Report 2016-111 All Recommendation Responses

Report 2016-111: City of Irwindale: It Must Exercise More Fiscal Responsibility Over Its Spending So That It Can Continue to Provide Core Services to Residents (Release Date: November 2016)

Recommendation #1 To: Irwindale, City of

To address the structural deficit in its general fund, the city should seek long-term solutions to balance its budget so that its expenditures do not exceed its revenues. These solutions should include eliminating the reliance on one-time gains to fund ongoing expenses and identifying opportunities to further reduce spending. The city should document its approach in a long-term financial plan that should account for the following: a forecast of at least five to 10 years into the future, updates to long-term planning activities as needed to provide direction to the budget process, and an analysis of its financial status; revenue and expenditure forecasts; and plan-monitoring mechanisms, such as a scorecard of key indicators of financial health.

Annual Follow-Up Agency Response From October 2019

On July 15, 2019 the Irwindale City Council formally approved a Long-Term Financial Plan, which includes revenue and expenditure projections for the next 20 years. This report discusses the efforts the City has made to maintain a balanced budget for the past several years, including the current fiscal year. The report also outlines the City's strategies moving forward to address future budget shortfalls.

It should be noted that the City has raised its General Fund Balance to over $30 million, which is higher than its pre-recession levels. With its strong financial reserves, the City was able to paydown its CalPERS Unfunded Actuariual Liability (UAL), which will help control future operating penson cost increases. As of July 2019, the City has paid $21 million toward its UAL, effectively eliminating its UAL balance. The City of Irwindale is one of very few cities in the State to do so.

Additionally, the City has placed a measure for the 11/5/2019 Special Election to increase its local sales tax rate by .75% to generate additional General Fund Revenue.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

We reviewed the city's long-term financial plan (plan). Although the city balanced the budget for fiscal year 2019-20, its plan projects ongoing general fund deficits beginning in fiscal year 2020-21 through 2038-39. The city has identified new development projects and a sales tax increase that may provide additional revenue in the future. However, the city's plan shows that its police department is the single largest expenditure in fiscal year 2019-20. We believe the city should re-evaluate the possibility of contracting for police services as an alternative to operating its own police department. As we have previously reported, in 2009 the Los Angeles County Sheriff's Department (sheriff department) performed an initial study of the city's police department at the request of the city, resulting in a proposal to provide policing services to the city that would reduce its annual costs by 25 percent ($1.8 million at the time) and increase the number of sworn law enforcement personnel by 11 percent. Notwithstanding, the council did not vote to explore this opportunity further. Additionally, we continue to believe that the city could reduce costs by implementing our recommendation to consider revising or eliminating its current resident prescription drug benefit program (the city spent $1 million for this program in fiscal year 2015-16) and replacing it with the prescription discount card program offered by the League of California Cities that would provide discounts on prescriptions to residents at no cost to the city. The city has indicated that it will not implement either of these recommendations to reduce costs.

Annual Follow-Up Agency Response From October 2018

The City of Irwindale has actually eliminated its structural deficit since FY 2015-16, as evidenced by its 2016 and 2017 CAFR's, as well as Pre-Audit Financials for its upcoming 2018 CAFR. The City has adopted balance budgets for both FY 2017-18 and FY 2018-19. The City implemented many cost reduction strategies over the years, as well as generated additional General Fund revenue through its economic development strategies to reach the goal of having a balance operating budget. Additionally, the City has raised its General Fund Balance Reserves to over $30 million, which is higher than its pre-recession levels.

As part of the City's Long Term Financial Planning, the City recognized it needed to adopt Development Impact Fees (Ordinance adopted 7/11/2018), as well as implement a Cost Allocation plan and User Fee Study (Resolution to be adopted 11/14/2018) to bring in additional future revenue. Also, the City has implemented a plan to reduce its pension operating costs by paying down its CalPERS Unfunded Actuarial Liability using Fund Balance Reserves (Resolution adopted 6/27/2018).

The City had started work on its Long Term Financial Plan (see contract with consultant RSG dated October 2017), but felt that completing the substantial financial strategies listed above, would allow the City to develop a more accurate Long-Term Financial Plan. With these long & short term financial strategies in place, the City is now moving forward with finalizing the Long Term Financial Plan, and will complete it in February 2019 as part of the City's FY 2018-19 Mid-Year Financial Review.

Supporting documentation will be submitted via email.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

1-Year Agency Response

The City has been actively working to eliminate its operating budget deficit. Over the past few years, the budget deficit has been reduced significantly every year, and for FY 2017-18 the City is proud to have now adopted a balanced budget. A copy of the adopted FY 2017-18 Annual Budget is being submitted with this response, and will reflect an operating surplus of $838,783.

Additionally, the City has realized significant one-time revenues that have continued to increase its General Fund Balance Reserves. The non-restricted General Fund Balance for fiscal year ended June 30, 2017 is $30.6 million, and is now significantly higher than pre-recession General Fund Balance Reserves. The City's CAFR will be finalized in December 2017, however a copy of the draft financial statements is being submitted with this response.

