Core Services Review-Detailed

City of Penticton, Core Services Review
Detailed Findings Report

March 2010
Scope & Purpose of the Study
In 2009, the City of Penticton initiated a core services review. The primary objectives of
the review were to identify cost savings, service improvement opportunities and to
review the City’s organizational structure and workforce.
Specific Objectives from RFP
1 Create an inventory of programs and services offered by departments
2 Identify services and activities not mandated by legislation or Council
3 Determine if discretionary programs can be altered / discontinued to become more cost-efficient
4 Identify service improvement opportunities, including shared services
5 Identify opportunities to become more accountable to citizens
6 Link corporate strategic priorities and position the organization for the future
7 Examine at a macro level the City’s labour costs and staffing levels
8 Recommendations or options for changes to org structure, reporting relationships & org flattening
9 Review financial and budgeting practices

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Study Approach
The proposed approach for the Penticton Core Services Review included several work-
streams to gather data and perceptions internal and external to the City
Study Work-streams
A review of available financial information and attribution of costs to organizational areas and
Financial services
Review
Included a review of the 5 year financial plan, the 2009 budget, 2009 Year to date, and 2010 plan
A review of relevant legislation and charters that provide guidelines and a framework for the
Legislation
provision of municipal services
Review
A comparison of the City of Penticton to 5 other BC municipalities

City
Comparison The comparison targeted: financials, organization, compensation, facilities and services
A city-wide survey of staff that examined staff perceptions on a variety of topics relevant for the
Staff Survey core services review
Internal & A series of 40+ one-on-one interviews with managers, directors, councillors, appointed boards,
External and selected external partners.
Interviews
3
Synopsis of Findings
Over the past 3 months we have examined many aspects of the City of Penticton.
We have identified many specific recommendations for service improvement, cost
reduction, increased accountability and management. We would like to emphasize
several findings that we believe are critical for consideration.
1 Penticton has a committed and capable team
By in large, City staff are a capable group that are committed and care about what they do.
2 Penticton is not in a healthy financial position

City expenses have been growing considerably over the last five years and are significantly
higher than comparable cities – even after correcting for Utilities. City long term debt is also
higher than comparable cities. The new SOEC has added to the cities ongoing operating costs,
and the new aquatic centre will add further. Penticton taxes are already among the highest
relative to comparable cities. Penticton will need to clearly focus on restraining/reducing city
spending if it is to return to a healthy financial position.
3 Penticton management salaries are not higher than peer cities

Compensation for top management positions is not higher than peer cities.
4 Penticton does appear to have more management positions than needed

A review of the organization structure reveals that there are several positions that could likely be
eliminated. Restructuring the organization can help realize these efficiencies.
4
Synopsis of Findings
5 The development permit and building permit process is suffering service failure
Discussions with internal staff, management, council and city appointed boards have consistently
identified ongoing service delivery challenges related to development and building permits. Investment
in this area is required to resolve structural, process and governance issues.
6 Detailed assessment of the City and other comparison cities has identified many
improvement opportunities
For each service we have identified specific improvement and cost savings opportunities. The
opportunities include things like introducing new technology, reducing non mandated services,
eliminating facilities, improving business practices, reducing management positions, renegotiating staff
salaries for select positions and pursuing outsourcing. In total ~$2M in potential annual savings have
been identified.
It should be noted that many of these opportunities require an initial investment to realize savings. We
would also like to acknowledge city staff, Council, appointed boards, and key members of the
community that helped in identifying many of the opportunities presented here.
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Service Inventory Legend
We have identified the various services that Penticton provides and placed them into
one of four functional groups. We then categorized each service as follows:
Level of Service Description
Mandated Service This service is explicitly mentioned as a required service in the Community
Charter and/or the Local Government Act
Foundational Service This service is not explicitly mentioned, but is considered a bare necessity
service for the city’s residents and for internal city operations
Discretionary Service This service is not mandatory and the city has significant discretion in
determining whether the service is even offered by Penticton
In addition to these categorizations, we have compared Penticton services to those offered by other
municipalities. We have identified services that are not offered by other municipalities and services
offered by only some of the surveyed municipalities.
This service is offered by some but not all surveyed municipalities
This service is offered by no other surveyed municipalities
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Penticton Service Inventory
Utilities & Infrastructure Non-Recreation Services Recreation & Other Services

Police Protective Services Maintaining a Financial Plan Parks & Beaches
Fire Protective Services Financial Administration Recreation Programs
Electric Utility Revenue Collection Aquatic Programs
Water Utility Purchasing Museum / Library
Waste Water Utility Human Resources Cemetery Operations
Waste Water & Water maintenance Information Technology
Key Facilities
Roads Maintenance City Clerk Functions
Engineering Services, City Projects Maintaining a Community Plan City Hall Library / Museum
Public Transport Services Building Inspection Services Yards / Warehouse Community Centre
Garbage Collection & Recycling Issuing Business Licenses Fire Hall Cemetery
Vehicle Maintenance Issuing BLD, DEV Permits RCMP Building Commercial Space
Provide a Network Animal Control SOEC Land / Houses
Bylaw Enforcement Ice Rinks Other Recreation
Structures
Pool
Legend Mandated Service Foundational Service Discretionary Service

Not offered by some comparison municipalities Offered by none of the comparison municipalities
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Penticton Services – Line by Line Description and Categorization
Utilities & Infrastructure, 1 of 2
Service Categorization
Police Protective Services Providing policing, prisoner holding cells, police reporting, court liason and other police programs Mandated
Fire Protection Services Operating fire protection, fire inspection services and emergency dispatch services Foundational
Develop, maintain and operate transmission infrastructure for Penticton

Electric Utility Discretionary
Maintain electric customer accounts and collect payments
Water Utility Maintain and operate Water Treatment Plant and distribution infrastructure e.g pumps and reservoirs Foundational
Waste Water Utility Maintain and operate Waste Water Treatment Plant Foundational
Waste Water Collection Maintaining network of sewers Foundational
Water Distribution Maintaining network of treated water pipes Foundational
Roads Maintenance Maintaining roads, sidewalks and traffic infrastructure Foundational
Engineering Services Providing engineering design services for non-city projects Discretionary
Engineering Services Providing engineering design services for municipal projects related to roads, sewer and water Mandated
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Utilities & Infrastructure, 2 of 2
Public Transport Services Providing public transportation including buses and community shuttles Foundational
Garbage Collection &

