CITY OF CARMEL-BY-THE-SEA

Council Report
March 3, 2015
To:

Honorable Mayor Burnett and Members of the City Council

From:

Douglas J. Schmitz, City Administrator

Subject:

The Municipal Organization---Past, Present and Future

RECOMMENDATION(S):
Receive Status Report
EXECUTIVE SUMMARY:
At the November 2014 City Council meeting, the Council was presented a list of eight (8)
items recommended to be pursued which arose from my review of the municipal organization.
That review, contained in a report entitled The Municipal Organization---Past, Present and
Future--- was requested by the City Council in October. To the list of eight (8) items, Council
added four (4) additional subjects. Here is a status report on the twelve (12) items.
ANALYSIS/DISCUSSION:
1. Directing the City Attorney and City Administrator to bring to Council within the next two months a
draft Whistleblower policy.
STATUS: A policy was presented to Council at the January regular meeting. Council continued it to
February, when it was approved.
2. Authorizing the City Administrator to have the auditor, JJACPA, Inc., undertake an audit of all City
issued credit cards.
STATUS: This audit is due in latter March.
3. Authorize the City Administrator to have JJACPC, Inc., audit the Deposit Fund.
STATUS: This audit is due in latter March.
4. Requesting that the monthly warrants list or a separate document included in the monthly agenda
packet include the cumulate total of each listed vendor as well as the amount authorized for each
vendors contract. Alternatively, if this effort proves to person power intensive since all entries must
be hand entered, direct that the most expensive fifteen (15) contracts be listed with the cumulative
total and the authorization limit.

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Agenda Item: 7.G

STATUS: Beginning in December, fifteen (15) of the larger checks on the monthly register have listed
the authorized limit for the particular contractor. As of the March meeting, an individual summary of the
purpose of each check is listed.
5. Authorize the staff to seek proposals from private companies for handling the Citys payroll.
STATUS: An award of bid for a contractor to handle payroll and HR functions is on the 3 March agenda.
6. Initiating at least quarterly in 2015, and for reconsideration in late 2015 depending upon its success, a
meeting of Council, citizens, Department Directors and Managers and the City Administrator where any
question can be put forth to any elected or appointed official.
STATUS: The first session was held on 10 February. Future sessions will be on the second Tuesday of
the second month of each quarter. Next session will be on 12 May. This is a one year project to be reevaluated
at end of 2015.
7. Scheduling a future study session for the purpose of scaling back the projects list for 2014-15 and the
years beyond.
STATUS: COMPLETED; held on 1 December 2014. Provisional Budget for 2015-16 will reflect projects
timelines and status.
8. Authorizing the staff to commence a rewrite of the Personnel Code.
STATUS: Awaiting hiring of Human Resources Manager; recruitment underway.
9. Authorize a letter to the Grand Jury regarding recent events within the City.
STATUS: COMPLETED
10. Authorize the outsourcing of Human Resources.
STATUS: Bid award on agenda for 3 March. Recruitment for an In-house HR Manager is underway.
11. Authorize to move forward with new IT system.
STATUS: Awaiting hiring of IT Manager. Recruitment closed on 20 February.
12. Authorize this list of projects, tasks to be a fluid document to add or delete as needed.
STATUS: Unchanged

FISCAL IMPACT:

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Agenda Item: 7.G

Budgeted:

Funding Source:

PREVIOUS COUNCIL ACTION/DECISION HISTORY:

Past, Present, and Future report was given on November 4, 2014

ATTACHMENTS:
Minutes Excerpt from the November 4, 2014 Council Meeting.
APPROVED:

____________________________________
Douglas J. Schmitz, City Administrator

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Date: ____________________

Council Meeting Date: 3/3/15

Agenda Item: 7.G

MINUTES
REGULAR AND CLOSED SESSION MEETINGS
CARMEL-BY-THE-SEA CITY COUNCIL
Tuesday, November 4, 2014 4:30 p.m.
Council Chambers, City Hall
East side of Monte Verde Street
Between Ocean and Seventh Avenues
Carmel-by-the-Sea, California

Item 8.A:

The Municipal Organization---Past, Present, Future

The City Attorney will provide an update on the investigations into various contracts
and on pending litigation.
The City Administrator will provide comments on the organizational structure,
policies and practices, communications, employee issues, financial and contractual
systems, and proposed actions.
The City Council will discuss, and invite the public to comment, on Councils
practices on checks and balances, validations, organizational oversight and
consideration of possible actions.