The City is in the process of preparing its Long-Term Financial Plan. The City has elected to contract with RSG, Inc for assistance with this project. The Long-Term Financial Plan is projected to be completed by January 2018. A copy of the City's contract with RSG, Inc for these services is being submitted with this response.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

We reviewed the adopted 2017-18 budget in which the city was able to balance its budget and the draft comprehensive annual financial report. We also reviewed the contract for the long-term financial plan and look forward to reviewing the plan once it is completed.

6-Month Agency Response

The Finance Department has been actively preparing long-term estimates and projections, particularly in light of the recent CalPERS Discount Rate Impact. We are incorporating these recent developments in our calculations. Additionally, we have reviewed various styles of Long-Term Financial Plan documents, and we are working with a consultant to determine the best fit for our Council and Agency. We expect to have a this financial plan completed by the the next response due date in November.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

The Long-Term Financial Plan will be prepared in conjunction with the Fiscal Year 2017-18 Budget Process.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #2 To: Irwindale, City of

To ensure that employee compensation aligns with job statements, the city should review its salary incentives and modify the eligibility criteria so that they match the job requirements.

Annual Follow-Up Agency Response From October 2022

On April 28, 2021, The City hired a consultant to perform a compensation study to survey both full and part-time positions and review job classifications for certain positions. On March 9, 2022, The City reached an agreement with it affiliated employee associations' extending the term for 3 years with a Cost of Leaving Adjustment of 3% for fiscal years starting July 1, 2022, and July 1, 2023, respectively.

The City also hired a Housing Coordinator on August 22, 2022, to assist residents with all City Housing Authority related issues.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

The city provided documentation of revisions it made to its agreements with employees. The documentation indicated that the city had removed the incentive of tuition reimbursement for management employees, which we noted in the report was the incentive that in particular appears to be unnecessary for upper management employees who are required to have high levels of education to even qualify for their positions.

1-Year Agency Response

The City conducted an extensive Classification and Compensation Study to establish accurate job classifications and determine the equitable and competitive compensation for each position. The results of this study were presented to the City Council during their Council Meeting on 5/10/2017. A copy of the Council Agenda Report and the Compensation Study Report is being submitted with this response.

After substantial review and meetings with all employee associations, the Classifications and Compensation Study results were adopted by way of a Compensation Resolution 2017-81-2979 that was adopted on 10/25/2017. A copy of the Compensation Resolution is being submitted with this response.

California State Auditor's Assessment of 1-Year Status: Will Not Implement

Despite the city completing the compensation and classification study, it did not modify the criteria for salary incentives.

6-Month Agency Response

The City has presented the Classification and Compenstion Study to the City Council during their regular Council Meeting on 5/10/2017. Our HR Staff is currently working with the City's three employee associations to ensure all comments or concerns have been addressed. It is expected that the Classification portion of this report will be approved in the next couple of months.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

The City is in the final stages of a Classification and Compensation Study where all City Job descriptions are being updated with respect to duties and eligibility criteria.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #3 To: Irwindale, City of

Considering that the city's retirement benefits are more generous than those of most comparable cities, and in light of its financial situation, the city should reduce its employee benefits costs by negotiating with employee bargaining groups and key management employees for the elimination of further city contributions to the PARS supplemental benefit plan or at least and increase in participant contributions to cover the full employee share of the plan's costs, recognizing that under California case law the city may not destroy vested pension rights legislatively.

Annual Follow-Up Agency Response From October 2018

Changes to employee benefits can only be made during Labor Negotiations, which take place approximately every three years.

The City completed labor negotiations for the term 2016 - 2020 and the City Council approved Tentative Agreements with all bargaining units reflecting negotiated changes on October 25, 2017. The final MOUs are being prepared and will be presented to City Council for approval on November 14, 2018. The labor negotiations were extensive and took several months. Although City management worked hard to incorporate cost-saving benefit changes during the labor negotiations, the Increase of PARS Participant Contributions was not one of the items that was agreed to by the employee associations.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

We believe the city should continue to pursue the elimination of further city contributions to the PARS supplemental benefit plan or an increase in participant contributions to cover the full employee share of the plan's costs in future labor negotiations.

1-Year Agency Response

Changes to employee benefits can only be made during Labor Negotiations, which take place approximately every three years.

The City recently completed labor negotiations for new 3-year MOU's with each of the employee associations. The labor negotiations were extensive and took several months. The final MOU's for each of the employee associations are projected to be finalized and presented to the City Council during one of their council meetings in January 2018. Although City management worked hard to incorporate cost saving benefit changes during the labor negotiations, the Increase of PARS Participant contributions was not one of the items that was agreed to by the employee associations.

California State Auditor's Assessment of 1-Year Status: Will Not Implement

We believe the city should continue to pursue an increase in participant contributions to cover the full employee share of the plan's costs in future labor negotiations.

6-Month Agency Response

Changes to empoyee benefits can only be made during Labor Negotations, which take place approximately every three years.

The City will begin active negotiations in the coming fiscal year, which will allow for the opportunity to negotiate for an increase of PARS employee contributions.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

Any changes to employee benefits can only be changed during Labor Negotiations, which take place approximately every 3 years.

California State Auditor's Assessment of 60-Day Status: No Action Taken

Recommendation #4 To: Irwindale, City of

To minimize the use of its reserves to reduce long-term liabilities, the city should annually determine whether it has sufficient funding to cash out employee leave balances. Additionally, in future labor negotiations, the city should explore the possibility of eliminating or reducing voluntary leave balance cash-outs by employees, and eliminate sick leave cash-outs altogether.