Collecting garbage and recycling for residents Foundational
Recycling
Vehicle Maintenance Maintaining and repairing vehicles in the city fleet Foundational
Providing a communications network for phones and computers that can be used by the City and
Providing a Network Discretionary
other organizations in the City
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Non-Recreation
5 Year Financial Plan Maintaining an accurate five year financial plan to guide city service planning Mandated
Financial Administration Maintaining financial records and reporting in accordance with the guidelines & requirements Mandated
Revenue Collection Collecting taxation revenue, fee for service revenue and overseeing other revenue sources Foundational
Ensuring the city follows proper procurement practices, managing city suppliers and managing city
Purchasing Foundational
stores
Assessing performance, labour relations, employee relations, recruiting, health and safety and
Human Resources Foundational
managing benefits
Supporting electronic hardware including phones, printers, computers, copiers, city network, providing
Information Technology Foundational
city help desk function, and supporting individual teams with IT projects where possible
Attending to administrative matters for the council and city, maintaining an accurate city record, and
City Clerk Mandated
provide legal support where needed
Community Plan Maintaining an Official Community Plan Mandated
Building Inspection Conducting inspections and enforcing city zoning and building bylaws Foundational
Business Licenses Issuing business licenses for businesses operating in Penticton Foundational
Permits Reviewing submissions for building or development, and issuing relevant permits Foundational
Animal Control Operating an animal impoundment facility and enforcing animal control bylaws Foundational
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Recreation
Maintain and enhance parks, beaches and other outdoor areas like fields including maintaining
Parks & Beaches greenery, developing additional recreation structures, maintaining recreation structures, maintaining a Discretionary
level of cleanliness and providing appropriate facilities such as washrooms
Recreation Programs Organizing, scheduling and delivering recreation programs for various groups Discretionary
Aquatic Programs Organizing and delivering aquatic programs that use the city pool facility Discretionary
Museum / Library Providing a public library and a public museum Discretionary
Cemetery Operations Maintaining, upgrading and operating a cemetery Discretionary
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Major Facilities 1 of 2
Facilities Categorization
City Hall Civic building that serves as the primary offices for city staff and council proceedings Foundational
Civic facility that serves as the primary operating location for public works staff and storehouse for
Yards / Warehouse Foundational
supplies
Fire Halls Facilities for use by fire protection personnel and vehicles Foundational
RCMP Building Facilities for use by RCMP personnel including prisoner lockup facilities Mandated
SOEC Facility for large community events, premier hockey, conferences and tradeshows Discretionary
Ice Rinks Additional facilities to provide community priced access to ice time Discretionary
Pool Aquatic facility Discretionary
Community Centre Centre for providing community programs and recreation activities Discretionary
Cemetery Civic operated cemetery Discretionary
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Major Facilities 2 of 2
Facilities Categorization
Additional space in the City of Penticton for use as offices or for use by other Penticton organizations
Commercial Space Discretionary
and businesses
Land / Houses Real-estate assets owned by the City of Penticton for future uses or needs Discretionary
Other Recreation Various structures maintained by the City for recreation and culture purposes such as curling club,
Discretionary
Structures boat houses, Gyro Bandshell etc
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A. Police Protection Services
Service Area Assessment
Providing police protection services including: Significant Expense: enforcement accounts for $7.7M (15%) of Penticton’s operating expense
4 shifts of RCMP officers (not including Electric Utility)
24x7 Guarded Cells Enforcement expenses have increase significantly from $5.2M in 2005 to $7.7M in 2010
Police Records Discussions with other municipalities have confirmed that enforcement expenses have risen
consistently for all municipalities
Community Policing & Victims Services
Penticton demonstrates a high level of city staff involved in RCMP operations – this is a positive,
Crime Reduction as city staff can perform administrative duties at a lower cost than RCMP staff
Court Liaison Comparing total enforcement expenditures reveals that despite the increases, Penticton has a
competitive overall enforcement expense relative to other municipalities that use RCMP
One area for expense savings is the salary rates for Penticton guards
Recommendations
Potential Annual
A.1
Savings ~ $100K
5 Year Financial Forecast

Given the extreme increase in policing expenses over the past 4 years, ~50%, the city should request forecast expense
information from the RCMP to enable accurate expense forecasting over the coming 5 years. Further, should expenses
increase faster than CPI, the City should consider service reductions or other methods to eliminate spending increases. Future Cost
A.2
Currently, enforcement spending accounts for almost 30% of total tax assessments. This service cost is the single Containment
highest operating expense item for the City.
In addition, if Penticton wanted to understand a comparable cost structure for a municipal force it could examine Port
Moody’s police services.
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B. Fire Protective Services
Providing fire protection services including: Significant Expense: Fire protection accounts for $4.9M (9.4%) of Penticton’s operating expense
8 paid shifts of firefighters (not including Electric Utility)
Additional paid-on-call firefighters Fire enforcement expenses have increase significantly since 2005, $3.5M, or approximately 40%
2 fire halls Comparison with other municipalities demonstrates that Penticton fire expenses are significantly
higher than peers
Emergency dispatch, shared with regional
district Penticton has a higher fire expense than comparison organizations due to (1) use of paid shifts
(2) provision of dispatch services and (3) other unknown factors
Fire inspectors
Recommendations
Restrain Future Fire Service Spending

Penticton has a high fire expense in comparison with other municipalities. It should be noted other municipalities include districts that
must operate more firehalls and cover a larger area. Some municipalities that have maintained a larger volunteer service have fire Future Cost
B.1
protection costs that are only 30% of what Penticton spends. Further, Penticton expenses are an estimated ~$0.5M-1.5M higher than Containment
Vernon. While some of the additional expense is due to dispatch, it is also likely that Penticton has chosen a higher level of paid
service and this higher level of service carries with it significant additional expense.
B.2
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C. Electric Utility
Recommendations
B.3
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C. Electric Utility
Providing electric services for Penticton including: The electric utility is a unique service offering that is only offered by a handful of municipalities in BC
Fully outfitted electricity operation and The perspective of municipalities that do not have an electric utility, is they would like one. The
maintenance teams for the municipal grid perception is that the electric utility provides a strong revenue and profit source.
Revenue collection and account maintenance Financial estimates for the electric utility indicate additional profit for the City of approximately 4-5M
Use of electric poles to deliver other services per year. To generate an equivalent revenue, the city would need to increase taxes 20-25%.
like the city network Despite the clear strengths of the Electric Utility, there have been many concerns raised regarding
Desire to pursue provision of telephone and the effectiveness of the Utility – in other words, is the Utility generating the best value for Penticton
network services to others taxpayers. This is a critical question, and one that requires a deeper analysis than just year over
year profit. Specifically, (1) are the rates provided to taxpayers equal to or better than what they
Desire to pursue construction of a new would obtain if electricity was provided as in other municipalities, (2) does the utility have appropriate
substation that would replace a substation controls to ensure safe and reliable distribution of electricity, (3) does the utility have appropriate
currently operated by the electricity supplier accounting to ensure taxpayers are not exposed to undue capital risk, and (4) are proceeds from the
utility used in appropriate best ways to reduce tax burden or provide higher level of service for
Penticton.
The level of financial planning in the City of Penticton leaves significant doubt as to the degree to
which Penticton can ensure the answers to questions (1), (3) and (4) are satisfactory.
It is possible that without appropriate financial controls and governance, that proceeds from the
electric utility could be used in a manner that is not in the best interest of taxpayers. As a
consequence, it is imperative to ensure such controls are in place.
Further, Penticton admits due to the extensive delay of the Carmi substation and subsequent delay
of the voltage conversion program that the answer to (2) is no.
Lastly, during the study, several questions where raised regarding whether the city should consider
outsourcing the electric utility. At this point in time, it would be premature to actively pursue an
outsource contract. While this outcome may be in the best interest of Penticton, there is insufficient
information to ensure that an outsource agreement would be in the best interest of Penticton.
Specifically, compelling evidence would be necessary to demonstrate that overall expenses would
be lower, or that risk adjusted profit to the city would be better than the current situation. And it
should be noted, that the private sector provider would be extracting some profit – and therefore by
definition, the best option for the city is to first pursue efficient delivery internally.
Recommendations Please See Next Page

