June 26, 2015, 8:00 a.m. to approximately 1:00 p.m.

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1 RGS EXECUTIVE COMMITTEE STUDY SESSION Agenda materials may be viewed on the Agency s web site or by contacting the Executive Director prior to the meeting. June 25, 2015, 11:00 a.m. to approximately 8:00 p.m. June 26, 2015, 8:00 a.m. to approximately 1:00 p.m. Bodega Bay Lodge Drake s Room 103 Coast Highway One Bodega Bay, CA CALL TO ORDER 2. CHANGES TO THE ORDER OF AGENDA 3. PUBLIC COMMENT Each speaker is limited to two minutes. If you are addressing the Executive Committee (EC) on a nonagenda item, the EC may briefly respond to statements made or questions posed as allowed by the Brown Act (Government Code Section ). However, the EC's general policy is to refer items to staff for attention, or have a matter placed on a future EC agenda for a more comprehe0nsive action or report. 4. APPROVAL OF CONSENT AGENDA A. Approval of April 16, 2015 Minutes Action 5. APPROVAL OF MEMBERSHIP CHANGE Action 6. APPROVAL OF AN ADDITIONAL CONTRIBUTION TO MSA FOR INSURANCE RESERVES Action 7. APPROVAL OF SERVICE CONTRACTING AND SUBCONTRACTING GUIDELINES Action 8. APPROVAL OF AGENCY GOALS Action 9. REVIEW NEW WEBSITE Informational 10. NEXT STUDY SESSION MEETING: TBA Americans with Disabilities Act In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact Richard Averett at (650) Notification in advance of the meeting will enable Agency to make reasonable arrangements to ensure accessibility. RGS provides quality, innovative, cost-effective services exclusively to public agencies. Main Fax P.O. Box 1350 Carmel Valley, CA

2 Draft Action Minutes REGIONAL GOVERNMENT SERVICES AUTHORITY EXECUTIVE COMMITTEE MINUTES APRIL 16, 2015 The Regional Government Services Authority held a regular meeting of the Executive Committee on April 16, 2015 at the Larkspur City Council Chambers. The meeting was called to order at 2:01 p.m. 1. CALL TO ORDER Members Present: Ken Nordhoff, Chair Dan Schwarz, Vice-Chair Mike Garvey, Executive Committee Member Steve Rogers, Member Julie Carter, Alternate Member Members Absent: Other Attendees: Herb Pike, Member Richard Averett, Executive Director Jennifer Bower, Director of Human Resources 2. CHANGES TO THE ORDER OF AGENDA None 3. PUBLIC COMMENT None 4. APPROVAL OF CONSENT AGENDA A. Approval of August 21, 2014 Minutes B. Approval of Payments and Deposits made July 2014 through January 2015 C. Approval of Regularly Scheduled Meetings Calendar D. Acceptance of RGS Position Listings E. Approval of Management Services Agreements Action: Moved and seconded (Garvey/Rogers) to approve consent agenda. AYES: Nordhoff, Schwarz, Garvey, Rogers, Carter NOES: None ABSTAIN: None 5. TREASURER S REPORT A. Review of Preliminary Fiscal-Year-To-Date Financial Reports through January 2015 Executive Director Averett reviewed the preliminary year-to-date financial reports, noting that projected year-end results would likely be break even or slightly negative due to investments in the RGS training program, professional development training for our Advisors, website development and continued funding of our claims reserve. This is an information item and no action was taken. 6. OLD BUSINESS None 7. NEW BUSINESS A. Review Client Report and Outreach Discussion of Outreach/Strategic Planning initiative and possible similar financial/erp implementation services. Discussion of JPA training program and how to integrate with Member Agencies training schedules and budgets for the year; possibly discipline-level academies (e.g. planners or for boards/commissions). One or two problems encountered by Commissions, with multiple agencies represented so participants focus on common issues, not specific problems. Sonoma State offers this very little marketing. Sharing experiences; possibly invite attorneys to participate; involve participants in planning training/workshops, like the focus group that helped us with the current training program. This is an information item and no action was taken. 8. EXECUTIVE DIRECTOR, COMMITTEE, MSA AND MEMBER REPORTS