Annual Follow-Up Agency Response From October 2018

Changes to employee benefits can only be made during Labor Negotiations, which take place approximately every three years.

The City completed labor negotiations for the term 2016 - 2020 and the City Council approved Tentative Agreements with all bargaining units reflecting negotiated changes on October 25, 2017. The final MOUs are being prepared and will be presented to City Council for approval on November 14, 2018. The labor negotiations were extensive and took several months. Although City management worked hard to incorporate cost-saving benefit changes during the labor negotiations, the Reduction of Leave Cashouts was not one of the items that was agreed to by the employee associations.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

We believe the city should continue to pursue elimination or reductions of leave balance cash-outs by employees in future labor negotiations.

1-Year Agency Response

Changes to employee benefits can only be made during Labor Negotiations, which take place approximately every three years.

The City recently completed labor negotiations for new 3-year MOU's with each of the employee associations. The labor negotiations were extensive and took several months. The final MOU's for each of the employee associations are projected to be finalized and presented to the City Council during one of their council meetings in January 2018. Although City management worked hard to incorporate cost saving benefit changes during the labor negotiations, the Reductions of Leave Cashouts was not one of the items that was agreed to by the employee associations.

California State Auditor's Assessment of 1-Year Status: Will Not Implement

We believe the city should continue to pursue elimination or reductions of leave balance cash-outs by employees in future labor negotiations.

6-Month Agency Response

Changes to empoyee benefits can only be made during Labor Negotations, which take place approximately every three years.

The City will begin active negotiations in the coming fiscal year, which will allow for the opportunity to negotiate a reduction of Leave Cashouts.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

Any changes to employee benefits can only be changed during Labor Negotiations, which take place approximately every 3 years.

California State Auditor's Assessment of 60-Day Status: No Action Taken

Recommendation #5 To: Irwindale, City of

As a prudent financial practice, the city should collect receipts for all reimbursable council expenses and update its expense reimbursement policy to eliminate exceptions to this rule.

Annual Follow-Up Agency Response From October 2018

Ordinance No. 730 was adopted on 8/8/2018 which eliminated the flat rate reimbursement payment to Councilmembers for their monthly expenses. Council members are now required to submit receipts for all expenditures, even local meetings, and are no longer receiving a flat reimbursement rate.

Copy of Ordinance No 730 to be submitted via email.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

1-Year Agency Response

The Finance Department will work on updating the Expense Reimbursement before the end of the current fiscal year.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

The Finance Department will work on updating this Expense Reimbursement Policy early in this upcoming fiscal year.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

The City will consider updating it Expense Reimbursement Policy during the next fiscal year.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #6 To: Irwindale, City of

To reduce costs, the city should consider eliminating its current resident prescription drug benefit program and replacing it with the prescription discount card program offered by the League of California Cities that would provide discounts on prescriptions to residents at no cost to the city.

Annual Follow-Up Agency Response From October 2018

The City strongly believes this is a necessary program for its residents in light of their long-term exposure to the negative health impacts of extensive mining activities in the City. The City had documented the need for these programs in its adoption of findings that the prescription program serves valid public interests.

Please see Resolution No. 2012-23-2562, to be submitted via email.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

We continue to be puzzled by Irwindale's vehement defense of its prescription drug program. This program costs the city nearly $1 million each year, and disproportionately benefits a very small segment of its population. In addition, the city has neither adequately demonstrated the need for the program nor made sure it is cost effective. There is a cost-free alternative program offered by the League of California Cities that Irwindale could put in place.

1-Year Agency Response

The City strongly believes this is a necessary program for its residents in light of the extensive mining activities in the City.

California State Auditor's Assessment of 1-Year Status: Will Not Implement

We continue to be puzzled by Irwindale's vehement defense of its prescription drug program. This program costs the city nearly $1 million each year, and disproportionately benefits a very small segment of its population. In addition, the city has neither adequately demonstrated the need for the program nor made sure it is cost effective. There is a cost-free alternative program offered by the League of California Cities that Irwindale could put in place.

6-Month Agency Response

The City strongly believes this is a necessary program for its residents in light of the extensive mining activities in the City.

California State Auditor's Assessment of 6-Month Status: Will Not Implement

We continue to be puzzled by Irwindale's vehement defense of its prescription drug program. This program costs the city nearly $1 million each year, and disproportionately benefits a very small segment of its population. In addition, the city has neither adequately demonstrated the need for the program nor made sure it is cost effective. There is a cost-free alternative program offered by the League of California Cities that Irwindale could put in place.

60-Day Agency Response

The City strongly believes this is a necessary program for its residents in light of the extensive mining activities in the City.

California State Auditor's Assessment of 60-Day Status: Will Not Implement

We continue to be puzzled by Irwindale's vehement defense of its prescription drug program. This program costs the city nearly $1 million each year, and disproportionately benefits a very small segment of its population. In addition, the city has neither adequately demonstrated the need for the program nor made sure it is cost effective. There is a cost-free alternative program offered by the League of California Cities that Irwindale could put in place.

