City Council
Regular MeetingLodi, NJ · February 11, 2025
Agenda
LODI CITY COUNCIL - AGENDA - Special Meeting
Date: February 11, 2025
SPECIAL Time: 4:00 p.m.
Carnegie Forum
305 W. Pine Street
Mayor Cameron Bregman
Mayor Pro Tempore Ramon Yepez
Councilmember Lisa Craig-Hensley
Councilmember Mikey Hothi
Councilmember Alan Nakanishi
Notice Regarding Public Comments
Public Comment may be submitted in the following ways:
• In-person
• Email – councilcomments@lodi.gov
> Received no later than two hours prior to the meeting
• Mail – City Clerk’s Office, P.O. Box 3006, Lodi, CA 95241
• Hand delivered to: City Clerk’s Office, 221 W. Pine Street, Lodi, CA 95240
> Received no later than two hours prior to the meeting
Public comment received via email, mail, or hand delivery will be provided to the City Council and
included in the official minutes record of the meeting, but will not be read aloud at the meeting.
A. Call to Order / Roll Call
B. Regular Calendar
B.1 Appoint Michael Carouba to the Economic Development Ad Hoc Committee and Toni
Lish to the Measure L Citizens’ Oversight Committee (CLK)
B.2 Receive the Human Resources Assessment Report (CM)
Attachments: Attachment 1 - Lodi HR Assessment Report
B.3 Receive and File a Verbal Report on the Finance Divisions Observations (CM)
Attachments: Attachment 1 - Mid-Year Finance Report
B.4 Adopt a Resolution Ratifying Amendment No. 2 to the Professional Services Agreement
with Baker Tilly Advisory Group, LP of Mountain View in the amount of $55,000, which
was executed as a Change Order by the City Manager and adding $150,000 for
additional Professional Financial Services for a Total Contract Not to Exceed $308,900
($103,900 Approved + $55,000 ratification + 150,000 for additional support) (CM)
Attachments: Attachment 1 - Baker Tilly Amendment No. 3
Attachment 2 - Resolution
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City Council - Special AGENDA February 11, 2025
C. Adjournment
Pursuant to Section 54954.2(a) of the Government Code of the State of California, this agenda was
posted at least 24 hours in advance of the scheduled meeting at a public place freely accessible to the
public 24 hours a day.
______________________________
Olivia Nashed
City Clerk
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All staff reports or other written documentation relating to each item of business referred to on the agenda are on
file in the Office of the City Clerk, located at 221 W. Pine Street, Lodi, and are available for public inspection.
Agendas and staff reports are also posted on the City’s website at www.lodi.gov. If requested, the agenda shall be
made available in appropriate alternative formats to persons with a disability, as required by Section 202 of the
Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12132), and the federal rules and regulations adopted in
implementation thereof. To make a request for disability-related modification or accommodation contact the City
Clerk’s Office as soon as possible and at least 24 hours prior to the meeting date. Language interpreter requests
must be received at least 24 hours in advance of the meeting to help ensure availability. Contact Olivia Nashed at
(209) 333-6702. Solicitudes de interpretación de idiomas deben ser recibidas por lo menos con 72 horas de
anticipación a la reunión para ayudar a asegurar la disponibilidad. Llame a Olivia Nashed (209) 333-6702.
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Meetings of the Lodi City Council are telecast on SJTV, Channel 26. The City of Lodi provides live and archived
webcasts of regular City Council meetings. The webcasts can be found on the City's website at www.lodi.gov by
clicking the meeting webcasts link. Members of the public may view and listen to the open session of this meeting
at www.facebook.com/CityofLodi/.
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AGENDA ITEM B.1
COUNCIL COMMUNICATION
AGENDA TITLE:
Appoint Michael Carouba to the Economic Development Ad Hoc Committee and Toni Lish to the Measure L
Citizens’ Oversight Committee (CLK)
MEETING DATE:
February 11, 2025
PREPARED BY:
Maria Ditmore, Deputy City Clerk
RECOMMENDED ACTION:
Appoint Michael Carouba to the Economic Development Ad Hoc Committee and Toni Lish to the Measure L
Citizens’ Oversight Committee
BACKGROUND INFORMATION:
The City Council directed the City Clerk to post for vacancies on the Economic Development Ad Hoc
Committee on February 7, 2024 and vacancies on the Measure L Citizens’ Oversight Committee on May 15,
2024.
The Mayor reviewed the applications, conducted interviews, and recommends the City Council concur with the
appointments as detailed below.
APPOINTMENTS:
Economic Development Ad Hoc Committee
Michael Carouba Term to expire May 1, 2026
Measure L Citizens’ Oversight Committee
Toni Lish Term to expire July 1, 2027
STRATEGIC VISION:
Not applicable.
FISCAL IMPACT:
Not applicable.
FUNDING AVAILABLE:
Not applicable.
_______________________________________
Olivia Nashed
City Clerk
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COUNCIL COMMUNICATION
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AGENDA ITEM B.2
COUNCIL COMMUNICATION
AGENDA TITLE:
Receive the Human Resources Assessment Report (CM)
MEETING DATE:
February 11, 2025
PREPARED BY:
Laurie Montes, Assistant City Manager-Part-Time
RECOMMENDED ACTION:
Receive the Human Resources Assessment Report.
BACKGROUND INFORMATION:
On September 3, 2024, the City Manager entered into a professional services agreement with Municipal
Resource Group, LLC (MRG) for Human Resources (HR) On Demand Consulting Services. Since then,
Council and City employees worked with Teri Silva, MRG Affiliated Consultant on numerous issues. MRG was
tasked with preparing an assessment of the HR Division’s organizational structure and capacity, analyzing
work functions to include best practices and workload. To accomplish this review, MRG conducted interviews
with staff, Department Directors and the Human Resources Manager before retirement. MRG compared the
HR Division configuration and staffing to comparable cities and national standards. In addition, MRG reviewed
department administrative policies, the protocol manual and personnel rules, the Executive Management
Statement of Benefits and many other HR documents.
MRG found that the City has outdated policies and procedures that have not been updated in years or
decades. Additionally, there is a lack of training and staff often rely on past practice which may be inconsistent
with current law or best practice. Staffing levels are inadequate to maintain daily transactions and to develop
policies and procedures to establish a high functioning department that implements best practices in human
resource administration.
The City of Lodi currently has 461 authorized full-time-equivalent (FTE) positions and 5 are allocated to HR.
Lodi has one of the lowest ratios of human resources staff per 100 employees among the comparable
agencies used in the recent market survey for salary adjustments. The only cities that have a lower ratio are
those that have less than 400 FTEs. All comparable cities dedicate Human Resources as a Department with
the exception of the cities below 400 FTE and the City of West Sacramento. The report provides detail on this
information as well as additional detail including where the various cities risk functions are managed and the
number of Memoranda of Understanding that are managed by their HR staff.
