Modesto getting update on risk assessment

The Modesto City Council on Tuesday is expected to hear from its auditor regarding a risk assessment of the city’s operations and to hold a workshop after the meeting to discuss, among other topics, its initiative to strengthen neighborhoods.

Moss-Adams LLP – the certified public accounting and business consulting firm retained as its auditor – spent October through February assessing risk throughout the city. Modesto is paying the firm $200,000 this budget year for its services, including $40,000 for the study.

The study looked at the likelihood of negative events happening and the impact those events would have on the city. For instance, the city faces higher costs to replace or fix aging infrastructure because it put off less-expensive maintenance because of budget cuts.

The study concludes that Modesto’s overall risk is moderate to high and the trend line for that to change is flat. It includes strategies to address the city’s risks. The assessment does not always portray Modesto positively. Three examples:

▪  Because the city has not not been able to invest in technology, work orders are issued on paper to the Public Works and Utilities departments’ workers, rather than electronically. That results in significant drive time for workers as they drive to dispatch to pick up their orders.

▪  Two captains and a battalion chief spend at least 30 minutes each daily on scheduling because the Fire Department uses a manual, paper-based system. This raises the likelihood for human error and the potential for paying extra overtime.

▪  The irrigation system at many parks is outdated and wastes significant water, though Public Works Director Bill Sandhu questioned that conclusion. He said the underground water lines at the city’s older parks can develop minor leaks. He said a major leak would result in water bubbling to the surface or patches of lawn turning deep green. “I don’t believe we waste significant water, but there may be minor leaks,” he said.

A Moss-Adams official declined to comment, citing his firm’s policy not to speak with the media.

City Manager Jim Holgersson said in an email that the study is part of Modesto’s effort to become better.

“Most cities do not ask a third party to come in and do as in-depth and as candid an assessment of risk as what Modesto has done and turn around and make it transparent,” he wrote. “We are committed to continually improve our service delivery to our community and welcome the participation and support from the community in achieving that goal. Significant progress has been made, but as the report communicates, and it probably comes as no surprise, we have a lot more work to do.”

The study reiterates many of the concerns raised by city officials over the past year or so: Modesto does not have adequate funding for public safety; it faces challenges with its streets, parks, fire stations and other infrastructure after years of budget cuts and deferred maintenance; and its pay and benefits are not competitive, leading to high turnover and difficulty hiring. The study says 28 percent of Modesto’s 1,035 employees have been with the city for five years or less, and 53 percent have been with the city 10 years or less.

The study says the city is still recovering from reduced revenue during the recession and that income is not keeping pace with expenses.

“Funding and economics is the root cause of many other risk factors the city faces,” the study concludes. “Workforce reductions, a decline in public safety spending, erosion in services, and an inability to invest in technology or training have all increased the city’s overall risk levels. Strengthening the city’s financial health is on the critical path to being able to address other risk factors.”

Mayor Garrad Marsh is considering asking the council to put a half-percent sales tax on the November ballot, primarily for public safety. This comes after voters rejected Measure X, the 1 percent sales tax increase the city put on the November 2013 ballot.

The council will meet at 5:30 p.m. in the basement chamber of Tenth Street Place, 1010 10th St. After the meeting, the council will hold a workshop in room B300 to discuss three aspects of the city’s strategic plan, including neighborhoods.

This story was originally published May 4, 2015 at 8:08 PM with the headline "Modesto getting update on risk assessment."