Recommendation #7 To: Irwindale, City of

If the city chooses not to participate in the prescription discount card program offered by the League of California Cities, it should at least take the following step related to its current prescription drug benefit program: Align its prescription drug benefit program with its established purpose--to treat conditions proven to be caused or worsened by the city's mining activities--and limit the availability of benefits to only those medications approved for the treatment of such conditions.

1-Year Agency Response

There is no reliable way to determine which conditions are or are not a result of long-term mining activity exposure. Investigating this would be very cost prohibitive, offsetting any potential savings, and could likely violate medical privacy laws.

California State Auditor's Assessment of 1-Year Status: Will Not Implement

We stand by our recommendation that Irwindale should at least align its prescription drug benefit program with its established purpose--to treat conditions proven to be caused or worsened by the city's mining activities--and limit the availability of benefits to only those medications approved for the treatment of such conditions.

6-Month Agency Response

There is no reliable way to determine which conditions are or are not a result of long-term mining activity exposure. Investigating this would be very cost prohibitive, offsetting any potential savings, and could likely violate medical privacy laws.

California State Auditor's Assessment of 6-Month Status: Will Not Implement

We stand by our recommendation that Irwindale should at least align its prescription drug benefit program with its established purpose--to treat conditions proven to be caused or worsened by the city's mining activities--and limit the availability of benefits to only those medications approved for the treatment of such conditions.

60-Day Agency Response

There is no reliable way to determine which conditions are or are not a result of long-term mining activity exposure. Investigating this would certainly be very cost prohibitive, offsetting any savings, and very likely a violation of medical privacy laws.

California State Auditor's Assessment of 60-Day Status: Will Not Implement

We stand by our recommendation that Irwindale should at least align its prescription drug benefit program with its established purpose--to treat conditions proven to be caused or worsened by the city's mining activities--and limit the availability of benefits to only those medications approved for the treatment of such conditions.

Recommendation #8 To: Irwindale, City of

If the city chooses not to participate in the prescription discount card program offered by the League of California Cities, it should at least reduce the cost of its current prescription drug benefit program by enacting limits--similar to those in its resident vision benefits--on the number or dollar amount of prescriptions an individual can receive each year.

1-Year Agency Response

The City will continue to explore all options for reducing these costs. As stated in the City's November 8th 2016 response letter: "...the Irwindale City Council remains committed to continuing its efforts to further reduce the costs of its resident benefit program. Irwindale staff remains vigilant in reviewing options for the program to be more cost effective, without compromising Irwindale's mission of repaying its residents for the years of exposure to the effects of mining."

California State Auditor's Assessment of 1-Year Status: Will Not Implement

Irwindale overstates its efforts to reduce costs. As we state in our report, the city has been reluctant to implement changes to its prescription drug benefit program. Specifically, the city council rescinded increases it had previously made to the copayment requirement and rejected its consultant's more significant recommendations to increase the copayment for all participants to $10 and to implement a coordination of benefits that would make Irwindale's program a secondary payer to residents' private health insurance.

6-Month Agency Response

The City will continue to explore all options for reducing these costs. As stated in the City's November 8th response letter: "...the Irwindale City Council remains committed to continuing its efforts to further reduce the costs of its resident benefit program. Irwindale staff remains vigilant in reviewing options for the program to be more cost effective, without compromising Irwindale's mission of repaying its residents for the years of exposure to the effects of mining."

California State Auditor's Assessment of 6-Month Status: Will Not Implement

Irwindale overstates its efforts to reduce costs. As we state in our report, the city has been reluctant to implement changes to its prescription drug benefit program. Specifically, the city council rescinded increases it had previously made to the copayment requirement and rejected its consultant's more significant recommendations to increase the copayment for all participants to $10 and to implement a coordination of benefits that would make Irwindale's program a secondary payer to residents' private health insurance.

60-Day Agency Response

The City will continue to explore all options for reducing these costs, as stated in the City's November 8th response letter: "...the Irwindale City Council remains committed to continuing its efforts to further reduce the costs of its resident benefit program. Irwindale staff remains vigilant in reviewing options for the program to be more cost effective, without compromising Irwindale's mission of repaying its residents for the years of exposure to the effects of mining."

California State Auditor's Assessment of 60-Day Status: Will Not Implement

Irwindale overstates its efforts to reduce costs. As we state in our report, the city has been reluctant to implement changes to its prescription drug benefit program. Specifically, the city council rescinded increases it had previously made to the copayment requirement and rejected its consultant's more significant recommendations to increase the copayment for all participants to $10 and to implement a coordination of benefits that would make Irwindale's program a secondary payer to residents' private health insurance.

Recommendation #9 To: Irwindale, City of

To reduce the costs of its resident prescription drug benefit program, the city council should follow the recommendations of its consultant by approving the following: align copayments by increasing those paid by residents 50 years of age and older to the same level as those paid by residents who are 49 years or younger.

1-Year Agency Response

The City will continue to explore all options for reducing these costs. As stated in the City's November 8th 2016 response letter: "...the Irwindale City Council remains committed to continuing its efforts to further reduce the costs of its resident benefit program. Irwindale staff remains vigilant in reviewing options for the program to be more cost effective, without compromising Irwindale's mission of repaying its residents for the years of exposure to the effects of mining."