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C. Electric Utility
Recommendations
Undertake a Study of Electric Utility Effectiveness
The Electric Utility is a unique service to Penticton, and it is highly likely that sufficient management controls and governance oversight
can be put in place to ensure that a municipal run Utility is delivering best value to Penticton taxpayers.
A study of Utility effectiveness would seek to conclusively answer these four questions:
(1) Are the rates provided to Penticton electricity Users better than what they would obtain if electricity was delivered using
the best available alternative?
(2) Does the utility have appropriate redundancy to ensure reliable distribution of electricity to residents in the face of
Organizational
C.1 significant hardware failure?
Effectiveness
(3) Does the utility have an appropriate management of its assets and reserves to ensure Penticton Taxpayers are not
subject to unforeseen capital costs? Or more clearly, is the accounting for the Utility with sufficient rigor to ensure all
costs are accounted for, profits are accurate and reserves are appropriate?
(4) What controls are in place to ensure that Utility costs are competitive with the outsourcing alternatives? Further, how do
Utility costs compare with outsourcing alternatives?
The process of answering these questions will provide a clear fact base to either verify a municipal run utility is the best
option or to confirm that outsourcing is a better option.
Pursue the Carmi Substation
It is clear that a substation is required out of operational necessity. Further delay in building the substation will lengthen
the period that Penticton is not able to ensure reliable service for Penticton – and in the event of a serious outage,
Penticton could be subject to undesired provincial and national scrutiny.
There are two options before Penticton: (1) pursue the substation as a city venture or (2) accept a proposal from Fortis to
build and operate the substation.
We recommend an independent assessment of the options before Penticton to confirm for each option:
– Financial benefits Improved
C.2
Service
– Capital costs
– Ongoing operational costs an requirements
– Project delivery risks
– Ongoing service delivery risks
This information will enable Penticton to make an informed decision on the best option to pursue.
It should be noted that Penticton has prepared a business case for the substation – however, given the track record of
estimates for the SOEC, it is recommended that the City reassess the option prior to making a decision.
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C. Electric Utility
Recommendations
C.3
Provide Clear Direction to City Staff that Telephone and Lit-Fibre Services are not to be Provided
Several staff members indicated a desire to enter into this market space based on the success of the City’s electric utility
and provision of dark-fibre.
The City has no competitive advantage, capability or capacity to initiate two new lines of business in direct competition
with established competitors for provision of telephone service or lit-fibre service.
Pursuit of this line of business would require the city to develop new service delivery capabilities to cope with 24x7 Eliminate
C.4 demand from customers. Further, the City would be competing with providers that have scale and experience providing Unapproved
these services. Expense and
Effort
In contrast, the City is in the business of providing dark-fibre, or basically, running a cable along existing electric poles for
major customers that can take care of their own support needs. This is a good business to be in. There is minimal
additional expense and the City has an advantage in that it already owns poles that are in place. But to be clear, this is a
minor opportunity that generates $20,000 per year. In the event that it became onerous, the city should consider exiting
this line of business.
Review Customer Charge Out Rates
Some concerns were raised regarding the cost of creating new infrastructure. In some of these circumstances, the City
will charge a specific party for the work that is completed. Anecdotally, a concern was raised regarding the
competitiveness of the charge out rates. Specifically, it was believed that 3rd party contractors could provide a similar
service at a much lower cost. Citizen
C.5
The same issue was raised with other services that the City provides for taxpayers. It is recommended that the City Accountability
conduct a review of its service delivery costs and charge out rates with the aim of (1) providing clarity into the true costs of
delivering these services to clients and (2) ensuring that costs charged to clients are consistent with competitive private
rates. A key component of this exercise is know as Activity Based Costing – this exercise in itself can be a valuable tool
for identifying new efficiencies and areas for improvement.
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D. Water & Waste Water Utility
Providing Water Treatment & Waste Water Water & Waste Water treatment is an important service that must be provided.
Treatment 3 of 5 surveyed municipalities operate their own waste water treatment plant
Only one other surveyed municipality operates their own water treatment plant – the other
municipalities share water treatment infrastructure with other municipalities or with a regional
district
No quality or lack of service issues were uncovered during the core service review
The primary question for these utilities is whether they are providing treatment services at the
best possible cost
A high level review of budget line items indicates that it is likely that both services are operating
at appropriate cost levels
A review of organizational staffing reveals that Penticton may have additional staff – this is
supported by a review of the management structure.
Recommendations
D.1
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E. Public Works
Maintaining and repairing: Each municipality had a similar approach for the delivery of these service: deliver minor repairs
Roads using city staff and engage external parties for major works.
Sidewalks This size of Penticton infrastructure appears to be similar to other municipalities.
Sewer system A review of comparable expenses for other municipalities indicates that Penticton spending is on
the low end of reported expenses, when taking into consideration its size of infrastructure.
Water network
During the study there were two issues that were raised with respect to this infrastructure:
1. 5 Year Financial Plans did not have an accurate estimate for future spending
2. Absence of cost management and performance management tools to ensure best use of
time and resources
Recommendations
Asset Management and Planning
At the outset of the review, the mandated 5 year financial plan did not have an accurate representation of capital needs for public
works. Specifically, the financial plan did not include estimates of funding needs to undertake required investments in core civic
infrastructure. During the review, the City began including estimates of this information into the 5 year financial plan. Citizen
Accountability
It is concerning that critical information regarding the management of City owned assets was absent from the 5 yr financial plan. It is
E.1 noted of the few mandatory requirements, the city must maintain a 5 year financial plan, and must provide road services.
Potential for
Failure to adequately plan for financial needs of City assets can result in: (1) unplanned deterioration in core city assets, (2) significant Additional Salary
cost shocks in future years when systematic underinvestment becomes clear and (3) overspending in other areas due to a failure to
Requirements
accurately recognize costs for the existing asset base.
Going forward, the City should ensure its senior management team is satisfied with the level of capital planning for core infrastructure,
and that the 5 year financial plan accurately reflects future capital needs.
Project Level Performance Management

Much of the work in Public Works is project based. Project based work should be managed by (1) creating an estimate of
Performance
E.2 time and resources necessary for a specific job, and (2) comparing the actual time and resources used with the initial
Improvement
estimates.
It is recommended that the City pursue project-based tracking.
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F. Engineering
Providing Engineering services to support This important function is necessary to support mandated services
City projects for roads, water and sewer While staffing numbers reported from other cities are somewhat inconclusive, our best
Planning and development permits interpretation of the data is that Penticton levels are comparable to other municipalities given the
additional scope of responsibility for non-city projects.
Non-city projects that require connections to
city services A significant concern was raised regarding the delivery model for development permits and
building permits. This issue involves engineering and is discussed in regulatory services.
Recommendations
Provide Engineering as a Shared Service with RDOS
The regional district indicated that they would like to consider exploring engineering services as a shared service. This has benefits for Reduced Cost /
F.1
the RDOS by providing a larger pool of engineers to handle workload when needed without commitment to long-term salary costs and Cost Sharing
risk of unused resources. Penticton could benefit from attractive charge out rates for engineering support to members of the RDOS.
Operational
Provide GIS as a Shared Service with RDOS Efficiency
F.2 The regional district indicated an interest in exploring GIS as a shared service. Penticton would benefit by leveraging investments
already made by the RDOS. A new delivery model for GIS services could also provide Penticton and the RDOS with a lower cost Potential for
approach to delivery GIS services to both organizations. Additional Salary
Requirements
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G. Public Transport
Providing Bus and Community Shuttle services Based on review of the community charter and the local government act, this is not a mandated
service
A review of other municipalities indicates that all other municipalities provide public transportation
for their citizens
Further, public transportation is an important city service that lowers the cost for transportation
and reduces environmental impact.
On these grounds, public transport should not be discontinued.
Transit services are contracted out. A review of contract expense indicates that Penticton transit
costs are significantly lower than a comparable “isolated” municipality of Vernon
Further it was discovered that the municipality attempted to reduce transit service in the past and
that this proposal met with strong opposition and was abandoned.
We are recommending no changes to public transport.
Recommendations
Investigate Ridership and Routes