Based on this analysis, MRG prepared a series of recommendations to improve HR operations and reduce
liability. The report recommends that the HR Division transition to a department that includes the Risk
Division. MRG finds that there is overlap of duties and coordination required between these divisions. With
additional staffing, employees could develop their skills in both the HR and Risk disciplines providing
opportunities for succession planning and there is potential to streamline operations. Other organizational
structures are discussed, but elevating HR to a department will create a strategic partner in the organization
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COUNCIL COMMUNICATION
structures are discussed, but elevating HR to a department will create a strategic partner in the organization
with the ability to focus on the complex and critical functions that better meets the needs of operating
departments.
STRATEGIC VISION:
3A. Fiscal Health: Promote City's transparency & fiscal fluency.
FISCAL IMPACT:
At this time, the Council is being asked to consider the assessment and provide direction to staff. Any
direction about adding or changing allocated positions will be recommended to Council for approval at a later
date. Any recommendations will come with a look at the long-range fiscal impacts of such a decision.
FUNDING AVAILABLE:
Not applicable.
_______________________________________
Scott R. Carney
City Manager
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CITY OF LODI
Human Resources Division
Review of Organizational Structure
And Recommendations
Prepared by:
Teri Silva, Consultant
Municipal Resource Group, LLC
November 2024
Elk Grove, California 95624 866-774-3222 www.Solutions-MRG.com
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TABLE OF CONTENTS
Page
EXECUTIVE SUMMARY ....................................................................................................................1
BACKGROUND AND METHODOLOGY .................................................................................5
DEPARTMENT ORGANIZATION ...........................................................................................6
STAFFING RATIOS ...............................................................................................................7
RECOMMENDATION ...........................................................................................................9
CONCLUSION ....................................................................................................................16
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EXECUTIVE SUMMARY
The City of Lodi (City) has approximately 461 full-time equivalent positions providing a full range
of municipal services. The human resources function is a Division within the Office of the City
Manager. The Assistant City Manager position, serves as the Department Director over the
Division. In addition, the Assistant City Manager is also responsible for the Finance and
Information Technology Divisions as well as his duties in the City Manager’s Office. The Citywide
Budget as well as some key finance responsibilities, such as investing for the City, fall within the
scope of work for the Assistant City Manager. Based on my review of the budget document and
responsibilities, it appears that the Assistant City Manager has a significant focus on Finance and
would require Finance experience to serve in the role of Assistant City Manager in the City. The
Human Resources Manager retired in September and the City Manager identified this time to be
appropriate for an analysis of the Division and determine opportunities to improve service
delivery for the City.
The City asked Municipal Resource Group, LLC (MRG) to provide an assessment of the Division’s
organizational structure and capacity, analyzing work functions to include best practices and
workload. To accomplish this review, MRG completed the project in several ways: interviews with
staff to explore roles in more depth; interviews with Department Directors as well as the Human
Resources Manager before retirement, and a comparison of Division configuration and staffing
to comparable cities. In addition, MRG reviewed department administrative policies, personnel
manual, and the Executive Management Summary of Benefits. In my initial review, I have
identified that these documents are outdated and do not consistently reflect current practice,
the latest trends. In addition, there are a number of key policies that have not been implemented.
Staff is aware that these updates are necessary, but due to staffing levels and competing
priorities, these key documents have not been completed.
Staff shared that a significant focus is on recruitment for the City. The input from Department
Directors was positive regarding the work that the Division employees perform, but they also
acknowledged that they are limited in providing more detailed support to the departments based
on their capacity. I find that many of the functions, such as managing performance evaluations
and staff training, fall to the departments. Overall, the lack of policies, outlined procedures for
issues such as leave administration, structured recruitment procedures, outdated polices on
benefit plans, create a liability for the City and exposure to potential litigation which would be
difficult to defend without the necessary tools that provide guidance and references to the legal
requirements that demonstrate the background on why decisions are made and supported by
the City. A large reason for the risk to the organization is based on the level of staffing in the
Division. Staffing levels specifically contribute to the inability of staff to develop policies and
procedures that would protect the City from legal exposure and establish a high functioning
department that implements best practices in human resource administration. Overall, I believe
the organization is vulnerable to receive a claim against them in multiple areas that would be
difficult to defend based on the lack of policy and documented past practice.
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The Division’s five budgeted positions include the Human Resources Manager, two Management
Analyst (Human Resource Analyst is working title), and two Human Resource Technicians. MRG
compared the Division’s structure to comparable cities identified in a recent Compensation
Study completed by Gallagher. Manteca, West Sacramento, Turlock, Woodland, Davis, Folsom,
Merced, Tracy, Clovis, Ukiah, Chico, and Redding are the cities identified as comparable for
purposes of compensation. Therefore, these are the agencies that I reviewed for this analysis.
The most significant observation is that most of the comparable cities have Human Resource
Departments rather than Human Resource Divisions under the leadership of another
Department. In addition, in my interviews with key staff and Department Directors, it was
repeatedly stated that the Human Resources Division is mostly transactional and that policy
updates and other key documents are not kept current. The Human Resources Manager is not
an Executive-level classification and, therefore, does not participate in weekly executive
management meetings. This limits the ability to emphasize the importance of human resources
in the organization and allow them to participate as a strategic partner within the City. I believe
the Assistant City Manager is highly engaged with Human Resources, but with many
responsibilities, there are competing priorities.
The City of Lodi has one of the lowest ratios of human resources staff per 100 employees when
compared to the comparable agencies. The only Cities that have a lower ratio are those that have
less than 400 FTE. All comparable cities dedicate Human Resources as a Department with the
exception of the cities below 400 FTE and the City of West Sacramento.
Similarly, the Bloomberg/BNA 2018 Human Resources Benchmark survey indicates a typical
staffing ratio of 1.5 staff members per 100 employees in the workforce. Even with risk
management functions not located in Human Resources, the staffing ratio is extremely low taking
into consideration all of the mandates that fall within public sector human resource functions.
Overall, the staffing level in the Division is less than the average, indicating that an additional
position or positions is warranted. However, there are additional factors to consider. If the
Division had more policies in procedures, it would benefit the organization overall. Having
procedures in place and made available to all employees provides them the opportunity to locate
information rather than having to contact staff in Human Resources. As an example, the City has
employees who participate in a telework assignment, but the policy has only been established
for emergency situations.
Another consideration is the expansion of technology (such as additional use of NeoGov and/or
employee self-service functions). Tyler is the ERP/HRIS system used by the City, but not all of the
modules have been implemented, therefore staff is required to manually track information.
There is an opportunity to use technology either through NeoGov or Tyler to improve
functionality within the Division.
The Human Resources Division does not handle the duties of Risk Management. These duties are
performed by staff located in the City Attorney’s Office. However, it should be noted that Risk
Management was located in Human Resources when it was a Department in the 2000’s.
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Keys areas in the Human Resources Division include the following:
• Recruitment and Selection
• Compensation and Classification
• Benefits and Leave Administration
• Other Workplace Policies
• Performance Management
• Employee Development and Training
• Human Resource Information Systems Management
In each of these areas, the Assessment provides recommendations for bolstering Division
effectiveness.