3 A. Executive Director: Study Session topics Non-profit contracting & subcontracting; update (demo) on website development; Board Member succession plan; five-year outlook and goals for interim; core JPA needs and how help agencies with robust RGS services; Southern California Member Agency candidates; starting Study Session a little earlier than 12 noon, in case a Member Agency representative has to leave early Friday. B. MSA: MIC Manager leaving Keenan for employment with another insurance pool. C. Finance Committee: None. D. Members: Member Garvey updated the Committee on the Executive Seminar program; a program like BES is anticipated to be offered, and more details will be forthcoming. Vice Chair Schwarz noted that agencies using significant RGS services need estimated hours/costs for budgeting and project management perhaps a client manager function or letter to client agency. 9. ADJOURNMENT The meeting adjourned at 3:21 p.m. The next regular meeting is scheduled for June 25-26, 2015 at 10:00 a.m. at Bodega Bay Lodge. 2

4 TO: EXECUTIVE COMMITTEE Study Session: FROM: RICHARD AVERETT, Executive Director Item: 5 SUBJECT: MEMBERSHIP CHANGE RECOMMENDATION Approval of the Regional Government Services Authority membership expiration for the Association of Bay Area Governments (ABAG), effective June 30, BACKGROUND The Executive Committee approved the JPA Member in Good Standing Policy at the January 12, 2012 meeting. As stated by the policy, criteria for a member in good standing includes: Regular attendance at meetings, as defined by attendance at three-fourths (75%) of the scheduled meetings during a fiscal year. Actively contributing to the work of the Board and/or Executive Committee and showing concern for the JPA s development. Pertaining to the first criteria, an attendance chart for the past two fiscal years was prepared for member ABAG. ABAG Attendance RGS/LGS/MSA BOD/EC/FC Date Entity(ies) Attendance FY /25/2015 RGS Study Session No 25% 4/16/2015 RGS BOD/EC/FC No 4/3/2015 RGS BOD No 8/21/2014 RGS BOD/EC/FC Yes FY /30/2014 RGS BOD Yes 43% 6/26/2014 RGS Study Session No 5/15/2014 RGS BOD/EC/FC No 2/27/2014 RGS BOD/EC/FC Yes 12/5/2013 RGS BOD/EC/FC No 8/22/2013 RGS BOD/EC/FC & Study Session Yes 8/15/2013 RGS BOD No FISCAL IMPACT There is no fiscal impact of approving this membership status change for one member agency. RGS provides quality, innovative, cost-effective services exclusively to public agencies. Main Fax P.O. Box 1350 Carmel Valley, CA

5 TO: EXECUTIVE COMMITTEE Study Session: FROM: RICHARD AVERETT, Executive Director/CFO Item: 6 SUBJECT: ADDITIONAL CONTRIBUTION TO MSA FOR INSURANCE RESERVES RECOMMENDATION Authorize an additional contribution to MSA of $100,000 for insurance reserves. BACKGROUND The Municipal Services Authority (MSA) is an insurance JPA that Regional Government Services Authority and Local Government Services Authority formed in 2012, to share risks and joint purchasing power. Claims originating while the Agencies were members of the California Joint Powers Insurance Authority (CJPIA) insurance pool are still being resolved, but will be paid by MSA. Therefore, both Agencies contribute toward funding MSA reserves by way of their regular annual membership assessments and additional contributions when funds are available. Expected costs for these older claims is not known at this time, because one claim has not been settled and because the pool sharing calculation is not performed until after all pool member claim costs for each year are determined. CJPIA policy is to recover claim costs over a five-year period. The final CJPIA costs allocated to MSA are expected to be between $1.5 million and $2.0 million. Staff is proposing additional contributions to MSA to better prepare the insurance pool to meet these expenses. With the proposed additional contributions from both MSA member agencies in the current fiscal year, along with budgeted contributions within the Member dues and additional contributions approved in April 2015, the expected MSA fiscal-year-end net equity before audit adjustments for insurance claims would be approximately $1.7 million. MSA has already set aside assets of $803,000 for these older claims. FISCAL IMPACT An additional contribution of $100,000 to MSA is expected to result in JPA net equity at fiscal-year-end of approximately $500,000. RGS provides quality, innovative, cost-effective services exclusively to public agencies. Main Fax P.O. Box 1350 Carmel Valley, CA

