A request for further review of results from a city employee performance-based bonus program led to a back-and-forth debate Tuesday night between members that ended with a vote to authorize the distribution of payments among employees.
City Councilman Brian Campbell asked for an independent third party review of results from the fiscal year 2010-11 Employee Incentive Program during a discussion Tuesday on whether to authorize City Manager Carolyn Lehr to distribute program incentive payments.
The incentive program, first introduced last May by Mayor Pro Tem Anthony Misetich, was approved by the council in June of last year.
A goal of $150,000 in new revenue or cost savings was set by the council for employees to earn a pool of $81,100. The council also agreed to add $50,000 to the incentive pool if employee-identified new revenue and cost savings reached $250,000.
According to city reports, employees came up with 25 service enhancements and 16 new revenue and cost savings ideas totaling $553,729.
Though these results were reviewed by Kathryn Downs, the city's deputy director of finance and information technology, in addition to law firm Liebert Cassidy Whitmore, Campbell said a "real third party review" was necessary.
"You can't tell me an employee inside the city counts," he said, referring to Downs. "I'm of the opinion [the program results] should have a higher threshold of review ... to absolutely conclusively demonstrate ... that this program worked."
Campbell argued the law firm didn't complete an extensive enough review. A letter from Liebert Cassidy Whitmore partner and Rancho Palos Verdes resident Mark Meyerhoff stated, "The scope of the firm's review was not a financial audit, nor should it be construed as an audit in conformance with generally accepted auditing standards. This firm accepted the City's determinations and estimates of savings or increased revenues as presented to it without further calculation, inquiry or analysis."
Mayor Tom Long said the firm's review was sufficient.
"They did a review, they’re a third party," he said. "That is a third party review."
City council members Doug Stern and Stefan Wolowicz, in addition to Long, advocated for honoring their commitment to staff by approving the program payouts.
"What you want is something that’s going to be very expensive," Long said to Campbell. "We don’t need to have an audit. ... You shouldn’t be moving the goal post in the middle of the game ... that’s exactly what you're suggesting be done."
Fees for an audit, investigated by city staff, were estimated to be in excess of $10,000, according to a city report. Campbell, who did not suggest an audit, instead proposed a review by the Finance Advisory Committee.
"This is an opportunity to really build solid trust behind a new program," he said. "We can vote on this tonight, make it contingent on the FAC signing off and verify these savings stood up to scrutiny."
But after much debate, and a "No" vote from Campbell, the council authorized program payment distribution by Lehr. Long suggested she consult with the upcoming new council regarding program results and specific identified savings.
And just weeks until that new council is in place and Long, Stern and Wolowicz are replaced by new members Susan Brooks, Jerry Duhovic and Jim Knight, Stern suggested the new group make changes to the program as they see fit.
"For the purposes of what we said we would do, I'm in favor of authorizing payment of the bonuses," he said. "We laid out the rules, [employees] met it, we meet our commitment. ... New council, revise the program if you wish."