• In the area of Recruitment and Selection, the Division has been effective in managing the
recruitment and selection process. The Assessment provides suggestions for
improvements in several areas, including process consistency which will reduce exposure
to legal challenges, modernizing the Division’s recruitment strategy by updating policies
and procedures, and being more transparent to both hiring departments and potential
applicants in the recruitment and selection process.
• In the area of Compensation and Classification, the Division recently managed the
compensation study that was completed by Gallagher, an outsourced vendor. In
reviewing the policies and procedures, the City would benefit from having more
parameters in place when it comes to classification requests. In addition, there could also
be opportunities for more flexibility with City Manager authority. All of these options
need to be documented in policy so that it would be consistently applied, as well as be
transparent to both management and employees.
• In the area of Benefits and Leaves, Division staff do a sufficient job in processing the
benefits for employees. However, policies around this area are dated and are not all
located on the City’s website for transparency. The more information that is readily
available to employees and applicants will reduce the need for constant contact with
Human Resources staff for information and would allow for staff to focus on other areas
of work. This improvement would provide overall benefits in service delivery and
operational efficiency within the Division.
• Other Workplace Policies, include the Executive Management Summary of Benefits and
Personnel Manual, as well as multiple personnel policies. These documents are outdated
and do not accurately reflect all of the benefits currently provided to employees (e.g.,
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Executive Management Statement of Benefits). In addition, in some cases it has been
identified that the procedures in these documents are not current practice. This is a risk
for the organization both from a legal and employee morale perspective.
• In the area of Performance Management, the City would benefit from a citywide
management system facilitated by Human Resources. Monitoring the performance
evaluation due dates, reviewing the performance evaluation documents, training of
supervisors who write and deliver evaluations, ensuring consistency throughout the City
and validating compliance by departments would significantly improve the evaluation
process for the City. At this point, it is left to the departments to manage, and this leads
to inconsistency throughout the City.
• Employee Development and Training is limited to the Consortium training provided by
Liebert, Cassidy, and Whitmore and other online training to meet mandated
requirements, such as harassment training. Other employee training is authorized and
tracked by individual departments. A best practice would be a citywide training program
that allows opportunities for employees to regularly have supervisory training, training
that provides information on promotional opportunities, the city performance
evaluations process, areas that support succession planning for the City, just to name a
few. Human Resources should be managing the facilitation of the training, notices to
employees, tracking the training evaluations for effectiveness, as well as ensuring course
completion documentation is placed in the employee's official personnel file. As a best
practice, to have a citywide career development plan would greatly enhance the
succession planning efforts and be an overall benefit for the City.
• In the area of Human Resource Information Systems Management, the City has
implemented the Tyler HRIS system. Due to constraints with time and requirements with
completing regular work duties, staff hasn’t had the capacity to focus on system
improvements. As an example, the system can be set up to track performance evaluation
due dates. Currently, the system only tracks when an employee is eligible for a salary step
advancement which requires a satisfactory performance evaluation. Unfortunately, it has
become the practice to provide a merit increase even without a current performance
evaluation.
Human Resources, as a strategic partner in the organization, should know what is happening
before a department implements systems or processes that may violate a city policy, have a legal
obligation to meet and confer or simply not be recommended as a best practice. For example,
video cameras were installed by one department without Human Resources knowledge in
advance. Due to the lack of communication, or possibly the knowledge of the meet and confer
obligation, the video cameras had to be removed so that the City could go through the proper
steps before determining if the installation was the correct action.
Other areas to note that impact the effectiveness of the division include the following:
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• Staff consistently reshuffle priorities because there are not enough resources to get
assignments completed in a proactive basis. This causes a lot of assignments and projects
that get started, but don’t make it to completion due to reprioritization.
• A best practice is to coordinate and partner more closely with the City Attorney’s office
in areas that overlap, in particular investigations and disciplinary matters.
• MOU’s posted on the website should include side letters that have been negotiated with
labor groups for more transparency and to accurately reflect the current document that
is posted.
• There is no documentation to support past practice. I recommend that documented
policies and procedures be put in place so that the City becomes well versed in policy and
provide consistent practices moving forward.
BACKGROUND AND METHODOLOGY
The City has an approved budget with 461 full-time equivalent positions providing a full range of
municipal services, including law enforcement, fire prevention and suppression, community
development, library, parks and recreation, public works, electric utilities, transit, and internal
services including finance, information technology, and human resources. The human resources
function is performed by the Division, with five assigned employees. Human Resources is one of
three divisions located in Internal Services.
The Human Resources Manager retired in September after serving for 10 years in the position.
While the Division provided its core services well during this period, the lack of current policies
and procedures allowed a lot of flexibility in the administration of services. While the flexibility
can be positive for the Departments, it can cause some inconsistency in practices and become a
risk for the organization. In a review of the Division, it has not been without the desire to have
the policies and procedures in place; it was due to the inability of current staffing resources to
manage all of the day-to-day operations or transactional duties to provide the capacity to
complete the multiple projects required.
The City requested MRG to provide an analysis of the Division’s effectiveness and established
practices to identify recommendations for developing a Division that implements best practices
ensuring the most effective, efficient, any areas of legal risk, and consistent level of service
delivery for the City. To complete the analysis, MRG completed the following steps:
Staff Interviews
Interviews were held with all members of the Human Resources Division, including the Human
Resources Manager who retired in September. Meetings were held with all Department
Directors, with the exception of the Community Development Director. In addition, meetings
were held with the City Manager, Assistant City Manager, City Attorney, Deputy City Attorney,
and the part-time Assistant City Manager. These interviews were helpful in identifying the culture
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of the City, as well as the culture of the Human Resources Division. Additionally, it provided an
insight into the organization’s perception of Human Resources.
Review of Documents
MRG reviewed key documents (such as the Personnel Manual, Administrative Policy Manual, and
the Executive Management Statement of Benefits) to determine the effectiveness of the Division.
It was quickly identified that these key documents are outdated, and in some cases non-existent.
Staff reported that drafts in some areas have been prepared but not finalized. This is the case
with the Personnel Manual, the Executive Management Statement of Benefits, as well as several
key policies.
Comparative Analysis
This component of the assessment looked at the organizational structure of comparable cities to
include the employee population, the size of the human resources staff and major functions
within human resources. In addition, the national average with regards to human resources ratio
to City staffing was reviewed.
DIVISION ORGANIZATION
Division staffing members, along with general roles and responsibilities, are shown in the chart
below.
Current Organizational Structure
Human
Resources
Manager
Human
Resources
Analyst (2)
Human
Resources
Technician (2)
The Human Resources Manager – Classification and compensation analysis; labor relations;
employee discipline and performance; employee relations and investigations; policy
development and interpretation.
The Human Resources Analyst (working title) – Recruitment and selection; generalist duties;
division budget; special projects.
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Human Resources Technician – employee orientation; HRIS management; benefits program
coordination; verification of personnel actions.
The Division provides support to 461 full-time equivalent positions in eight labor bargaining
groups.
In fiscal year 23/24 staff conducted 81 recruitments and received 2,961 applications for
employment. This division also handles classification reviews, but this is not currently tracked as
a workload indicator, so I was unable to obtain this information.
