City Aims for Organizational Viability

Quite a lot hinges on how City Hall approaches its next fiscal year, and city officials are presently trying to best triangulate themselves to make effective decisions.
The biggest tone-setter will be the budget, but other key developments — the presentation of the city’s Strategic Plan, the approval of the Human Resources Department’s Personnel Rules and Regulations manual and recommendations from the Long Term Strategic Financial Planning ad hoc committee — will set the foundation.
Change is ultimately what sets this waypoint apart from the norm. Since the last budget cycle, new faces in City Hall include three newly elected members of the City Council, City Manager Marcella Marlowe, interim Finance Director Josh Betta, Human Resources Director David Serrano, Parks and Public Works Director Michael Throne and City Treasurer Annie Han. The three council members were elected in large part on promises to steer the city away from “business as usual” and focus on real and effective reforms in its operations.
“I think the budget is going to really be the moment to decide what outcome they’re committed to,” Marlowe said in an interview last week. “It’s the biggest package of decisions they’re going to have made in my time here.”
Mayor Steve Talt, who is in the third year of his first term, included much of this foundation-setting in the agenda he detailed in January. In a phone interview, he said he eagerly anticipates getting down to business, budget-wise.
“We’ve been very proactive, which I like,” he said. “Everything seems to be moving along the way I think we all anticipated after the election.
“Whenever you’ve had a major change like we’ve had, things are going to happen and I think happen quickly,” Talt added, referencing the number of new people he’s working with. “There’s a great deal of trust that we’ve developed as a staff and City Council and I think that’s been very beneficial in making things move in a direction that’s acceptable to our constituents.”
Marlowe’s time here — she started on Oct. 16 after being hired by the outgoing composition of the City Council — has been fraught with, by her description, turning over rocks and discovering an entirely new set of problems. This did not come unexpected by any of the decision-makers at City Hall. Elections were, after all, won on the premise of rattling some cages, and new department heads have emphasized the urgency of investing in the future.
“San Marino is an appropriately fiscally conservative city,” Marlowe said. “Over the last 10 or so years, however, that appropriate perspective has been taken to an extreme that has resulted in a lack of willingness to spend money on critical community and organizational infrastructure.”
Community infrastructure has been a talking point. The Stoneman Building, which the city bought from San Marino Unified School District years ago, is in extensive need of code updates. The prior and current public works directors have publicly detailed the need for millions of dollars in utility upgrades. A 50-year-old culvert is presently being replaced after it rusted out and collapsed last month, forming a small sinkhole.
CONSIDERING RESERVES
Presently, the city’s reserve fund sits at more than $23 million, which nearly covers a year’s worth of expenditures, and officials have wondered aloud where to spend it — or whether to spend it at all.
“Any city over a hundred years old, we’re all going to have the same issues,” Councilwoman Susan Jakubowski said in a phone interview. “We have ongoing capital equipment needs. We have to keep our city where it needs to be.”
Jakubowski, who was a member of the Planning Commission when she was elected in November and was an adviser to an ad hoc committee tasked in 2016 with analyzing the city’s operating structure and finances, said she specifically hopes to address repairs and updates to both the Stoneman Building and the City Center.
“I’m hopeful that when full justification is offered, that we will get there,” she said. “When people talk about our reserve, we all get different visuals. Yes, we’ve got money in the bank, but in my mind’s eye, it’s been earmarked. You can’t leave them in disrepair.”
Organizational infrastructure, on the other hand, is arguably less obvious to much of the public and constitutes the gears in the machine, such as staffing, information technology, human resources and management.
“It’s sort of the spoke of the wheel,” Betta said during an interview.
The city currently is in the process of upgrading its phone system — long overdue by anyone’s estimation — and it will likely target its IT systems next, specifically its core financial software (the current version of which is, according to Betta, several years behind on system updates). There also is some internal interest in acquiring performance metric software and a new real-time digital timekeeping system.
“The ‘culvert’ is going to happen in the city organization at some point,” Marlowe warned. “That culvert is the perfect example of what happens. This isn’t unique to San Marino; most communities don’t understand the need to put money in unsexy places until something bad happens.”
NEW HR REGULATIONS
Paramount to all of this, however, is the Personnel Rules and Regulations handbook, which is due for approval by the City Council as a consent item at its April 11 meeting. This represents the first real change for the city’s Human Resources procedures in decades, according to Marlowe.
“You can’t do anything without HR regulations and right now, ours are about 40 years old,” she said. “It was a fundamental document that hadn’t been updated in at least 40 years. The ad hoc committee was up in arms about it, rightly so.”
Serrano, who joined the city in August, said he has been focused on these updates since he started. Once adopted, his department will meet with city employees to formally go over the current expectations and procedures, which will hopefully result in a more cohesive and defined work environment.
“They’re committed to this community,” he said of the city’s employees. “They’re committed to service to this community. When they looked at this package, they were just overwhelmed. They weren’t expecting something to this extent. Since 1979, there have been a lot of changes in employment practices and we needed to make sure we were caught up to all of those things.
“When employees know what they’re signing up for, and they know what that expectation is, they can meet that,” Serrano added.
FINANCE DEPARTMENT
Another area of concern remains the city’s financial procedures. Recently, the City Council approved the creation and hiring for an accounting manager/controller position, which was a half-step toward Marlowe’s recommendation to also create and hire for an accountant I position. (The two proposed positions were effectively a splitting of the prior accountant position, for which the city had failed to recruit.)
“We realized that the finance department was broken,” Talt said.
“It has been broken for a while. When we got new people in there, including Josh and Marcella, a lot of what was not being brought to light was suddenly being brought to light. A lot of the info that is now being provided to us was not previously known.”
The motivation for this restructuring was to give the finance department the tools to correct course from years of effectively flying blind. According to Marlowe’s presentation on this item, the longtime practices in the city’s finance department often resulted in substantial liability exposure thanks to sometimes nonexistent accounting and inconsistent logging. Indeed, part-time employees frequently were sent walking to the bank nearby to deposit large sums of cash.
“We knew that there weren’t enough checks and balances,” Jakubowski said. “This accountant position they’re bringing in is, I feel, a direct response to the ad hoc recommendation.”
Talt said he has an eye on the long-game when it comes to adding personnel and expenditures and would rather wait until budgeting formally starts before making substantial decisions regarding either. Without committing to an option, Talt explained — as an example — that a department with five employees might be ideally found to need only four. In that situation, the extra employee might have the skills to fill a need in another department and be reassigned accordingly.
Or, Talt said, the city might just have to hire another person to fill a void.
“We won’t know that until we look at the entire budget,” he stressed. “We won’t know whether it is necessary to add people until we see the whole operation.”
The City Council has enacted a continuing appropriations resolution for its budget process: Although the fiscal year starts July 1, the budget won’t be adopted until August and only operational expenses will be logged.
This delay is to allow for the development and presentation of the Long Term Strategic Financial Planning Committee, which is scheduled for the April 27 meeting. (The city’s separate Strategic Plan also will be introduced and presented that day.)
“Everybody’s been very hard at work trying to make things happen,” Talt said. “It’s been very well received, I think. The new council members have jumped into the fray and have been doing an excellent job. We have all pretty much the same desires in terms of the direction we want to see the city go.”

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