Penticton recoveries (~50%) for Transit are significantly lower as proportion of total expense than Vernon recoveries Potential Service
G.1 (~75%). While there may be little Penticton can do to increase ridership, there may be lessons in the delivery of transit Improvement /
services in Vernon that will enable Penticton to deliver a higher level of transit service at the same net cost or potentially Efficiency
at a reduced net cost.
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H. Garbage Collection & Recycling
Providing residential garbage collection and This is clearly an important service for the municipality – further a review of other municipalities
recycling services revealed that all municipalities offered this service.
Penticton currently contracts out this function. A review of contract expenses for other
municipalities reveals Penticton expense is similar to other “isolated” municipalities of Campbell
River and Vernon.
Three surveyed municipalities provided garbage collection services in-house: Port Moody, North
Cowichan and Vernon.
One of the municipalities recently brought garbage services back into the City due to an inability
from their provider to meet service requirements
We are recommending no changes to Garbage Collection & Recycling
Recommendations
Maintain Garbage Collection as an Outsourced Activity

As long as service requirements are met and overall costs are controlled, using an external contractor is an appropriate delivery
H.1 model. Further, using an external contractor will provide Penticton additional flexibility in the event of a labour disruption. N/A
Given Penticton’s importance as a tourist destination, ensuring regular ongoing collection of refuse is critical – as demonstrated by the
unfortunate situation other BC municipalities have endured during labour disputes.
Investigate Cost of Service Delivery for N. Cowichan and P. Moody Potential

North Cowichan uses a mixed delivery model where it collects garbage using internal staff and collects recycling using external staff. Savings
H.2 The costs for this service are $400,000 lower per year than Penticton. $400,000 / Yr
Further investigation into the service delivery models is warranted. This would provide a clear factbase for Penticton to determine if it Reduced Service
could realize savings. Delivery Costs
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I. Vehicle Maintenance
Maintaining city vehicles ranging from normal This service is necessary to maintain vehicles and equipment needed for the delivery of core city
consumer vehicles to large machines and services.
equipment. There are two primary questions: (1) how should these services be delivered for lowest cost and
best service, and (2) what is the appropriate size of the equipment and vehicle fleet
A review of other municipalities demonstrates that all municipalities have some level of internally
delivered mechanical maintenance services – the key difference being that some municipalities
choose to outsource major repairs and only deliver regular maintenance with city staff.
A review of staffing levels for Vehicle maintenance indicates that Penticton has similar levels to
the only other municipality that delivers all services internally. Further, it should be noted that
Penticton has a larger scope of services, and hence vehicles and equipment that it supports.
Based on available information, it is likely that Penticton’s current delivery model using internal
staff is the best model to use going foreword.
Recommendations
Investigate Availability of Large Job Maintenance Services in Penticton

Conduct a review of availability of large scale maintenance services in Penticton. This review would determine if outsourcing large
I.1 scale maintenance is even an option. Specifically, the municipalities that outsource large jobs have an established private sector Service Planning
capacity to deliver large scale services. If such services exist in Penticton, then the next question is the cost at which they could
deliver services that Penticton requires. This information would be useful in conclusively determining if internal services should be
considered for contract delivery. Further, this information would also be helpful to set performance targets.
Create Cost Performance Reporting for the Vehicle Maintenance Function

Create appropriate reporting mechanisms based on work order categorization, time allocation to work orders and activity based
costing to enable cost attribution to each requested job.
Citizen
I.2 This would enable ongoing performance monitoring and comparison with best available private sector rates. This would provide clear
Accountability
visibility into value delivered and would set clear performance expectations.
It should be noted, that it is the opinion of the review team that vehicle maintenance is an area that runs well and meets high
standards. This recommendation is put foreword to establish a fact base that can verify this opinion
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I. Vehicle Maintenance
Recommendations
Provide Vehicle Maintenance as a Shared Service to RDOS Municipalities
Penticton has invested in the development of a vehicle maintenance capability. This includes a fully equipped shop an a team of
mechanics capable of completing regular maintenance and significant repairs.
Organizational
From an operational effectiveness standpoint, Penticton should seek to ensure its capacity is used 100%.
Effectiveness,
I.3 Revenue
A review vehicle maintenance utilization and costs of service should provide Penticton with the required fact base to determine if the
Potential / Cost
vehicle maintenance services are fully used, and if the vehicle maintenance services are competitive / efficient.
Recovery
If there is additional capacity, and if Penticton has demonstrated a competitive capability, then it should consider providing vehicle
maintenance services as a shared service more broadly to the RDOS.
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J. 5 Yr Financial Plan
The city is required to maintain a 5 year financial A 5 year financial plan is a mandatory requirement for every municipality. Reviews of other
plan to guide service planning and inform council municipalities revealed 5 year financial plans that are in order, accurate and publicly shared.
and management team decision making. During the course of the review, we were provided with a copy of the 5 year financial plan for
Penticton.
The current state of the financial plan was not useful for ensuring strong long-term fiscal and
operational management. Specifically, the plan outlined a path to take the city to the limits of its
allowable long-term debt. The costs in the plan were not vetted. Further, it was discovered that
accurate asset management requirements were also not incorporated into the 5 year financial
plan that was provided to the core services team.
Unfortunately, the level of rigor contained in the financial plan is consistent with the current
financial health of the city of Penticton. The City is facing significant financial pressures from
multiple fronts. Further, managers and council do not have the proper information available with
which to make critical service delivery decisions.
Recommendations
Undertake a Rigorous Five Year Financial Planning Exercise
During the course of the review it has become clear that Penticton is facing many important and crucial decisions in 2010 and in the
coming 10 -20 years. Despite its natural financial advantages over other municipalities, an Electric Utility and casino revenue, it has a
long-term debt that is 75%-1000% higher than other similarly sized municipalities. It is facing significant spending pressures in 2010.
Citizen
J.1 It has seen significant increases in core operating areas like police and fire services over the last few years. It will see ongoing cost
pressures from the impressive SOEC and from new recreational structures it decides to add to its outstanding set of facilities. Accountability
Penticton will need to focus on spending restraint immediately and in coming years. The choices faced by council, by management,
by city staff and by Penticton taxpayers will not be easy. A five year financial plan is a good starting point to provide a clear context for
the importance of each decision and its long reaching financial effects.
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K. Finance – Accounting, Revenue Collection
This service includes: These services are important for any organization. A review of comparison municipalities
Financial Reporting indicates that every municipality delivers these services using internal city staff.
Accounting A review of staffing levels indicates that Penticton has a much higher number of finance staff than
all comparison municipalities.
Payroll
The increase in finance staff is believed to result from:
Accounts Receivable
1. Additional account management requirements for Electric and Water Utilities
Accounts Payable
2. Additional financial management for larger scope of activities relative to other
Municipalities
Recommendations
Potential Annual
Implement Fully Automated Online Payments & Conduct a Detailed Role-by-Role Review to Savings ~ $100K
Identify Additional Savings Opportunities Loaded Salary
Online payment services are relatively straightforward to deliver so long as account management functionality and refunds are Costs for 2
K.1 excluded. The BC government has developed shareable standards and tools to use for payment processing. Clerical FTEs
Enabling online payments will reduce payment processing requirements of Penticton and should also reduce collection requirements. Initial Capital
Online payments could be accepted for: License renewals, Utility Payments, Municipal Fines and others. Expenditure
Required
30
L. Purchasing
This service includes: Purchasing is important for the City given the amount of services the city contracts and the
Ensuring the city follows proper procurement volume of supplies the city purchases
practices Penticton currently does not have a Purchasing Manager
Managing city suppliers Review of other municipalities indicate that some other municipalities have a manager, and
Managing city stores others do not;
Review of the staffing levels of a purchasing department indicate that Penticton has a higher level
of staff than its comparator municipalities
Recommendations
Maintain Purchasing Manager Position
A purchasing manager can provide purchasing oversight and guidance for Penticton. This guidance can be critical for an organization Potential Annual
to ensure it gets the most out of its significant contract, capital project and supplier spend. Savings ~ $20K
L.1 It should be noted that one comparison municipality eliminated their purchasing manager position. They have now decided that it was Loaded Salary
a mistake and are reinstating the position. Cost for 20% of a
A related opportunity is to share the purchasing manager’s time with the regional district. This would enable both organizations to Manager
access expertise to make better purchasing decisions, and could help Penticton to relieve some of its costs.
L.2
Investigate Coordinated Purchasing