Comparative Cities
A key aspect of this analysis involves comparing the City’s Division to other agencies and national
benchmarks to assess the effectiveness of the Division’s structure and staffing. The agencies used
for comparisons were agencies that were recently identified and used for the compensation
study completed by Gallagher. Gallagher’s criteria for comparative agencies included the
following:
• Organization type and structure
• Similarity of population, staff, and operational budget
• Scope of services provided
• Labor market and geographic location
There is not a “one size fits all” organizational structure for Human Resources, as city managers
organize functions differently for philosophical, budgetary, and individual competency reasons.
Department structures also evolve over time as different leaders exert their preferences. The
comparison agencies are reasonably alike based on the criteria above and utilized for the
compensation study by Gallagher.
MRG compared the position classifications and organizational structure for the agencies
identified as comparable. In addition, MRG looked at whether risk management was inclusive in
human resources or separate as well as the identification of payroll functions located in some
human resource departments, which were noted in the chart. MRG did not perform a complete
classification and compensation analysis as part of this project, but rather performed a broad
review of the various job functions to determine the work performance and capacity of existing
staff.
STAFFING RATIOS
A common way to measure staffing resources is to evaluate the human resources staff-to-
employee ratio, comparing the number of employees providing human resources services to the
number of employees in the organization. Comparing staffing levels to other similar agencies can
be helpful to identify trends and place the Division’s staffing analysis in a broader context.
However, direct comparisons are sometimes imprecise, as each agency’s human resources
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provides a unique mix of services. The table below identifies staffing for the human resources
functions in the twelve comparative cities as well as the City of Lodi.
Number Ratio of
of Full- Human HR Staff Human # of
Includes Risk
Agency Time Resources per 100 Resources Negotiated
Management?
Equivalent Staffing Permanent Department MOUs
Positions Employees
City of Woodland 323 3 0.9 Yes No 7
City of Ukiah 323.31 3 0.9 Yes No 6
City of Merced 351.5 6 1.7 Yes No 5
City of Davis 378.5 5 1.3 No No 8
City of West
424.5 5 1.1 No No 5
Sacramento
City of Turlock* 436 8.5 1.9 No Yes 4
City of Manteca 474 10 2.1 Yes Yes 7
City of Chico 478.18 7 1.4 Yes Yes 9
City of Folsom 503.5 6 1.1 Yes Yes 6
City of Tracy 516 11 2.1 Yes Yes 5
City of Clovis 653 8.375 1.2 Yes Yes 8
City of Redding* 948 15 1.5 Yes Yes 10
City of Lodi 461 5 1 No No 8
Data Sources. For all cities, data was gathered from city websites and budget reports.
*Includes Payroll (Cities of Turlock and Redding).
All agencies, with the exception of West Sacramento, Woodland, Merced, and Clovis, are Human
Resource Departments led by a Human Resource Director. Of these cities, all are below 400 FTE
with the exception of West Sacramento.
It is a difficult comparison with agencies having their human resource services configured slightly
different based on their organizational needs or historical practices. In looking at the data with
the information provided the average staff and median staffing levels can be identified.
Calculation is done using all agencies (except Lodi) that include the below 400 FTEs and then all
agencies that are more than 400 FTE to determine if there was a significant difference.
Agency Inclusion No. of Agencies Average Median
All 12 1.43 1.35
Above 400 FTE 8 1.55 1.45
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Compared to both the average and median staffing ratio for Human Resources, the City of Lodi
is well below at 1.0. Several options are provided for the future staffing models, which will include
how this will adjust the Human Resources staffing ratio to employees.
According to SHRM’s 2022 Human Capital Benchmark Report, the average HR staff to employee
ratio is 1.7 per 100. Comparing Lodi’s staff to employee ratio to this data, Lodi is well below the
average. However, it should be noted that it is common for public sector organizations to operate
with lean staffing numbers.
Another helpful perspective is to compare Lodi’s staffing ratio to national benchmark data,
typically the Bloomberg/BNA 2018 Human Resources Benchmark survey. The Bloomberg/BNA
survey has been performed since 1978 and is regarded as a reliable resource. The 2018 survey
indicates that Human Resources departments across all industries and organization sizes average
1.5 staff members per 100 employees in the workforce. Over the last four decades the Human
Resources staff ratio has risen gradually from the once-standard ratio of 1.0 HR staff member per
100 employees in the workforce. This increase is a result of growing legislated compliance
activities (discrimination and harassment protections and myriad leaves laws), an increase in the
complexities of benefits administration and risk management, and more focus on employee
training and engagement, including wellness programs. In California, the legislation is very active
with about 20 bills that have been approved in the last five years that impact human resources
through review, coordination, potential implementation and administration of these changes.
RECOMMENDATION
Transition Human Resources from a Division to a Department and move Risk Management to
Human Resources to create a cohesive and collaborative Department. Risk Management duties
such as interactive process, reasonable accommodations, Americans with Disabilities Act, job
description incorporation of physical requirements, along with duties such as DOT commercial
drivers’ program and pre-employment medical review, makes this a premier department
structure and consistent with Human Resources in cities that are similar in size.
A major component of Risk Management is managing the Workers’ Compensation
program. Having Risk Management based in Human Resources streamlines this process. Human
Resources needs to know employee status. Leave laws require management even in the workers’
compensation arena. Human Resources is generally tasked with employee training to include
safety training. Combining employee safety training with risk awareness is crucial to an effective
risk management program. For example, when performing safety training, you can weave in
information about safety awareness for the public – teaching employees how to be risk aware is
crucial in mitigating risk for the agency.
Having Risk Management in Human Resources also helps with trend analysis – being aware of
General Liability or property claims and any crossover to employee responsibility helps to identify
areas needing additional training – defensive driving and perishable skills training for
example. This knowledge can help in reducing claims exposure. I found having Risk Management
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in Human Resources facilitated better use of City resources. It streamlined claims handling
regarding workplace injuries, benefits and leave management. It removed duplicating efforts
between risk management and Human Resources. Human Resources staff became more aware
of the importance of training and safety awareness. General liability claims management was
better as well as the same skill set is utilized. Staff had a better understanding of contractual risk
transfer and why it is important. Human Resources staff deals with a lot of regulations and the
need to know the fine print. It is easy to broaden this requirement for contract review.
The City Attorney’s Office would still be involved in litigation matters but would not be tasked
with the day-to-day activities. Human Resources staff is already accustomed to data
management, legal compliance, privacy and confidentiality and employee dynamics which can
lead to quicker response to employee issues or workplace accidents.
The current staffing structure does not provide enough resources to complete projects and
assignments of a complex level. For example, the Personnel Manual, multiple policies and
procedures, and a structured training program for employees are not up to date or developed.