California State Auditor's Assessment of 1-Year Status: Will Not Implement

Irwindale overstates its efforts to reduce costs. As we state in our report, the city has been reluctant to implement changes to its prescription drug benefit program. Specifically, the city council rescinded increases it had previously made to the copayment requirement and rejected its consultant's more significant recommendations to increase the copayment for all participants to $10 and to implement a coordination of benefits that would make Irwindale's program a secondary payer to residents' private health insurance.

6-Month Agency Response

The City will continue to explore all options for reducing these costs. As stated in the City's November 8th response letter: "...the Irwindale City Council remains committed to continuing its efforts to further reduce the costs of its resident benefit program. Irwindale staff remains vigilant in reviewing options for the program to be more cost effective, without compromising Irwindale's mission of repaying its residents for the years of exposure to the effects of mining."

California State Auditor's Assessment of 6-Month Status: Will Not Implement

Irwindale overstates its efforts to reduce costs. As we state in our report, the city has been reluctant to implement changes to its prescription drug benefit program. Specifically, the city council rescinded increases it had previously made to the copayment requirement and rejected its consultant's more significant recommendations to increase the copayment for all participants to $10 and to implement a coordination of benefits that would make Irwindale's program a secondary payer to residents' private health insurance.

60-Day Agency Response

The City will continue to explore all options for reducing these costs, as stated in the City's November 8th response letter: "...the Irwindale City Council remains committed to continuing its efforts to further reduce the costs of its resident benefit program. Irwindale staff remains vigilant in reviewing options for the program to be more cost effective, without compromising Irwindale's mission of repaying its residents for the years of exposure to the effects of mining."

California State Auditor's Assessment of 60-Day Status: Will Not Implement

Irwindale overstates its efforts to reduce costs. As we state in our report, the city has been reluctant to implement changes to its prescription drug benefit program. Specifically, the city council rescinded increases it had previously made to the copayment requirement and rejected its consultant's more significant recommendations to increase the copayment for all participants to $10 and to implement a coordination of benefits that would make Irwindale's program a secondary payer to residents' private health insurance.

Recommendation #10 To: Irwindale, City of

To reduce the costs of its resident prescription drug benefit program, the city council should follow the recommendations of its consultant by approving the following: implement coordination of benefits provisions, where applicable, to designate the city as a secondary payer to residents' primary insurance coverage.

1-Year Agency Response

The City will continue to explore all options for reducing these costs. As stated in the City's November 8th2016 response letter: "...the Irwindale City Council remains committed to continuing its efforts to further reduce the costs of its resident benefit program. Irwindale staff remains vigilant in reviewing options for the program to be more cost effective, without compromising Irwindale's mission of repaying its residents for the years of exposure to the effects of mining."

California State Auditor's Assessment of 1-Year Status: Will Not Implement

Irwindale overstates its efforts to reduce costs. As we state in our report, the city has been reluctant to implement changes to its prescription drug benefit program. Specifically, the city council rescinded increases it had previously made to the copayment requirement and rejected its consultant's more significant recommendations to increase the copayment for all participants to $10 and to implement a coordination of benefits that would make Irwindale's program a secondary payer to residents' private health insurance.

6-Month Agency Response

The City will continue to explore all options for reducing these costs. As stated in the City's November 8th response letter: "...the Irwindale City Council remains committed to continuing its efforts to further reduce the costs of its resident benefit program. Irwindale staff remains vigilant in reviewing options for the program to be more cost effective, without compromising Irwindale's mission of repaying its residents for the years of exposure to the effects of mining."

California State Auditor's Assessment of 6-Month Status: Will Not Implement

Irwindale overstates its efforts to reduce costs. As we state in our report, the city has been reluctant to implement changes to its prescription drug benefit program. Specifically, the city council rescinded increases it had previously made to the copayment requirement and rejected its consultant's more significant recommendations to increase the copayment for all participants to $10 and to implement a coordination of benefits that would make Irwindale's program a secondary payer to residents' private health insurance.

60-Day Agency Response

The City will continue to explore all options for reducing these costs, as stated in the City's November 8th response letter: "...the Irwindale City Council remains committed to continuing its efforts to further reduce the costs of its resident benefit program. Irwindale staff remains vigilant in reviewing options for the program to be more cost effective, without compromising Irwindale's mission of repaying its residents for the years of exposure to the effects of mining."

California State Auditor's Assessment of 60-Day Status: Will Not Implement

Irwindale overstates its efforts to reduce costs. As we state in our report, the city has been reluctant to implement changes to its prescription drug benefit program. Specifically, the city council rescinded increases it had previously made to the copayment requirement and rejected its consultant's more significant recommendations to increase the copayment for all participants to $10 and to implement a coordination of benefits that would make Irwindale's program a secondary payer to residents' private health insurance.

Recommendation #11 To: Irwindale, City of

To eliminate the need for police officer overtime, the city should evaluate the possibility of contracting for police services with the Los Angeles County Sheriff's Department or another law enforcement agency as an alternative to operating its own police department.

1-Year Agency Response

The City has analyzed the possibility of contracting with the Los Angeles County Sheriff's Department for police services in previous years. It was determined that option would not be in the best interest of the City's residents.