6 TO: EXECUTIVE COMMITTEE Study Session: FROM: RICHARD AVERETT, Executive Director Item: 7 SUBJECT: SERVICE CONTRACTING AND SUBCONTRACTING GUIDELINES RECOMMENDATION Approve contracting and subcontracting guidelines for services agreements with public, non-profit and private sector entities. PROPOSED CONTRACTING GUIDELINES 1. Contract with public agencies (i.e. municipally incorporated) for non-safety services; 2. Contract with non-profit agencies when those agencies are serving municipally incorporated governmental entities; 3. Sub-Contract with private firms performing work at the request of public agencies; 4. Avoid contracting with an agency or firm where the Authority s role is subject to heightened risks due to known agency conflicts that cannot be mitigated with terms satisfactory to the Authority and its counsel. BACKGROUND In January 2015, the Executive Director notified the RGS Executive Committee Members of the recent employment of Kendall Flint, owner of the private firm, Flint Strategies. The firm provided communications/outreach and strategic planning services to public agencies, some directly and some as a subcontractor. Most of the firm s business was in response to public agency-issued RFPs, and all business was at the request of public agencies. There being no conflict with the JPA s mission to serve public agencies (and the non-profits dedicated to serving local jurisdictions), RGS proceeded in subcontracting with private firms via Ms. Flint s employment serving at the request of public agencies. In the ensuing months, RGS has worked with Ms. Flint to both establish new as well as convert existing contracts to RGS. At the time this issue was raised in January, the Executive Director noted that the issue of contracting party guidelines would be a topic at the June Study Session. DISCUSSION RGS has contracted exclusively and directly with public agencies since operations began January 1, After several years of operation, the Board indicated that contracting with non-profits who served local governments (for example, a City-formed Economic Development Corporation) was acceptable, because it would further the same aim: to assist public agencies. At the same time, the Board expressed that contracting with private firms could undermine the perception among public sector professionals, that RGS s interests were consistent with those of public agencies. RGS provides quality, innovative, cost-effective services exclusively to public agencies. Main Fax P.O. Box 1350 Carmel Valley, CA

7 On several occasions RGS has discussed working with non-profits fitting this framework, but only limited work has resulted from the discussions. A few private sector firms have inquired about using RGS services, but RGS has declined to advance arrangements that could undermine RGS independence or credibility with our public agency clients. In addition to developing guidelines for the types of corporate entities the Authority should serve, RGS experience is that even standard public agency contractual relationships can expose RGS to unwanted risks. For example, RGS previously provided staffing services to a health services Commission. The newly created agency attempted to bring all interested parties onto its Board, and in the process seated a Commission Member with a conflict of interest that was not managed by Commission Counsel or Chair. RGS became the scapegoat for this Commissioner, who was so disruptive that several employment law claims against RGS were filed. Even while following standard contract protocol and RGS counsel advice, contentious environments can develop. Staff is now more sensitive to the political environment of our potential clients and is quicker to discontinue doing business with agencies where circumstances have become unconducive to the Authority s best interest. FISCAL IMPACT The purpose of these guidelines is to provide flexibility in meeting the Authority s mission, while restricting contracting with parties which add to the normal risks of doing business or impair the reputation of the Authority. It is believed that these guidelines will serve to reduce risks and therefore result in long-term savings. 2

8 TO: EXECUTIVE COMMITTEE ECSS Meeting: FROM: RICHARD H. AVERETT, EXECUTIVE DIRECTOR Item: 8 SUBJECT: 2021 GOALS RECOMMENDATION Development and approval of Authority five-year goals regarding: JPA Membership Lead Advisors Support Services Financial Sustainability BACKGROUND At its April 16, 2015 meeting, the Executive Committee requested a Study Session discussion of the Agency s five-year goals. The purpose of having goals is to help focus the efforts of the governing body and staff to achieve results that would clearly establish RGS as a leader in the development of collaboration, consolidation, and shared services among public entities to make the best use of public resources. The Committee requested that JPA goals address how best to position the JPA to sustain itself through turnover of Member Agency representatives, JPA staff and partner agencies. PROPOSED GOALS By 2021, RGS will: 1. Increase the number and geographic diversity of JPA Member Agencies to six or more agencies, from three or more geographic areas (e.g. San Francisco Bay Area, Southern California, Santa Cruz/Monterey Bay Area, the Inland Empire, Sacramento area, the Redwood Empire, and the Central Valley). Currently four agencies, from four different counties in the San Francisco Bay Area, serve on the RGS Board of Directors. The individual commitment to and active participation of the representatives in the JPA s public service model is vital to the organization s continued success. If a Member Agency representative were to leave their employer, the Member Agency may not continue active participation in JPA governance. This would shift the governance responsibilities to remaining agencies and deny valuable involvement by a larger group of leaders. Additional Member Agencies would provide stability by lessening the impact of normal personnel changes in Member Agencies representatives. Broader geographic representation would help the JPA be in touch with the needs of local agencies throughout the State and be more broadly known as a resource to local governments. There is no upper limit on the number of Member Agencies, with two being the minimum required by State law. RGS provides quality, innovative, cost-effective services exclusively to public agencies. Main Fax P.O. Box 1350 Carmel Valley, CA