City Attorney Freeman gave a staff report regarding the above listed items, (see attached report from
City Attorney).
City Administrator Schmitz gave a staff report regarding the above listed items, (see attached report
from City Administrator).
Mayor Burnett gave a review of his opinions as to the situation of the City, past, present and future.
Mayor spoke about the fundamental problems of the situation and the systems in place regardless of
who is in the organization.
Mayor Burnett opened the meeting to public comments, the following citizens spoke.
Richard Kreitman spoke about the Monterey Civil Grand Jury, examining all public funds, audits, and
communications from public. He will be submitting a request that the Civil Grand Jury to review the
Citys situation. Mr. Kreitman asked who was auditing the books when these amounts were exceeded
and is there a possibility that former employees will be reinstated?
Monty Miller asked the city to establish a Veterans preference.
Carol Kahn commented that she appreciated what she was hearing but asked why wasnt something
done when the first, second or third employee was let go, why was there no communication with the
staff.

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Howard Brunn thanked City Administrator Schmitz for being here and he realizes the Mayor is doing a
good job.
Barbara Livingston commented she was grateful for Council in the hiring of Doug Schmitz and the work
of City Attorney Freeman.
David Spare noted the situation that has happened here are appalling and horrible, he noted the 8
points City Administrator Schmitz laid out are necessary and would like to see those points adopted by
Council.
Ellis Miller thanked Council for what they have taken on. Mr. Miller is the Union Representative for the
city staff and noted they are hard working employees.
Bob Jenkins spoke about his business as a corporate crisis manager and offered his services to the
City.
Carolina Bayne noted that on July 4, she started a petition and with great gratification by the petition
process, she noted the real rewards will come.
Hugo Ferlito requested that the payroll process, HR department recruitment, be outsourced and noted
his delight with the process the City has taken.

Seeing no further comments, Mayor Burnett closed the meeting to public comments.

Council Member Talmage noted he agrees with all the points Administrator Schmitz provided, he feels
Technology is very important issue and needs to be addressed.
Mayor Pro Tem Beach agrees the city needs to move forward on the items listed, she also explained
about the information Council was receiving from past administration.
Council Member Theis noted she didnt ask enough questions and trusted the administration. She
noted Council should have listened sooner and hopes to learn from the process. She thanked
Administrator Schmitz for coming on-board and also thanked the City Attorney for his role.
Council Member Dallas thanked the community and staff for informing him on issues at hand. He also
thanked Attorney Freeman for holding the city together in a tough time. He asked the community to
keep communications open and move the City forward.
Mayor Burnett requested criticism is welcomed and direct it to the City Council.
Motion: Motion by Council Member Talmage, seconded by Council Member Dallas to adopt the
following items and authorize the City Administrator to move forward with the 12 directives.
Passed by Roll Call vote 5/0.

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Agenda Item: 7.G

1. Directing the City Attorney and City Administrator to bring to Council within the next two
months a draft Whistleblower policy.
2. Authorizing the City Administrator to have the auditor, JJACPA, Inc., undertake an audit of
all City issued credit cards.
3. Authorize the City Administrator to have JJACPC, Inc., audit the Deposit Fund.
4. Requesting that the monthly warrants list or a separate document included in the monthly
agenda packet include the cumulate total of each listed vendor as well as the amount
authorized for each vendors contract. Alternatively, if this effort proves to person power
intensive since all entries must be hand entered, direct that the most expensive fifteen (15)
contracts be listed with the cumulative total and the authorization limit.
5. Authorize the staff to seek proposals from private companies for handling the Citys payroll.
6. Initiating at least quarterly in 2015, and for reconsideration in late 2015 depending upon its
success, a meeting of Council, citizens, Department Directors and Managers and the City
Administrator where any question can be put forth to any elected or appointed official.
7. Scheduling a future study session for the purpose of scaling back the projects list for 201415 and the years beyond.
8. Authorizing the staff to commence a rewrite of the Personnel Code.
9. Authorize a letter to the Grand Jury regarding recent events within the City.
10. Authorize the outsourcing of Human Resources.
11. Authorize to move forward with new IT system.
12. Authorize this list of projects, tasks to be a fluid document to add or delete as needed.
AYES:

Council Members: Talmage, Dallas, Beach, Theis, Burnett

NOES:

Council Members:

ABSENT:

Council Members:

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Agenda Item: 7.G