the cash reserve policy the utility did not experience an increase in unrestricted cash.  Fund performance is expected to be poor until the economy improves and building activity picks up.

6.       Does not apply.  Unrestricted cash does not exceed 150% of required balance.

7.       10% of prior year contribution to unrestricted cash results in a negative contribution.  Therefore, there is no “Potential Bonus or Raise”, or “PBR”.

8.       Does not apply as PBR would be a negative number.

9.       Does not apply as PBR would be a negative number.

10.   Not required as there is no PBR to distribute.

 

Bottom Line:

The Building Fund fails performance test 2, 3, 5, and 7 and does not qualify for enterprise performance incentives.

 

 

 

 

 

 


RESOLUTION NO._______________

 

A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, ADOPTING THE ENTERPISE PERFORMANCE INCENTIVE PROGRAM; AND PROVIDING AN EFFECTIVE DATE.

 

BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:

 

1.       THAT  the City hereby adopts the Enterprise Performance Incentive Program  as outlined in the attached memorandum, inclusive of the attached Financial Performance Evaluation methodologies and attached evaluations for each enterprise.

 

2.      THAT the performance incentives provided for by the results of each evaluation be retroactive to October 1, 2010.

 

3.      THAT this resolution shall become effective immediately.

 

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the _22nd____ day of November, 2010

 

 

 

                                                                            __________________________

                                                                             Mayor

 

ATTEST:

 

 

__________________________

City Clerk