Reduce Supply
L.3 Other surveyed municipalities belong to groups that source municipal supplies in larger volumes to obtain better pricing. Penticton
Costs
should examine the feasibility of establishing a similar purchasing group in the Okanagan.
31
M. Human Resources
This service includes: Human Resources in Penticton recently had a reduction in staff from 5 members to 4 members.
Labour Relations A review of other municipalities indicates that at 4 members, Penticton has an HR department of
Employee Relations similar size to others.
Performance Assessments Each municipality delivers HR services using internal staff and has an HR manager
Recruitment When considering HR for Penticton, it is important to remember that Penticton has approximately
40% more staff than other municipalities owing to the delivery of additional services – primarily
Compensation Management Utilities and higher levels of paid staffing in protective services.
Health and Safety
Recommendations
Monitor the Delivery of Human Resources Department; Increase Staffing as Required

Potential Cost
Given the importance of controlling costs, it would be inappropriate to increase staff in this department without a clear need that Increase $75K
additional staff are required.
M.1 Loaded Salary for
The performance of this department should be monitored. If the department is unable to deliver its base services with existing staff, a mid-tier
the service challenges should be noted. If the undelivered service areas are desired, staffing for this area should be restored to its
employee
previous level of 5 members.
32
M. Human Resources
Recommendations
Provide Health and Safety as a Shared Service to RDOS Municipalities

The regional district indicated that they would like to consider exploring health and safety services as a shared service. This has Revenue
M.2 benefits for the RDOS by enabling access to a skilled resource without the commitment to full-time salary. Penticton could benefit Potential / Cost
from attractive charge out rates to the RDOS. Recovery
Examine and Eliminate Relief Budgets

Several areas of the City use relief budgets to allow for vacation back-up and variation in staff levels. In some instances it is possible
to operate without relief budget by either requiring vacation to be taken in non peak periods or by accepting a lower level of service.
As an example, relief for bylaw officers is questionable. The primary purpose for having multiple bylaw officers is for enforcement of
M.3 bylaws during the summer. Off season enforcement should not require the same intensity. As a result, relief budget could be avoided Cost Reduction
by requiring all bylaw officers to take vacation in non peak periods.
We recommend the City investigate all instances and use of Auxiliary, Relief and Seasonal Staff. For each, the City should determine
shifting of vacations is possible, and if reduced service in the event of an unplanned absence is acceptable. Some instances relief
will not be justifiable. In some instances it will be – such as tax collection during peak periods.
Manager & Staff Performance Management

M.4 It is recommended that Penticton implement role specific performance measurement. This will include expectations by role and a Accountability
formal regular review to discuss performance relative to expectations. Further, disciplinary actions or performance commendations
should be communicated in writing and placed on the employee or manager file.
33
N. City Clerk
This service includes: The City clerk function is a required service
Attending to administrative matters for council A comparison with other municipalities indicates Penticton has one of the highest levels of clerk
Maintaining official city record staffing. Some municipalities have as few as 2-3 staff. Penticton has 6 including:
Providing legal support where needed − Manager
Attending to a broad range of administrative − Deputy Clerk

duties − 3 Legislative Secretaries
− 1 Receptionist
Detailed review of organization charts reveals that cities with lower levels of clerk staff also have
additional secretarial support for the CAO and council. Adding these staff members back into the
group leaves Penticton still higher than comparison cities by 1-2 staff members
Recommendations
N.1
Provide Health and Safety as a Shared Service to RDOS Municipalities Service

The regional district indicated that they would like to consider exploring land management as a shared service. This has benefits for Improvement
N.2
the RDOS by enabling access to a skilled resource without the commitment to full-time salary. Penticton could benefit from attractive and Cost
charge out rates to the RDOS. This would require Penticton to establish a formal land management capability. Efficiency
Provide Health and Safety as a Shared Service to RDOS Municipalities Service

The regional district indicated that they would like to consider exploring sustainability as a shared service. This has benefits for the Improvement
N.3
RDOS by enabling access to a skilled resource without the commitment to full-time salary. Penticton could benefit from attractive and Cost
charge out rates to the RDOS. This would require Penticton to establish a formal sustainability capability. Efficiency
34
C. Electric Utility
Recommendations
N.4
Introduce an Exempt Assistant to the Mayor and CAO Service

The Mayor, Council and the CAO require administrative support on sensitive issues that impact the Union. They also require Improvement
N.5 administrative support to organize their calendars, coordinate communications and provide a single contact point for council. $50,000 Cost
increase
It is recommended that the City introduce a new exempt assistant role that reports directly to the CAO and Mayor. Loaded Salary
35
O. Planning
This service includes: The planning function is a mandated service – specifically the City must maintain an Official
Providing long-term planning Community Plan
Providing short-term planning Discussions with the internal staff have revealed significant service challenges in the Planning
Department including:
Reviewing development applications from a
planning perspective 1. Inability to meet workload requirements for applications resulting in extended delays
2. Inability to complete key planning and bylaw review activities that have been proposed for
more than 5 years
3. Significant ongoing turnover in key positions
A review of the planning function in other municipalities indicates approved Penticton planning
staff levels are comparable to other jurisdictions and that approved planning expenses are among
the highest for comparison jurisdictions, $200K higher for 2008 and $400K higher when using
2010 expense for Penticton.
Recommendations
O.1
Fill the Senior Planner Position as Soon as Possible

O.2 This role is critical to creating stability in the planning group. It is clear that stability in this area is required to resolve several interrelated Service Planning
issues: turnover, service failure and poor client service. Further, a review of planning expenses should be conducted once desired
staffing levels have been achieved.
Authorize Commitment of Additional Contract Spending with Targeted Deliverables