Human Resources staff have drafted multiple policy documents but have been unable to get
them implemented. They are aware that they have become a transactional division within the
City but are unable to move into a more proactive environment and become a strategic partner
with the departments they serve. Organizational options might include:
• Increase FTEs, Create a Department: Create a Human Resources Director classification,
retain the current Human Resources Manager classification. It is recommended to move
Risk Management functions into Human Resources which would further justify the need
for a Department structure and create synergy among the services of human resources
and risk management. Job functions among these two divisions can work collaboratively
in areas such as leave administration, interactive process and reasonable
accommodation, job description development with Americans with Disabilities
requirements, Department of Transportation requirements and reasonable suspension
testing for commercial drivers are just a few examples. It should be noted that several
years ago Human Resources was a Department and Risk Management was a function
within the Human Resources Department.
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Human
Resources
Director
Office Specialist
Human
Resources Risk Manager
Manager
Human
Management
Resources
Analyst
Analyst
Human
Health and
Resources
Safety Specialist
Technician (2)
This option, with nine employees in the Human Resources Department would increase
the ratio to 1.9. In addition, this structure provides for two managers in the Department
that can develop their skills in both disciplines, creating opportunities for acting
assignments in the absence of the Director and career development and succession
planning for the Department. It should be noted that this model is a net two positions.
Risk management staff would move from the City Attorney’s Office to Human Resources
and the new position would be a Human Resources Director and Office Specialist. There
may be a way to take partial hours that have supported Human Resources that is currently
split with the City Manager’s Office and that would decrease the fiscal impact on the
overall budget.
• Increase FTEs, Remain Division: Retain the existing classifications, but with the title
change from Human Resources Manager to Deputy Director of Human Resources and add
one FTE of Senior Human Resources Analyst. The new position could focus on policy
development, conduct classification and compensation reviews, citywide training
program development and management, conduct research and analysis in support of
labor negotiations, and complete highly complex special projects and assignments.
Deputy Director
Human Resources
Sr. Human
Resources Analyst
Human Resources
Analyst (2)
Human Resources
Technician (2)
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This option, with six employees in the Human Resources Division would increase the
staffing ratio to 1.3. The one additional position will be an improvement from the current
structure however, the resources are still below the average and will not provide the
Division the resources necessary to achieve the legal compliance necessary to avoid
potential liability or become a highly effective division. With this model you will continue
to have some duplicative efforts when risk management remains in another department.
A recent example was when risk management was coordinating training services for
another City department without coordination with Human Resources. With this model,
I recommend that consultant services be retained to assist with policy development and
management.
• Increase FTEs to Reflect Comparative Data: Retitle the Human Resources Manager to
Deputy Director of Human Resources, add a new Senior Human Resources Analyst, with
duties outlined above, and add one additional clerical support for the Division to assist
with recruitment, examination, scheduling applicants, assisting departments with hiring
and selection procedures, cover the front desk, and assist with filing and management of
documents within the Division.
Deputy Director
Human Resources
Sr. Human
Administrative
Resources
Clerk
Analyst
Human
Resources
Analyst (2)
Human
Resources
Technician (2)
This option, with seven staff members in the Human Resources Division would increase
the staffing ratio to 1.5. While the staffing ratio is at the average for comparable agencies
it does not include risk management and you will continue with the identified issues of
coordination as stated previously.
The eployees working in the Human Resources Division are dedicated to providing good service
to the City. Because the workload requires that staff constantly respond to personnel issues as
they arise, there is no opportunity to be proactive and strategic. This is a direct reflection of
outdated policies, lack of policies and procedures that would provide more transparency to the
organization, and a sense of “that is how it has always been done” philosophy which has led to
some complacency. It is not due to the lack of anyone’s desire to have a high functioning Division,
it is simply a matter of limited staff resources and bandwidth to complete tasks and assignments.
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The lack of policies and procedures that stay current creates a liability for the City of Lodi. Human
Resources has become inundated with legal requirements in the areas of leave administration,
the affordable care act, “ban the box” compliance, and many more that were identified
previously, plus mulitiple bills that have been passed by legislation that directly impacts Human
Resources.
It is recommended that if the City is not able to add resources to the Division, contract or
consulting services should be retained to further strengthen the policies and procedures in the
Division in areas such as recruitment and selection, leaves administration, interactive process,
harassment and retaliation, investigation, etc. Some of these policies have been put in place, but
are significantly outdated.
Recommendations are provided in two categories. The first includes overall recommendations
for Human Resources and the second are more operational within the division.
Recommendations are based upon best practices and taking into consideration an optimal model
that limits liability exposure for the City of Lodi.
Overall Recommendations.
Recommendation #1:
Create a Human Resources Department that includes a Director of Human Resources and
incorporates the risk management functions. The City is challenged to stay abreast of
transactional assignments, but the critical functions of legal requirements, policies, procedures,
benefits updates, transparency, technology enhancements have not been updated or
maintained. Examples of legal trends in the public sector include the AB1484 obligations for
temporary employees, the affordable care act requirements, artificial intelligence initiatives,
California public employment relations board decisions that impact the public sector and labor
relations, CalPERS changes in regards to benefits administration, memorandum of understanding
language compliance, and disability retirement. These are examples of how complex Human
Resources as become over the past decade and confirms how important it is to have a
department structure with key leadership. California labor law, (ban the box) and no longer
having the ability to request salary history of your applicants are just a few areas that could lead
to legal liability if not implemented and managed properly.
Recommendation #2: Develop and adopt policies and procedures that establish a best practice
for the City. Policy development and compliance will provide the City the protection from
litigation that can occur when you have inconsistent practices applied within human resources
or with personnel decisions made at the department level. Human Resources staff needs to be
consulted by Department leadership when making personnel decisions in order to provide the
necessary guidance and ensure decisions made are legally defendable.
Recommendation #3: Streamline practices and procedures that have delegated authority to the
City Manager through Municipal Code or other documentation. For example, job descriptions
and administrative policies are presented to Council for approval. These types of documents have
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authority delegated to the City Manager. Before items are taken to Council for approval, analysis
needs to be conducted to determine if the City Manager already has authority.
Below are key recommendations identified by categories of Human Resource functions. These
are high level recommendations and are less critical but important actions that need to take place
for Human Resources to be effective in the organization and establish best practices that will
create standards that can sustain the organization through the next decade.
Recruitment and Selection.
Recommendation #1: Develop and finalize a recruitment and selection policy that is detailed on
the recruitment process, the types of recruitment, the establishment of an eligible list and the
requirements necessary when interviewing candidates from the list and how to remove
candidates from the eligible list. Inconsistent practices create a legal liability for the City.
Recommendation #2: Establish an eligible list with banding of the candidates that can be a few
options but is consistently applied to each recruitment. For example, band candidates with A, B
or C categories. Candidates in band A would be scores of 90-100%; band B would be scores of 80-
89%; and band C would be 70-79%. The hiring department would receive the top band of
candidates unless there is only one candidate, then the hiring department would get both the
top band and the next band. Another option would be having two bands, highly qualified and
fully qualified candidates. Highly qualified candidates would be individuals who scores 85-100%
and the fully qualified candidates would be individuals who score 70-84%. A policy such as this
creates a defendable process in circumstances when a recruitment process is challenged by an
applicant.
Compensation and Classification.
Recommendation #3: Establish compensation ranges for Department Director classifications to
streamline the approval process and reduce the need for recurring City Council involvement with
each director-level compensation adjustment.