California State Auditor's Assessment of 1-Year Status: Will Not Implement

The city's response is misleading. In 2009 the Los Angeles County Sheriff's Department (sheriff department) performed an initial study of the city's police department at the request of the city, resulting in a proposal to provide policing services to the city that would reduce its annual costs by 25 percent ($1.8 million at the time) and increase the number of sworn law enforcement personnel by 11 percent. Notwithstanding, the council did not vote to explore this opportunity further. We believe that the mayor's explanation for not pursuing the second phase of the study was contradicted by the sheriff's department proposal. Consequently, we believe the city should re-evaluate the possibility of contracting for police services as an alternative to operating its own police department.

6-Month Agency Response

The City has analyzed the possibility of contracting with the Los Angeles County Sheriff's Department for police services in previous years. It was determined that option would not be in the best interest of the City's residents.

California State Auditor's Assessment of 6-Month Status: Will Not Implement

The city's response is misleading. In 2009 the Los Angeles County Sheriff's Department (sheriff department) performed an initial study of the city's police department at the request of the city, resulting in a proposal to provide policing services to the city that would reduce its annual costs by 25 percent ($1.8 million at the time) and increase the number of sworn law enforcement personnel by 11 percent. Notwithstanding, the council did not vote to explore this opportunity further. We believe that the mayor's explanation for not pursuing the second phase of the study were contradicted by the sheriff's department proposal. Consequently, we believe the city should re-evaluate the possibility of contracting for police services as an alternative to operating its own police department.

60-Day Agency Response

The City has analyzed the possibility of contracting with the Los Angeles County Sheriff's Department for police services in previous years. and it was determined that was not in the best interest of the City's residents.

California State Auditor's Assessment of 60-Day Status: Will Not Implement

The city's response is misleading. In 2009 the Los Angeles County Sheriff's Department (sheriff department) performed an initial study of the city's police department at the request of the city, resulting in a proposal to provide policing services to the city that would reduce its annual costs by 25 percent ($1.8 million at the time) and increase the number of sworn law enforcement personnel by 11 percent. Notwithstanding, the council did not vote to explore this opportunity further. We believe that the mayor's explanation for not pursuing the second phase of the study were contradicted by the sheriff's department proposal. Consequently, we believe the city should re-evaluate the possibility of contracting for police services as an alternative to operating its own police department.

Recommendation #12 To: Irwindale, City of

While the city is considering recommendation #11, and if it should choose not to contract for police services, it should ensure that its police department is adequately staffed by performing a staffing analysis that includes a determination of the costs and benefits of officer overtime versus hiring additional officers.

Annual Follow-Up Agency Response From October 2018

A cost analysis performed in the past resulted in a 19% hourly cost savings by scheduling overtime in lieu of hiring an additional officer, which would required full benefits and increasing pension costs. Additionally, as part of the recent labor negotiations, overtime reductions were not accepted by the Irwindale Police Officers Association. The City has however, fully filled all its vacancies and realized a substantial reduction of its officers out on disability which previously created the significant overtime impacts, thereby reducing the overall overtime currently needed.

California State Auditor's Assessment of Annual Follow-Up Status: Resolved

1-Year Agency Response

A cost analysis performed during the past fiscal year resulted in a 19% hourly cost savings by scheduling overtime in lieu of hiring an additional officer.

As a result of the recent adoption of the Classification and Compensation Study, salaries for Police Officers were adjusted. Therefore, the City will review this cost analysis once again with the updated salaries before the end of this fiscal year.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

A cost analysis performed during the past fiscal year resulted in a 19% hourly cost savings by scheduling overtime in lieu of hiring an additional officer.

Finance can perform another cost analysis before June 30th to re-confirm these findings, and we are happy to submit this to the State well in advance of our 1 year response due 11/29/2017.

Please advise if this is something we can submit on-line, outside of the pre-establish deadlines.

California State Auditor's Assessment of 6-Month Status: Pending

The city did not provide a copy of its cost analysis and its response does not address the adequacy of staffing levels in its police department.

60-Day Agency Response

The City has calculated the cost of overtime versus hiring additional officers. It was determined overtime costs approximately 19% less than the cost of an additional full-time officer. The City is agreeable to preparing an updated analysis of this cost comparison.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #13 To: Irwindale, City of

While the city is considering recommendation #11, and if it should choose not to contract for police services, it should promote public safety and equity among its police officers by implementing a rotational order for scheduled overtime to prevent some officers from working excessive shifts.

Annual Follow-Up Agency Response From October 2018

The distribution of overtime is negotiated during Labor Negotiations. The City recently completed labor negotiations for a 3 year contract, and the current overtime distribution method was approved by the Irwindale Police Officers' Association to remain in effect.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

In order to promote public safety and equity among its police officers, we stand by our recommendation and believe that the city should negotiate with the Irwindale Police Officers Association to implement a rotational order for scheduled overtime at its earliest opportunity.

1-Year Agency Response

The distribution of overtime is negotiated during Labor Negotiations. The current overtime distribution method was approved by the Irwindale Police Officers' Association during previous labor negotiations. Changes to employee benefits and work conditions can only be made during Labor Negotiations, which take place approximately every three years.

The City recently completed labor negotiations for new 3-year MOU's with each of the employee associations. The labor negotiations were extensive and took several months. The final MOU's for each of the employee associations are projected to be finalized and presented to the City Council during one of their council meetings in January 2018. Although City management worked hard to incorporate cost saving benefit changes during the labor negotiations, the Rotation of Schedule Overtime was not one of the items that was agreed to by the Irwindale Police Officer's Association.