The Planning department has been unable to complete major planning projects for several years. The outcomes of these projects are
Service
believed to serve a key role in making it easier to do business with the City of Penticton, and to make it easier for city staff.
O.3 Improvement
Penticton should authorize a temporary increase in funding for completion of required deliverables. The authorization of this funding Enabler
should be contingent on the commitment that the deliverables will be produced in the approved funding envelope and that additional
contract expenses are explicitly a one time expense.
36
P. Regulatory Services
This service includes: Regulatory services are an important service – all other reviewed municipality provides these
same services.
Conducting building inspections
Many concerns with regulatory services, specifically inspections have been raised internally and
Issuing business licenses
externally.
Overseeing animal control
Some of the concerns relate to an inability to complete development permits on time. This is a
Enforcing non-city bylaws problem that originates from an inability of regulatory services, planning and engineering to work
together effectively.
Some of the concerns relate to an overly administrative approach for delivering inspection
services; an approach that many complain does not place value on an applicant’s time
Some of the concerns relate to directives from council that allegedly contravene established
building codes or other laws
Some of the concerns relate to an internal discord with senior management
Some of the concerns relate to perceived ambiguous instructions – a requirement to enforce
bylaws and requests to overlook infractions to suite the needs of a particular developer or
applicant
With respect to other cities, overall regulatory staffing is about 2-4FTEs higher than comparison
municipalities
Recommendations
P.1
P.2
37
P. Regulatory Services
Recommendations
P.3
P.4
Restructure the Planning, Regulatory and Engineering Departments

There are clear service delivery failures in this area. This fact is agreed upon by all departments, senior management, Council and
external stakeholders.
It is believed the primary source of the problem is three fold:
Service
P.5 (1) The structure of the departments introduces an ambiguity, whether real or otherwise, as to the owner of specific tasks. Improvement
Therefore, a single manager should have responsibility for planning, development and building functions.
Enabler
(2) The combination of staff roles and process requires coordination of several hand-offs. This process should be streamlined to
create a clear owner, and to eliminate unnecessary hand-offs where possible. This may also require redefined roles.
(3) Building bylaws are not up to date. Therefore, the city should set aside required funds and dedicate a resource to ensure this is
completed as soon as possible.
Customer Review / Ombudsperson

Several concerns have been raised regarding the level of service and the kind of service received by regulatory services. There is Service
insufficient information available to conclusively state whether the issues arise from a lack of regard for clients, or for a client’s lack of
P.6 Improvement
regard for the City. It is likely, that there are elements of truth in both perspectives.
Enabler
We recommend implementing a customer relations group. The purpose of this group will be to provide an independent avenue for
clients to raise concerns about service they have received at the city.
Adherence to Bylaws and Regulation

Service
P.7 With the completion of updated Bylaws and provision of a customer review body, the city should affirm its commitment to adhere to the Improvement
bylaws, and to support the manager of this area to be the City’s sole authority on matters relating to development permits, building
Enabler
permits, and enforcement of City Bylaws.
38
Q. Parks, Recreation & Culture
This service includes: Penticton is a tourist City, and as such parks recreation and culture serve a unique role in the
Maintaining Penticton parks and beaches City. However, as important as these services are, they are admittedly more discretionary than
other services such as roads, water and waste water services, planning, financial management
Maintaining Trees, shrubs and bedding plants etc.
Maintaining sports fields and other outdoor It should be noted that during the course of the review the dedication, energy and quality of the
areas staff in this department was clear.
Maintaining recreation equipment and A review of the depth of recreation assets, facilities and programs is a further testament to the
structures in parks, beaches and outdoor areas quality of services delivered by this group.
Providing pest control A review of overall recreation expenses demonstrates that Penticton has 30-80% higher costs
Organization of recreation programs for the that comparator municipalities. This comparison group includes Port Moody, City of the Arts.
Penticton public Direct staffing level comparisons are difficult to obtain as a result of a high level of seasonal staff
Promotion of active lifestyles and a sense of in all municipalities, and differing assets to invest in.
community A review of structures of comparison organizations does reveal that there are several additional
Provision of a museum and library services mangers in Penticton than in comparison organizations.
Provision of cemetery services However, from a broader perspective, the level of investment in recreation for Penticton is high.
It is much higher than other municipalities, and is at levels where reductions may be appropriate
Provision of SOEC to ensure resident taxes are not increased.
It should be noted that Penticton taxes and long-term debt are already among the highest in the
comparison group. Further, given the benefit of the electric utility and the casino, one would
expect taxes and long-term debt to be among the lowest.
With this perspective in mind, we have proposed several options for consideration.
39
Recommendations
Q.1
Q.2
Reduce Parks Expense

We have requested several options from the Parks Director for reducing parks maintenance costs. Specifically, the annual budget for Potential Annual
Q.3 this service is $2.4M. This service maintains many areas throughout the City, including critical areas such as the Beach. However,
Savings ~ $200K
there is likely opportunity to reduce overall expense by identifying parks and green space that would be good candidates for reduced
service.
Value Case for a new Irrigation System

Service
Q.4 Parks has indicated that an irrigation system that can be remotely controlled would be a significant expense savings. We would Improvement
recommend that an initial value case (much less formal than a business case) be prepared to provide an initial assessment of benefits
Enabler
and costs. Based on this information Penticton would be in a much better position to determine if the opportunity has merit.
Q.5
40
Recommendations
Reduce Facilities Expense

Penticton has an impressive list of facilities. However, each facility carries with it ongoing operational costs. Further each facility also Potential Annual
carries the risk of requiring significant capital expense for major repairs and upkeep. Savings ~ $200K
Q.6 Penticton should undertake a full financial assessment of its facilities. The review should assess operating revenue, operating costs + assumed
and anticipated capital cost requirements. avoided capital
It is noted that current financial tracking will result in operating costs being allocated to the wrong facility from time to time. As a result expense $200K /
consultation with finance and facilities will be required as part of this exercise to understand the degree to which misclassification of Year
expenses is material.
Consider Reducing Grants

Penticton has the highest level of grants in comparison with other surveyed municipalities.
Information from Mission, Vernon and North Cowichan indicate those municipalities have grant levels of $100,000 - $400,000 per year. Potential Annual
Q.7
Information regarding grants has not yet been obtained for Port Moody. Savings ~ $200K
Penticton has grant levels of $600,000+ per year. Reducing grants will have a negative impact on recreation and culture in the City.
However, given the overall recreation expense it is an area that should be considered.
Consider Making Recreation Program Coordinators a Cost Neutral Expense