Recommendation #4: Establish a policy limiting employee requests for classification studies to a
specific time of year. This approach will allow staff adequate time and resources to complete
each study efficiently that limit the request by employees to a specific time of the year.
Recommendation #5: Develop a classification review cycle to update job descriptions on a regular
basis. This will assist the City in streamlining the recruitment process as job descriptions will be
current and it will not require updating prior to posting the vacancy.
Benefits and Leave Administration.
Recommendation #6: Develop policies and procedures that accurately reflect the administration
of the City leaves programs. Policies that are current and compliant with federal and state laws
will protect the City from potential liability.
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Recommendation #7: Ensure all leaves employees’ are entitled to receive are codified in written
policy and posted on the website for transparency. This will eliminate potential employee
grievances as the rights of employees will be readily available.
Recommendation #8: Update the Executive Management Statement of Benefits document
annually and get approved by City Council. This has not been updated in 10 years and most
recently newly hired employees have received inconsistent information. Not only does this lead
to inconsistent practices, but also has a negative impact on employee morale.
Other Workplace Policies.
Recommendation #9: Utilize the Leibert Cassidy Whitmore consortium participation as a guide
for policy development.
Recommendation #10: Update the Personnel Manual and post on the City’s website.
Recommendation #11: Update the Administrative Policy Manual and post on the City’s intranet
site. Link each policy separately for easy access by City staff. Develop Administrative and City
Council Policies to clarify the authority that are applicable for policy decisions (Council) and
operational (City Manager).
Performance Management.
Recommendation #12: Develop a citywide tracking system for employee performance evaluation
due dates that is managed by Human Resources.
Recommendation #13: Develop a review process by Human Resources to verify fair and
consistent evaluations on a citywide basis.
Recommendation #14: Develop a policy on a Performance Improvement Plan program.
Recommendation #15: Provide training to all supervisors who write and deliver performance
evaluations.
Employee Development and Training.
Recommendation #16: Develop a citywide training program based on categories for employee
participation. Categories could include Supervision; Promotion/Succession Planning; Mandated
training; LCW consortium workshops.
Recommendation #17: Human Resources develop a tracking system for all training, mandated
and other, and maintain records in the Official Personnel File. A recent example of why this is
important, is training that was coordinated through Risk Management with an outside firm and
likely on a similar topic that would have benefited another City department. Human Resources
was not aware that this training was being coordinated, thus the facilitation of using this training
or vendor for multiple departments was not a consideration.
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Human Resource Information Systems Management.
Recommendation #18: Review the systems currently used by Human Resources to determine
opportunities to streamline processes by using technology. A few examples include, tracking
performance evaluation dates and onboarding employees.
Recommendation #19: Identify options with the current NeoGov and Tyler systems to add
modules to support functions through technology rather than manual processes.
Recommendation #20: Develop a comprehensive implementation action plan addressing and
prioritizing each of the recommendations. This plan should include a detailed timeline, resource
allocation, clear roles and responsibilities for each team member, any necessary support, and
routine feedback and adjustment mechanism.
CONCLUSION
The City greatly benefits from employees in the Division who are eager, hard working, and
committed to providing a high level of service to the City’s workforce. In all cases, the employees
were transparent with me during our interviews and follow-up communications, freely expressed
their interests, and demonstrated a genuine desire to improve Division efficiency and
effectiveness. However, they were also realistic that resources are limited and that while they
want to get to policy development and other functions that would benefit Human Resources and
the City, there are just not enough staff resources to get to these projects.
Elevating Human Resources to the Department level will create a strategic partner in the
organization and with the additional staff resources can improve the level of service throughout
the organization and become a premier department. Updated policies and procedures will allow
the City to be proactive and eliminate the exposure of legal risk that is associated with having
outdated or no policies in place. Leveraging technology to streamline processes and ensuring
policy transparency for employees would free up staff who are often tied up with manual tasks
or interrupted to answer questions. Also, the leadership of a human resources professional will
provide depth for staff with best practices in the field. Overall the entire organization would
benefit from a structure such as this recommendation.
As stated in the Executive Summary, the lack of policies in numerous areas creates a liability for
the City and exposure to potential litigation. These decisions would be difficult to defend without
the necessary background documents that provide guidance and references to the legal
requirements that demonstrate why decisions are made and supported by the City. A large
reason for the risk to the City is based on the level of staffing in the Division. Staffing levels
specifically contribute to the inability of staff to develop policies and procedures that would
protect the City from legal exposure and establish a high functioning department that
implements best practices. Overall, I believe the organization is vulnerable to receive a claim
against them in multiple areas that would be difficult to defend based on the lack of policy and
documented past practice.
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AGENDA ITEM B.3
COUNCIL COMMUNICATION
AGENDA TITLE:
Receive and File a Verbal Report on the Finance Divisions Observations (CM)
MEETING DATE:
February 11, 2025
PREPARED BY:
Bobby Magee, Interim Assistant City Manager
RECOMMENDED ACTION:
Receive and File a Verbal Report on the Finance Divisions Observations.
BACKGROUND INFORMATION:
In December 2024, the City Manager directed staff to study the operational aspects of the three Finance
divisions, including Accounting, Budget, and Revenue Services. While the process is ongoing, initial
observations included over 50 items recommended by staff as functional areas, processes, and current
workload efforts that could be improved upon.
Each of these items was assessed by attaching a risk factor associated with taking no further action. Once
the risk factor was applied, a priority list of projects was developed and documented for future action. Staff
has begun to take corrective action on many of the identified tasks; however, several of the items are multiple
months or years in arrears.
Staff has developed a verbal presentation to discuss the various risk factors, priorities, plans for addressing
several of the higher-priority items, and recovery plans for items currently in arrears.
STRATEGIC VISION:
3A. Fiscal Health: Promote City's transparency & fiscal fluency.
FISCAL IMPACT:
There is no fiscal impact to receiving and filing the verbal report.
FUNDING AVAILABLE:
Not applicable.