9 2. Increase the number and geographic diversity of Lead Advisors. Lead Advisors will represent the Agency at regional forums and on-site meetings with agency partners, and will support major service hubs in all areas where we are or will be developing business. Recruiting Lead Advisors with the commitment to public service and the flexibility to work in a highly changing, mobile environment, is a challenge. Alternatives to traditional employment, compensation, experience, and development will have to be considered. For example, HR professionals with private sector experience could be paired with Senior Advisors with significant public sector experience. Or solo or small business operators serving the public sector could be brought into RGS as client service departments. 3. Develop the administrative and technical services necessary to support four geographic services hubs, 100 active agency partners and 200 employees. Currently RGS serves about 65 agencies with 100 employees, approximately ten of whom are administrative. The administrative staff operate in a virtual environment, using an online payroll and HRIS service, a basic, off-the-shelf financial software product, cloud file storage, and contract IT support and payroll processing. Recognizing that the demand for partner agency services may change both in volume and types of services, the capacity (of staff; communications systems; payroll and financial software) to serve the needs of our clients must be built incrementally, incorporating a high degree of adaptability, modularity, and expandability. 4. Continue to strive for long-term financial sustainability by exercising sound risk management practices; recovering the full cost of services; growing partner agency services; and exercising prudent financial management. a. Continually improve our risk profile. When providing services that could entail higher risks for RGS, perform up-front assessments of partner agency conditions. Exercise diligent contract management. b. Continually review cost model and financial performance, and make adjustments to fees charged for services. RGS should always prepare for modest net asset growth in order to have sufficient funds for inevitable business downturns, significant one-time expenses and investments in organizational capacity. c. Continually replace expiring service contracts and build our portfolio of mid-size, ongoing partner agency services. RGS Project Management and Interim Staffing services are often of short duration and are relatively expensive to support. But they are effective in communicating to other public agencies about RGS. Extremely large contracts can expose the Agency to risk concentration. Building more mid-sized, on-going partner agency relationships provides a more sustainable revenue base from which the Agency can plan and extend its service offerings. d. Set aside reserves equal to a minimum of $750,000 up to a maximum of 25 percent of the annual budget, after contributing sufficient funds for MSA insurance reserves. Adequate reserves help achieve operational sustainability, enable development of new or improved services, and contribute to cost-of-services rate stability. Currently RGS has $500,000 in net equity, and contributes annually to MSA equity. The five-year goal would be to continue annual contributions to MSA and add an average of $50,000 to RGS reserves per year.

10 INTERIM STEPS The Executive Committee also requested interim goals by which to assess the level of longer-term goals attainment. Interim progress toward achieving five-year goals should demonstrate that actions by the governing body and staff are contributing to reasonable expectations of success in achieving five-year goals. By the end of fiscal year 2018, RGS will: 1. Increase the number of Member Agencies to five and broaden the geographic diversity of JPA Member Agencies to include agencies from the Bay Area and one other area. 2. Increase the number and geographic diversity of Lead Advisors, who can represent the Agency at regional forums and on-site meetings with agency partners, to support major service hubs in three geographic areas. 3. Develop the administrative and technical services necessary to support three geographic services hubs, 80 active agency partners and 150 employees. 4. Increase Net Equity of RGS to a minimum of $650,000 after contributing sufficient funds for MSA insurance reserves.