Recreation programs are good thing for the City and the community. They promote healthy, active and involved lifestyles. They also Potential Annual
help ensure that City facilities are used. From this perspective recreation programs are an important part of the City’s operation. Savings ~ $150K
Q.8 Recreation programs are priced at a level that enables recovery of direct expenses for each program- namely instructor time and some Loaded Salaries
materials / supplies. Recreation programs do not offset recreation coordinator costs nor do they offset facility costs. for 3 Recreation
It is unlikely that recreation programs could be priced at a level that would recoup coordinator time and facility costs. However, it may Coordinators
be possible to price recreation programs at a level that coordinator time is paid for as well.
Request Aquatic Centre Cost Sharing / Consider 2 Tier Pricing for Recreation Programs
During the comparison with other municipalities, it was discovered that one of the municipalities uses 2 tier pricing for its aquatic Depends on
Q.9 centre. Prior to construction the municipality asked neighbouring districts and municipalities if they would contribute to the structure.
Outcomes
The neighbouring areas declined. After completion, the municipality introduced a 2 tier price system – one for local taxpayers and
another for out of jurisdiction taxpayers.
41
Recommendations
SOEC Core Review
The SOEC is an impressive facility that has required significant investment to establish. It is clear that this facility will require ongoing
support from the City. Further it is noted that the level of ongoing support that is required is much higher than originally anticipated
and current sits at approximately $1.75 – $2.0M per year. This represents a significant commitment of City resources.
During the review we discussed SOEC operations and planning with City Staff, Global Spectrum and external partners.
From these interviews and review of available financials there are several concerns that we would like to raise:
1. Financial estimates and operating plans for the facility have consistently failed to materialize Potential Annual
2. Anecdotally, staffing and salary levels for the SOEC are higher than expected Savings ~ $200K
Q.10 3. The City appears to bear the financial risk for operations + assumed
4. Convention business has apparently declined significantly avoided capital
expense $200K /
Most troubling, there does not appear to be a clear plan in place to reduce the financial exposure of the City to the SOEC.
Year
We recommend a core review of the SOEC to:
– Confirm the original intended purpose of the facility
– Assess the degree to which the current operations are meeting the original intended purpose
– Identify potential options to meet objectives of the facility and at the same time reduce operation cost exposure faced by
the City o Penticton
Create a Concise Parks Plan to Guide Planning and Investment

The parks committee has indicated that the current strategy and plan for the Parks is not a clear, concise and actionable document.
Further evidence of this fact is borne out by:
(1) Unclear commitment of the City to expanding a beach front park
Potential Annual
Q.11 (2) Inability of the Parks division to categorize and prioritize its spending on parks to come up with options for reducing parks
Savings ~ $200K
expense while minimizing public impact
We recommend that the City prepare a clear parks plan that identifies scope of parks responsibilities and desired long-
term investments for Parks in Penticton. This document will be helpful in ensuring spending cuts to recreation and parks
are pursued with a better understanding of the impacts on customers service.
42

43
Corporate Strategic Priorities
During the core review, we were not able to obtain overall strategic priorities for
Penticton other than those inferred from the Core Services Review RFP
Inferred Strategic Priorities
1
Operational Ensuring the City successfully and reliably fulfills its mandate
Effectiveness using an appropriate level of resources
Service Consistently achieving desired outcomes and valuing partners,

2
Improvement customers, council, taxpayers and internal staff in all interactions
Ensuring tax payers get the best value from City activities and
3 Tax Payer Value
ensuring the City maintains focus on its core mandate
4
Providing financial oversight, planning and restraint to minimize
Financial Stability
tax burden and ensure the City has a sound financial position
44
Corporate Strategic Priorities
Recommendations
Undertake a Strategic Planning Session

Council and Senior Management should undertake a strategic planning session to clarify overall strategic objectives and to confirm Organizational
ZA.1
strategic priorities for the coming 3-5 years. The output from this exercise should be used as a primary input to operational planning Effectiveness
by each team, department and the city as a whole.
45

46
Macro Labour Costs & Staffing Levels
We conducted several analyses to assess labour costs and staffing levels. Detailed
analysis is found in Appendix D.
Analysis Area Finding
Overall Operating Penticton operating costs are substantially higher than other municipalities – even after excluding all utilities. On
Expense average Penticton expenses are 40% higher than comparator municipalities.
Overall Staff Total Penticton compensation is 10% - 30% higher than other municipalities. We are not able to separate out
Compensation Utilities for this comparison.
A review of overall staffing levels, derived from reviewing organization charts indicates that Penticton headcount
levels are about 40% higher than comparison municipalities
Overall Staffing Levels
Penticton has a higher level of staffing when correcting for FT/MGR staff only and when excluding utility functions
and protective services.
We reviewed staffing for many teams and compared them to teams in other cities that provide the same function.
Staffing for Specific
In many teams we found Penticton staffing higher than peers. In some teams we found staffing equivalent or
Functions lower.
47
Recommendations
Undertake Additional Staff Compensation Review As Soon As Possible to Support Wage Negotiations
The findings from review of union positions wages highlight significant wage discrepancies with private sector. This comparison did
not examine entitlements and benefits – which for fulltime staff would further widen the public sector / private sector gap.
ZB.1 We recommend conducting a salary review for roles throughout the organization to support wage negotiations with the Union, and to Cost Control
inform outsourcing decisions.
This recommendation is made to provide a reference to market rates and to ensure wages paid by the City are appropriate for both
workers and taxpayers.
48

49
Organization Structure
In order to improve organization governance and to realize reduction in management
positions Penticton will need to consider alternative organization structures.
Initial Options
Option Description Assessment
Functional • City is separated along lines of core functions • Preferred Model

Organization • CFO role is clarified and emphasized
• Planning & inspection are joined under a single manager
• Utilities are combine under a single General Manager
• Operations scope is focussed on public works
Incremental • Same primary structure as current structure • Inappropriate structure

Organization • Some manager positions eliminated • Does not enable City to
resolve critical issues
Deputy CAO • Based on functional organization model • Not preferred model

Model • Creation of Deputy CAO role • Elements may be worth
consideration
50
Recommended Option – Functional Organization 1
This option presents an organization that is organized to emphasize clear functions and
to promote leadership / delegation for each function
Enables reduction of 4-6 management positions
Fire Chief
CAO
Officer In
Charge
Corporate Development
CFO Utilities Operations Recreation
Administration Services
• Revenue Collection • Information Technology • Electric Utility • Public Works • Facilities • Planning
• Financial Reporting • Human Resources • Water & Waste Water • Engineering for Public • Recreation • Inspections & Regulatory
and Accounting • City Clerk Utility Works • Parks Functions
• Purchasing • Fire • Vehicle Maintenance • SOEC • Engineering for Permits
• RCMP
Further definition of the organization structure should be pursued in conjunction

with the senior management team
51
Recommended Option – Functional Organization 2
This option presents an organization that is organized to emphasize clear functions and
to promote leadership / delegation for each function
Human
Fire Chief
Resources
CAO
Officer In
City Clerk
Charge
Financial Development
Operations Recreation
Services Services
• Revenue Collection • Public Works • Facilities • Planning & Land use