_______________________________________
Scott R. Carney
City Manager
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COUNCIL COMMUNICATION
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Finance Divisions Observations
Feb 11, 2025
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METHODOLOGY
Talking to Finance and Other Departmental Staff
Observations of Processes
Review of Staff Work
Application of Best Practices
Defining Priorities
Risk-Factor Driven First
Urgency Factors Second
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SUMMARY OF OBSERVATIONS BY FUNCTION
Customer Service
Revenue
Accounting
Budget
Treasury
General
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RISK FACTORS
Potential Violations of Law
Potential for Fraud / Loss / Malfeasance
Poor Internal Controls
Poor Customer Service Experience
Failure to Meet Public Expectations
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THE FRAUD TRIANGLE
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PRIORITY DECISIONS
Priority 1 (Most Urgent)
Matters of Law
Risk of Fraud / Malfeasance
Internal Controls
Priority 2 (Within 3-6 Months)
Required Reporting
Periodic Reconciliations
Priority 3 (Within 6-12 Months)
Internal Efficiency Projects
Priority 4 (When Time Permits)
Would be “Nice to Get to” but Typically Can Wait
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SUMMARY OF PRIORITY ONE OBSERVATIONS
SCO Report, Audit, and Federal Single Audit 8 Weeks Behind Schedule
Uncollectable Debt Write-Off (Portions Not Completed Since 2016)
Overstates the City’s Financial Position by $2 Million
Extreme Dissatisfaction with Customer Service Experience
Customer Connect, Kiosks,Wait Times
Accounting & Reconciliation Close Process – Monthly Accounting Close not Completed
Since July 2023
Payroll Reporting to CalPERS – Four Pay Periods Behind (Still Not Timely)
Inaccurate Reporting to CalPERS – Since 2022 and Pensions for Certain Retirees May Be Affected
Payroll Reconciliations
Over 110 Errors Found in First Pay Period – Caught Before Release
Several Current Employees May Be Affected
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SUMMARY OF PRIORITY ONE OBSERVATIONS
Bank Reconciliations – 8 Months in Arrears
Utility Billing Reconciliation to General Ledger (Since 2016)
Audit Finding in 2022-23 – Has Not Been Addressed
Previous Audit Finding - Inadequate Processes over Reconciliation of Grant Activity
Unresolved
Customer Service Email Response Time – Currently 10 Days
Customer Connect Form Response Time – Over 9,000 in Queue
Customer Service State Reporting – HEAP / LIHWAP / CAPP
Currently 230+ Days in Arrears; State Requirement is 30 Days
Reports to Council – Check Register and Payroll Warrants
General Separation of Duties
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SUMMARY OF PRIORITY TWO OBSERVATIONS
Purchasing: P-Card Reconciliations – Some Greater Than 12 Months Overdue
Purchasing: P-Card Approval Process – Not Always in Compliance with Proper
Documentation
Purchasing: Contract Roll – Potential of Inaccurate Budget Numbers (All Contracts
Rolled as of 2/5/25)
Bonds: Continuing Disclosures – Completed Timely With Consultant Assistance
Customer Service
Customer Balance Transfers Currently Three Months in Arrears
Returned Checks Not Reconciled Timely
Credit Refunds Two Months in Arrears
Rebates Two Months in Arrears
Utility Billing Customer Data Errors Nine Months in Arrears
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CUSTOMER SERVICE WAIT TIMES (PHONES)
Number of
Calls Average Time on
Answered Each Call Average Wait Time Average Longest Wait Time Average Total Abandoned Average Abandoned Time
Calculated in Minutes
July 2448 7:38 44.44 120 682 12.40
August 2767 8:02 51.36 124 851 12.29
September 2057 8:25 43.05 125 615 13.18
October 2335 9:56 51.15 129 707 19.16
November 1633 8:25 50.56 137 537 19.15
December 1731 12:42 49.13 132 677 39.40
January 2141 9:01 49.20 154 826 26.00
Average 2158.86 9.09 48.41 132 699 20
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CUSTOMER SERVICE WAIT TIMES (LOBBY / EMAIL)
Lobby Wait: 60-90 Minutes
Email: 10 Days
Customer Connect Portal:
9,000 Unanswered in Queue
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ACCOUNTING DISCLOSURES TO AUDITORS
Bank Reconciliations Not Completed Timely
Write-offs of Uncollectable Debt Not Completed Since 2016 (Revenue
Overstated)
Utility Billing Not Reconciled with the General Ledger (Previous Audit Finding)
Grant Activities Not Properly Reconciled (Previous Audit Finding)
Payroll Reporting to CalPERS Inaccurate
No Closing / Reconciliation Activities Completed for Monthly Financial Reports
City Unable to Meet Required State Deadlines for Reporting of Audited
Financial Data
P-Cards Not Reviewed / Approved / Reconciled on a Timely Basis
Multiple Lapses in Appropriate Internal Controls
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TAKEAWAYS
Positives:
The City’s Long-Term Frugality Led to Healthy Reserves
Risk Factors – No Evidence of Fraud or Malfeasance So Far
Pitfalls:
Lack of Staffing Led To:
City Not Meeting its Legal Obligations
Budget to Actual Expenditures Not Actively Tracked by Function
Poor Internal Controls (Moss Adams Currently Evaluating)
Elements of the Fraud Triangle Appear to be Present (Financial Risk to the City)
Excessively Long Wait Times for Customer Service
Routine Tasks Not Being Completed Across All Functional Areas
Expected Qualified Opinions on Portions of the 2023-24 Audit
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RECOVERY PLAN
Activities Underway
Contract with Baker Tilly for Accounting / Auditing Daily Activities, and Development
of Monthly and Year-End Close Checklists, Payroll Processing, Training of Staff, and
Implementation of New Best Practices ($55,000)
Recruiting for Accounting Manager and Accounting Supervisor
Utilizing Additional Contracted Resources When Available for Items in Arrears
Moss Adams Completing Internal Controls Assessment ($50,000)
Analyzing Existing Workload vs Existing Workforce
Exploring Better Uses of Software Behind Customer Connect
Exploring Possibility of a Queue Flow System / Cash Management System
Analyzing Call Data, Walk-Up Data, and Emails to Determine Resources Needed
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QUESTIONS
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AGENDA ITEM B.4
COUNCIL COMMUNICATION
AGENDA TITLE:
Adopt a Resolution Ratifying Amendment No. 2 to the Professional Services Agreement with Baker Tilly
Advisory Group, LP of Mountain View in the amount of $55,000, which was executed as a Change Order by
the City Manager and adding $150,000 for additional Professional Financial Services for a Total Contract Not
to Exceed $308,900 ($103,900 Approved + $55,000 ratification + 150,000 for additional support) (CM)
MEETING DATE:
February 5, 2025
PREPARED BY:
Laurie Montes, Assistant City Manager-Part-Time
RECOMMENDED ACTION:
Adopt a Resolution Ratifying Amendment No. 2 to the Professional Services Agreement with Baker Tilly
Advisory Group, LP of Mountain View, which was executed as a Change Order by the City Manager in the
amount of $55,000 and adding $150,000 for additional Professional Financial Services for a Total Contract Not
to Exceed $308,900 ($103,900 Approved + $55,000 ratification + 150,000 for additional support).
BACKGROUND INFORMATION:
On August 28, 2024, the City Manager entered into a Professional Services Agreement with Baker Tilly
Advisory Group, LP (Baker Tilly) in the amount of $60,000 to provide Library Assessment Services to analyze
the best structure for the sustainability of programming and operations. Baker Tilly’s analysis compared the
benefits and challenges of the various library models allowed under state statute, and provided financial
analysis and models of the alternatives, and their final report was presented to the City Council at a special
meeting on January 28, 2025.
On October 2, 2024, the City Council authorized waiving competitive bidding requirements for the original
Professional Services Agreement pursuant to LMC 3.20.070 and approved Amendment No. 1 to the contract
($43,900) adding Long-Range Financial Forecasting Services for the City’s General Fund. Pursuant to Lodi
Municipal Code (LMC) Section 3.20.075, professional/technical services contracts, including accounting and
financial services, are exempt from the City’s advertising and bidding requirements. Given the City’s financial
position, increasing pressure on financial resources and growing service demands, Council approved adding
consulting services through Baker Tilly to provide a more robust Long-Range Financial Forecast.