California State Auditor's Assessment of 1-Year Status: Will Not Implement

In order to promote public safety and equity among its police officers, we stand by our recommendation and believe that the city should negotiate with the Irwindale Police Officers Association to implement a rotational order for scheduled overtime at its earliest opportunity.

6-Month Agency Response

The distribution of overtime is negotiated during Labor Negotiations. The current overtime distribution method was approved by the Irwindale Police Officers' Association during previous labor negotiations.

The City will begin active negotiations in the coming fiscal year, which will allow for the opportunity to negotiate a rotational order for scheduling overtime.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

The distribution of overtime is negotiated during Labor Negotiations. The current overtime distribution method was approved by the Irwindale Police Officers Association during previous labor negotiations.

California State Auditor's Assessment of 60-Day Status: Will Not Implement

Regardless of whether the overtime method was approved by the Irwindale Police Officers Association, it raises questions about public safety and favoritism. We stand by our recommendation and believe that the city should negotiate with the Irwindale Police Officers Association to implement a rotational order for scheduled overtime at its earliest opportunity.

Recommendation #14 To: Irwindale, City of

To help ensure that it receives the best value for contracts it exempts from competitive bidding, the city should revise its purchasing policy to require its staff to perform a price analysis and prepare a cost justification form and place the document in each contract file as evidence that the contract price is fair and reasonable.

Annual Follow-Up Agency Response From October 2019

Although the City's Purchasing Policy exempts professional services from competitive bidding, as is typical of most cities, the City nevertheless agrees that negotiating a fair and competitive price for its professional service contracts is important, as stated in the City's November 8th 2016 response letter.

On June 26, 2019, the City Council approved the updated Purchasing Policy which includes a form for departments to provide a cost justification when selecting professional services contracts that are exempt from the bidding process.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

We reviewed the updated purchasing policy and the cost justification form and found that, if implemented, they would address the concern we identified.

Annual Follow-Up Agency Response From October 2018

Although the City's Purchasing Policy exempts professional services from competitive bidding, as is typical of most cities, the City nevertheless agrees that negotiating a fair and competitive price for its professional service contracts is important, as stated in the City's November 8th 2016 response letter.

The City will be presenting an updated Purchasing Policy to include a Cost Justification form for Council approval on 11/14/2018.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

1-Year Agency Response

Although the City's Purchasing Policy exempts professional services from competitive bidding, the City agrees that negotiating a fair and competitive price for its professional service contracts is important, as stated in the City's November 8th 2016 response letter.

The City plans to update its Purchasing Policy during the current fiscal year.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

Although the City's Purchasing Policy exempts professional services from competitive bidding, the City agrees that negotiating a fair and competitive price for its professional service contracts is important, as stated in the City's November 8th response letter.

The City plans to update its Purchasing Policy during the upcoming fiscal year.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

Although the City's Purchasing Policy exempts professional services from competitive bidding, the City agrees that negotiating a fair and competitive price for its professional service contracts is important, as stated in the City's November 8th response letter. The City will consider revising its Purchasing Policy.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #15 To: Irwindale, City of

To help ensure that it receives good-quality services, the city should monitor all spending for contracted services. The city should also require its staff to perform post-contract evaluations of professional services contracts, particularly for those continuing services contracts it exempts from competitive bidding.

Annual Follow-Up Agency Response From October 2019

Although the City's Purchasing Policy exempts professional services from competitive bidding, as is typical of most cities, the City nevertheless agrees that negotiating a fair and competitive price for its professional service contracts and evaluating the performance is important, as stated in the City's November 8th 2016 response letter.

On June 26, 2019, the City Council approved the updated Purchasing Policy which includes a form for departments to provide a post contract evaluation for professional services completed to verify it received quality services.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

We reviewed the updated purchasing policy and the post contract evaluation form and found that, if implemented, they would address the concern we identified.

Annual Follow-Up Agency Response From October 2018

Although the City's Purchasing Policy exempts professional services from competitive bidding, as is typical of most cities, the City nevertheless agrees that negotiating a fair and competitive price for its professional service contracts and evaluating the performance is important, as stated in the City's November 8th 2016 response letter.

The City will be presenting an updated Purchasing Policy to include a Post Contract Evaluation form for Council approval on 11/14/2018.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

1-Year Agency Response

Although the City's Purchasing Policy exempts professional services from competitive bidding, the City agrees that negotiating a fair and competitive price for its professional service contracts is important, as stated in the City's November 8th 2016 response letter. The City plans to update its Purchasing Policy during the current fiscal year to include Post Contract Evaluations.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

Although the City's Purchasing Policy exempts professional services from competitive bidding, the City agrees that negotiating a fair and competitive price for its professional service contracts is important, as stated in the City's November 8th response letter.

The City plans to update its Purchasing Policy during the upcoming fiscal year.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

Although the City's Purchasing Policy exempts professional services from competitive bidding, the City agrees that negotiating a fair and competitive price for its professional service contracts is important, as stated in the City's November 8th response letter. The City will consider revising it Purchasing Policy.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #16 To: Irwindale, City of

The Housing Authority should consider options to provide low-income housing opportunities to more people. Additionally, if the Housing Authority intends to continue providing low-income housing opportunities in the future, the city should examine the available funding mechanisms to continue providing low-income housing before it exhausts its Housing Authority Fund balance.