• Financial Reporting • Engineering for Public • Recreation • Inspections & Regulatory
and Accounting Works • Parks Functions
• Purchasing • Vehicle Maintenance • SOEC & PTCC • Engineering for Permits
• IT • Utilities: Water, Waste • Cultural Services • Business Licensing
• RCMP Administration Water, Electric
52
Alternative Option – Incremental Change to Current Organization
This option presents an organization that is organized as it is now, with minor changes.
This does not address existing governance challenges, and does not provide for a
strong CFO position.
HR
CAO
City Clerk
Engineering &
Corporate
Development Recreation
Administration
Services
• Electric Utility GM • Planning • Rec & Culture Manager
• Electric Utility Ops Manager • Regulatory Services • Recreation Supervisor
• IT Manager • Inspection Services • Recreation Business
• Treasurer • Engineering – Works Supervisor
• Deputy Treasurer • Engineering – Permits • Museum Manager
• Revenue Supervisor • Works Manager • Parks & Facilities Manager
• Purchasing Manager • Superintendent of Works • Facilities Supervisor
• RCMP Admin • Fleet Maintenance • Parks Supervisor
• Fire • Water Treatment Utility • Cemetery Operations
• Waste Water Treatment
Utility
-1 Mgr -1 Mgr -2 Mgr
53
Alternative Option 2 – Deputy CAO Model
This option combines outside workers into a single team and clearly identifies a Deputy
CAO for succession.
Fire Chief
Officer In
CAO Charge
Deputy CAO
• Recreation
• Facilities
• Information Technology
CFO Utilities Outside Permits • Human Resources
• City Clerk
• Fire
• Electric Utility • RCMP
• Revenue Collection • Public Works • Planning
• Water & Waste Water
• Financial Reporting • Parks • Inspections & Regulatory
Utility
and Accounting • Engineering for Public Functions
• Purchasing Works • Engineering for Permits
• Vehicle Maintenance
54
Organization Chart
Recommendations
Penticton should pursue a formal re-organization project
Re-structuring an organization is an involved process with significant risks that must be managed and with may important decisions
to be made. Specific activities and decisions include:
1. Selecting proposed structure
2. Selecting leaders for each position in the structure
Cost Savings,
ZC.1 3. Transitioning some leaders out of the organization
Accountability
4. Recruiting new leaders to fill critical roles
5. Providing communication with staff and managers throughout the process
6. Identifying a transition plan to achieve the new structure
Ideally, many of the activities and decisions should be completed working with key members of the management team to ensure the
process benefits from the collective management experience in the organization.
55

56
Financial and Budgeting Practices
During the core services review we requested and received various financial reports
and financial plans.
Levels of Financial Practices Assessment Summary
Long-Term Planning Preparing long-term forecasts of revenue The City uses a 5 year financial plan that did
and costs using best available information not contain useful information and was not
to inform strategic decision making used to guide major city decisions
Annual City Planning Identifying and planning for annual financial City has an extensive detailed reporting system
requirements given operating plans, City is reactive in assessing future years
strategic directions and key objectives funding requirements
City does not appear to link funding to workload
service objectives or service requirements
Department / Team Operating plans that outline goals, City does not appear to use annual operations
Planning objectives, service levels resources and plans that integrate financials, operations and
funding. service objectives
Cost Allocation / Ensuring costs are attributed to appropriate Costs are not always accounted for accurately
Reporting accounts. Ensuring that account reporting – for example some facility costs are attributed
has operational significance to the wrong facility
Reporting accounts do not meet operational
needs
57
Recommendations
Request Accurate 5 Year Financial Plan
The City should request an accurate 5 year financial plan be prepared that properly characterizes financial impacts of decisions that
have been made and decisions yet to be made. The 5 year financial plan should be used to keep Council and the City apprised of:
- Long Term Financial Health of the City
ZD.1 - Implications of Major Service Delivery Decision Accountability
Further, we would suggest that the City keep the 5 year financial plan up-to-date on a yearly cycle, and that a summary
of the financial plan be shared with the public to promote open and transparent governance and accountability to
taxpayers.
Implement Integrated Annual Planning
The City should request that each manager prepare an annual plan for their team as an input to the City Annual Plan. The team
annual plan will review team mandate, prior year performance, new objectives and strategic direction. It will review proposed
resources for the coming year and quantify staffing levels, requested budget, service delivery targets and service objectives. It will
also provide a linkage of resources to work activities and objectives. Finally, it will include a comparison of proposed budget with
previous year actuals and include an explanation for changes. Internal
ZD.2 Management
The value of this plan is three fold:
(1) It provides a clear means of embedding new strategic directions in operating plans for each team
(2) It provides a justification for resource levels
(3) It provides a bottom up input into the strategic plan and can be used as a baseline for performance assessment
throughout the year
Request Accurate Attribution of Costs

Going foreword, the City should reiterate its policy of accurately attributing costs and revenues to appropriate accounts. Internal
ZD.3
It is not clear if reported instances of miscategorization are material. However, as a rule, financial costs should be Management
properly attributed.
Revise Account Structure
Revise the account structure to ensure it meets the needs of finance and operations. The account structure will need to Internal
ZD.4 be flexible to accommodate ongoing refinements as needed. This activity is an important enabler to allow for ongoing Management
financial reporting in a manner that is used by operational managers and that can be used to regularly assess
performance relative to objectives laid out in the integrated annual plan.
58

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City of Penticton, Core Services Review

Detailed Findings Report

2 Identify services and activities not mandated by legislation or Council

3 Determine if discretionary programs can be altered / discontinued to become more cost-efficient

4 Identify service improvement opportunities, including shared services

5 Identify opportunities to become more accountable to citizens

9 Review financial and budgeting practices

A comparison of the City of Penticton to 5 other BC municipalities

2 Penticton is not in a healthy financial position

3 Penticton management salaries are not higher than peer cities

4 Penticton does appear to have more management positions than needed

Specific Objectives from RFP

2 Identify services and activities not mandated by legislation or Council

3 Determine if discretionary programs can be altered / discontinued to become more cost-efficient

4 Identify service improvement opportunities, including shared services

5 Identify opportunities to become more accountable to citizens

9 Review financial and budgeting practices

Level of Service Description

This service is offered by some but not all surveyed municipalities

This service is offered by no other surveyed municipalities

Utilities & Infrastructure Non-Recreation Services Recreation & Other Services

Legend Mandated Service Foundational Service Discretionary Service

Develop, maintain and operate transmission infrastructure for Penticton

Waste Water Collection Maintaining network of sewers Foundational

Water Distribution Maintaining network of treated water pipes Foundational

Roads Maintenance Maintaining roads, sidewalks and traffic infrastructure Foundational

Garbage Collection &

Community Plan Maintaining an Official Community Plan Mandated

Museum / Library Providing a public library and a public museum Discretionary

Cemetery Operations Maintaining, upgrading and operating a cemetery Discretionary

Pool Aquatic facility Discretionary

Cemetery Civic operated cemetery Discretionary

Specific Objectives from RFP

2 Identify services and activities not mandated by legislation or Council

3 Determine if discretionary programs can be altered / discontinued to become more cost-efficient

4 Identify service improvement opportunities, including shared services

5 Identify opportunities to become more accountable to citizens

9 Review financial and budgeting practices

5 Year Financial Forecast

Restrain Future Fire Service Spending

Recommendations Please See Next Page

Sidewalks This size of Penticton infrastructure appears to be similar to other municipalities.

Project Level Performance Management

Investigate Ridership and Routes

Maintain Garbage Collection as an Outsourced Activity

Investigate Cost of Service Delivery for N. Cowichan and P. Moody Potential

Investigate Availability of Large Job Maintenance Services in Penticton

Create Cost Performance Reporting for the Vehicle Maintenance Function

Investigate Coordinated Purchasing

Monitor the Delivery of Human Resources Department; Increase Staffing as Required

Provide Health and Safety as a Shared Service to RDOS Municipalities

Examine and Eliminate Relief Budgets

Manager & Staff Performance Management

Providing legal support where needed − Manager

Attending to a broad range of administrative − Deputy Clerk

Provide Health and Safety as a Shared Service to RDOS Municipalities Service

Provide Health and Safety as a Shared Service to RDOS Municipalities Service

Introduce an Exempt Assistant to the Mayor and CAO Service

Fill the Senior Planner Position as Soon as Possible

Authorize Commitment of Additional Contract Spending with Targeted Deliverables

Restructure the Planning, Regulatory and Engineering Departments

Customer Review / Ombudsperson

Adherence to Bylaws and Regulation

Reduce Parks Expense