Recent turnover in multiple areas of finance led to the discovery of significant concerns in accounting,
budgeting, revenue, customer service, and payroll. Many of the issues found go back months or years, and
are due to inadequate staffing levels and a lack of established procedures and training protocols. These
included: payroll reporting and errors, failure to report to CalPERS, improper reconciliation of bank accounts,
utility billing, and credit card transactions, a lack of accounting procedures and delayed closing periods,
statutory reporting requirements and annual audit tasks, excessive customer wait times, and other operational
gaps that needed immediate attention.
The discoveries reflected systemic issues and a lack of resources needed to address essential functions. The
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COUNCIL COMMUNICATION
The discoveries reflected systemic issues and a lack of resources needed to address essential functions. The
accuracy and integrity of the City’s financial records are a paramount priority. Staff have reached out to many
consultants and temporary support agencies. Baker Tilly was able to provide immediate required assistance.
Therefore, in light of the urgent nature of these findings and the need for additional support to complete these
time sensitive tasks, the City Manager executed Amendment No. 2 as a change order to the Professional
Services Agreement with Baker Tilly in the additional amount of $55,000 to assist with the backlog of bank
reconciliations, payroll activities, revenue collections, and annual financial reports. Staff now brings
Amendment No. 2 back to Council and recommends ratification of the City Manager’s action and Baker Tilly
providing these additional services.
Further Council action is now also requested in the form of Amendment No. 3 to Baker Tilly’s Professional
Services Agreement to continue to provide services while recruitments are underway to fill multiple vacancies.
The need for additional permanent resources is under evaluation and will be presented to Council either as a
mid-year adjustment or for next fiscal year budget. Additional staff were redirected to the Payroll Division from
other Departments to ensure payroll is completed timely and accurately. Permanent redirection is not a
recommended option as it creates a backlog of work in other operational areas of the City. Additional contract
resources are needed until the backlog is cleared and until required functions are being performed properly
and timely. In addition to approving the ratification of Amendment No. 2, staff recommends approval of
Amendment No. 3 to provide an additional $150,000 in funding for services. If Council chooses to ratify
Amendment No. 2 and approve Amendment No. 3, this will bring the total Baker Tilly agreement to a not-to-
exceed amount of $308,900 (Original contract of $60,000, amendment No. 1 of $43,900, ratification of
Amendment No. 2 $55,000 and proposed additional financial services Amendment No. 3 of $150,000). Staff
anticipates these services will be needed until early next fiscal year (August/September 2025).
STRATEGIC VISION:
3A. Fiscal Health: Promote City's transparency & fiscal fluency.
FISCAL IMPACT:
These are critical resources necessary for the City’s fiduciary responsibilities. Amendment No. 2 ratification is
$55,000, and Amendment No. 3 is for $150,000.
FUNDING AVAILABLE:
Funding for the additional services is available in 10020202.72450
_______________________________________
Scott R. Carney
City Manager
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RESOLUTION NO. 2025-____
A RESOLUTION OF THE LODI CITY COUNCIL RATIFYING AMENDMENT NO.
2 TO THE PROFESSIONAL SERVICES AGREEMENT WITH BAKER TILLY
ADVISORY GROUP, LP, IN THE AMOUNT OF $55,000, WHICH WAS
EXECUTED BY THE CITY MANAGER AS A CHANGE ORDER, AND
APPROVING AMENDMENT NO. 3 TO THE AGREEMENT IN THE AMOUNT OF
$150,000 FOR ADDITIONAL PROFESSIONAL FINANCIAL SERVICES,
BRINGING THE TOTAL CONTRACT TO AN AMOUNT NOT TO EXCEED
$308,900
========================================================================
WHEREAS, on August 28, 2024, the City Manager entered into a Professional Services
Agreement with Baker Tilly Advisory Group, LP (“Baker Tilly”) in the amount of $60,000 to provide
Library Assessment Services analyzing alternative library models and their financial implications
for sustainable programming and operations; and
WHEREAS, the City Council approved a resolution on October 2, 2024, waiving bid
requirements for the original Professional Services Agreement pursuant to Lodi Municipal Code
(LMC) Section 3.20.070, finding Amendment No. 1 consistent with LMC 3.20.075, and approving
the additional service fees in the amount of $43,900, for a total not to exceed $103,900. This
allowed Baker Tilly toprovide Long-Range Financial Forecasting Services for the City’s General
Fund, supporting informed and transparent decision-making; and
WHEREAS, recent turnover in the Finance Department revealed significant operational
deficiencies, including payroll errors, delays in financial reconciliations, and a backlog of critical
accounting functions, putting the City at risk by not meeting statutory reporting deadlines and
impacting operational efficiency; and
WHEREAS, in light of the urgency of these findings, the City Manager executed
Amendment No. 2 to the Professional Services Agreement with Baker Tilly as a change order to
add the amount of $55,000, for a total not to exceed amount of $158,900. Amendment No. 2
allowed Baker Tilly to provide essential consulting support to address these immediate financial
challenges, and ensure compliance with financial reporting requirements and address critical
operational deficiencies, and it has now been brought back to Council for ratification; and
WHEREAS, there continues to be a backlog of accounting and financial tasks required to
ensure the accuracy and integrity of the City’s financial records, and maintain critical functions
while recruitment for permanent staff is underway, staff recommends approving Amendment No.
3 to the agreement with Baker Tilly in the amount of $150,000, bringing the total contract amount
to $308,900.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby ratify
Amendment No. 2 to the Professional Services Agreement with Baker Tilly Advisory Group, LP,
in the amount of $55,000, which created a total contract amount of $158,900, as shown in Exhibit
1 to the proposed Amendment 3 included as Attachment 1 to this agenda item; and
BE IT FURTHER RESOLVED that the Lodi City Council does hereby approve Amendment
No. 3 to the Professional Services Agreement with Baker Tilly in the amount of $150,000 for
additional professional financial services, bringing the total contract not-to-exceed amount to
$308,900, as shown in Attachment 1 to this agenda item; and
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BE IT FURTHER RESOLVED that the Lodi City Council does hereby authorize the City
Manager to execute all necessary documents associated with the Amendments; and
BE IT FURTHER RESOLVED, pursuant to Section 6.3q of the City Council Protocol
Manual (adopted 11/6/19, Resolution No. 2019-223), the City Attorney is hereby authorized to
make minor revisions to the above-referenced document(s) that do not alter the compensation or
term, and to make clerical corrections as necessary.
Dated: February 11, 2025
=======================================================================
I hereby certify that Resolution No. 2025-____ was passed and adopted by the City
Council of the City of Lodi in a regular meeting held February 11, 2025, by the following votes:
AYES: COUNCIL MEMBERS –
NOES: COUNCIL MEMBERS –
ABSENT: COUNCIL MEMBERS –
ABSTAIN: COUNCIL MEMBERS –
OLIVIA NASHED
City Clerk
2025-_____
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