1-Year Agency Response

Please refer to the City's audit response letter dated November 8, 2016.

California State Auditor's Assessment of 1-Year Status: Will Not Implement

The Housing Authority forgives generous loans that it has issued to the few participants of its low-income loan programs, and as a result is running out of funds for its future programs. As we state in our report, the city spent nearly $1 million dollars in its Mayans program to provide forgivable housing loans to three individuals. Given its limited funding, we believe the Housing Authority should consider options to provide opportunities to more people.

6-Month Agency Response

Please refer to the City's audit response letter dated November 8, 2016.

California State Auditor's Assessment of 6-Month Status: Will Not Implement

The Housing Authority forgives generous loans that it has issued to the few participants of its low-income loan programs, and as a result is running out of funds for its future programs. As we state in our report, the city spent nearly $1 million dollars in its Mayans program to provide forgivable housing loans to three individuals. Given its limited funding, we believe the Housing Authority should consider options to provide opportunities to more people.

60-Day Agency Response

Please refer to the City's audit response letter dated November 8, 2016.

California State Auditor's Assessment of 60-Day Status: Will Not Implement

The Housing Authority forgives generous loans that it has issued to the few participants of its low-income loan programs, and as a result is running out of funds for its future programs. As we state in our report, the city spent nearly $1 million dollars in its Mayans program to provide forgivable housing loans to three individuals. Given its limited funding, we believe the Housing Authority should consider options to provide opportunities to more people.

Recommendation #17 To: Irwindale, City of

To ensure that all residents have an equal chance to participate in the Housing Authority's housing programs, the city should remove the long-term residency priorities from any future housing programs.

Annual Follow-Up Agency Response From December 2021

The Irwindale Housing Authority will implement necessary modifications to our current Housing Program Guidelines, Policies and Procedures to ensure that all residents have equal opportunity to participate in the Housing Program.

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken

Annual Follow-Up Agency Response From October 2020

The Irwindale Housing Authority's status for this recommendation remains the same as last year. The Housing Authority Board anticipates making the necessary modifications to the Guidelines, Policies and Procedures for the next housing project, which is expected to occur within in the next 5 years.

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken

Annual Follow-Up Agency Response From October 2019

The Housing Authority Board anticipates making the necessary modifications to the Guidelines, Policies and Procedures for the next housing project which is anticipated to occur in the next 5 years.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2018

Staff will make the recommendation that the Housing Authority Board approve one category for residency priority when the Housing Authority considers the Guidelines, Policies, and Procedures for the next housing project.

The estimated completion date is unknown at this time, as it is based on when the next housing project will take place, which is unknown.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

1-Year Agency Response

Staff will make the recommendation that the Housing Authority Board approve one category for residency priority when the Housing Authority considers the Guidelines, Policies, and Procedures for the next housing project.

The estimated completion date is unknown at this time, as it is based on when the next housing project will take place.

California State Auditor's Assessment of 1-Year Status: No Action Taken

6-Month Agency Response

Staff will make the recommendation that the Housing Authority Board approve one category for residency priority when the Housing Authority considers the Guidelines, Policies, and Procedures for the next housing project.

The estimated completion date is unknown at this time, as it is based on when the next housing project will take place.

California State Auditor's Assessment of 6-Month Status: No Action Taken

60-Day Agency Response

Please refer to the City's audit response letter dated November 8, 2016.

California State Auditor's Assessment of 60-Day Status: Will Not Implement

Our recommendation that Irwindale remove the long-term residency preferences from any future housing programs is a means for the city to avoid the risk of litigation and help to ensure equal opportunity in its housing programs.

Recommendation #18 To: Irwindale, City of

To help identify and prevent potential fraud, the city should develop and implement a fraud policy, following the guidelines provided by the Association of Certified Fraud Examiners.

1-Year Agency Response

The City of Irwindale adopted a formal Fraud Policy on July 12, 2017. A copy of the Fraud Policy is being submitted with this response.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

We reviewed the city's fraud policy and fraud reporting form and consider this recommendation fully implemented.

6-Month Agency Response

The City agrees to implement a fraud policy, and has prepared a couple of drafts for Council consideration. We have recieved input from the City Council, City Attorney, and employee associations and expect to have a finalized policy soon.

We are happy to submit the finalized policy as soon at it is completed, which we expect will be before the next response due date.

Please advise the best avenue for providing updates before the next online response due date.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

The City agrees to implement a fraud policy, and has been in the process of preparing an appropriate fraud policy document to be adopted by the City.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #19 To: Irwindale, City of

To ensure that it continues to properly manage its debt, the city should prioritize developing and implementing a debt management policy.

Annual Follow-Up Agency Response From October 2018

The City approved Resolution No. 2018-65-3059 on 9/12/2018 adopting a Debt Management Policy. Copy of this resolution to be submitted via email.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

1-Year Agency Response

The City agrees to implement a debt management policy. Staff will work with a consultant during the current fiscal year to develop a formal and effective Debt Policy.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

The City agrees to implement a debt management policy. Staff will soon start work with a consultant to develop a formal and effective Debt Policy.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

The City agrees to implement a debt management policy.

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2016-111

Agency responses received are posted verbatim.