HomeMy WebLinkAbout12/03/1996, C-8 - EMPLOYEE COMPUTER PURCHASE PROGRAM council
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CITY OF SAN LUIS 0BI,S, PO0
FROM: Bill Statler, Director of Finance
SUBJECT: EMPLOYEE COMPUTER PURCHASE PROGRAM
CAO RECONII%UNIDATION
Approve an employee computer purchase program that provides employees with a modest
financial incentive to purchase computers that are compatible with the ones they use at work.
DISCUSSION
Overview
The purpose of this program is to improve organizational productivity by encouraging employees
to purchase and use home computers by providing them with a modest financial incentive to do
so. In striking a reasonable balance between the benefits of this to the City and to the employee,
the loan program places the primary financial obligation on the employee for the purchase price
of the computer hardware and software, with financial assistance from the City in the form of
a no interest loan repaid through automatic payroll deductions.
Why is this a good progrmn for the City?
As set forth in the City's management information systems policy, the effective use of technology
is one of the key strategies available to us in achieving our goals of delivering quality services
to our customers and improving productivity. In order for technology to realize this promise, it
is critical that employees be well-trained in its use.
While the City is committed to an ongoing program of formal training, the reality is that skill
development will be much faster, and will occur in greater depth, if employees have computers
at home with the same software that the City uses. This allows employees (on a voluntary basis)
to use these applications more frequently, explore their features in greater detail, and to do so at
their own leisure and pace in a comfortable environment. From a City cost perspective, it would
be extremely expensive for employees to devote this kind of time to training during work hours,
and as a practical matter, it will never be available. By providing an incentive for employees to
have a computer at home with applications similar to the ones they use at work, the City will
benefit significantly by making more effective use of our information technology resources.
The benefits of this program are especially pronounced at this time as we begin a major
organization-wide change in our standard desktop operating system and office applications.
While this is the primary reason for bringing this program forward at this time, we believe this
will continue to be an important ongoing productivity improvement strategy even after the current
migration to Windows 95, Office 95 and Groupwise is complete.
Council Agenda Report- Employee Computer Purchase Program
Page 2
Proposed Program Features
The proposed program is provided in Exhibit A. The following summarizes key program
features:
■ Maximran loan amount The City will loan employees up to $3,000 for the purchase of
computer hardware and software. Regardless of the loan balance, employees may not
have more than one loan outstanding at any time.
■ Loan repayment Repayment will be made through equal bi-weekly payroll deductions
over a maximum period of 30 months. Repayment in full will be accepted at any time
without penalty to the employee.
■ Interest No interest will be charged by the City on loans under this program.
■ Payment upon terrninadon Any remaining loan balance is due and payable upon
termination, and will be deducted from the employee's final check.
■ Eligibility. Only regular employees who have successfully passed their probationary
period, and have no garnishments, mandatory child care deductions, or similar liens in
place at the time of application, are eligible to participate in this program. Contract
employees may participate in this program under the following conditions: their
employment contract generally extends to them the same benefits as regular employees;
and the repayment period does not extend beyond their contract term.
■ Usage The predominate use of any computer equipment or software purchased under this
program is restricted to participants and their immediate family members. Any items so
purchased will not be sold or otherwise transferred for the use of others until such time
as the City's loan is repaid in full.
Programs in Other Cities
We sent 450 surveys to virtually every city in California asking them about programs that they
may have to financially assist employees in having a computer at home. The results of this
survey are provided in Exhibit B, and are summarized as follows:
Summary of survey results As of the survey cut-off date of November 18, we have received
218 responses. Of these, 88 cities have some kind of assistance program in place at this time.
The most common approach (83%) is some type of direct loan program. Of the 73 cities with
loan programs:
■ 59% have loan maximums of$3,000 or more.
■ 82% offer no interest loans.
■ 84% offer repayment periods of 24 months or more; of these, 44% offer loan repayment
periods of 30 months or longer.
■ The most frequently cited reason for their program is improved training and productivity.
Council Agenda Report - Employee Computer Purchase Program
Page 3
In summary, the key features of the proposed program are in the mainstream of those offered by
other cities in California. In crafting the proposed program, we incorporated what we believe
are the best attributes from each of the programs we reviewed.
Employee Interest in this Program
To determine if there was employee interest in this program, we surveyed employees in October
of 1996, asking them if they would be interested in participating in this type of program within
the next twelve months. The results of this survey are provided in Exhibit C, and summarized
as follows:
Swnmmy of swvey results. 126 surveys were received from regular employees, who are the
target group for this program. Of these responses, 106 employees (84%) expressed interest in
participating in this type of program. As reflected in the responses by department as presented
in Exhibit C, there is interest in this program throughout the organization.
CONCURRENCES
The MIS Steering Committee concurs with this recommendation.
FISCAL IMPACT
There are no direct fiscal impacts associated with this program: this is a loan program, not an
expenditure program. However, there will be indirect impacts in two areas:
■ Prognan a&nh s&a orc There will be some staff impacts in administering this program
such as processing loans,reimbursement payments, and payroll deductions, and answering
employee questions about the program. While the level of this program support will
depend on the level of.participation, we do not believe that this impact will be significant.
■ Interest earnings. There may be some impact on interest earnings. Assuming 50
employees participate in the program at any one time, lost interest earnings might be
about $4,900 annually assuming average loan balances of$1,800 and an interest yield at
current market rates of about 5.5%. When compared to the productivity benefits of this
program, this is a very small cost: the per employee cost is about $8 monthly; this cost
is fully offset in productivity savings if employees use their home computer in a "training
mode" for about 20 minutes a month.
The only potential direct cost facing the City is the possibility of loan default. Because the loan
is secured through a mandatory payroll deduction, we believe the likelihood of this occurring is
remote. The only potential exposure is at termination if the final check is not large enough to
cover the remaining loan balance. Again, we believe the likelihood of not being able to recover
costs in this case is very remote. None of the cities we surveyed reported problems with this,
and we do not expect to have them either.
Council Agenda Report- Employee Computer Pwchase Program
Page 4
ALTERNATIVES
■ Do notldng. Based on the benefits that the proposed program will provide the City, and
the absence of any direct costs (and very modest indirect costs), this alternative is not
recommended.
■ Modify progron feature& There are a number of proposed program features that could
be expanded or modified; however, we believe the proposed program reflects a
mainstream approach,and incorporates the best administrative features from the other city
programs we reviewed
EDITS
A. Proposed employee computer purchase program
B. Summary of survey results: practices in.other California cities
C. Summary of survey results: employee interest in this type of program
G:MISPOLCY/EMLNPROG.CAR
Exhibit-
EMPLOYEE COMPUTER PURCHASE PROGRAM
INTRODUCTION
Program Purpose and Overview
The goal of this program is to improve organizational productivity by encouraging employees to
purchase and use home computers by providing them with a modest financial incentive to do so.
In striking a reasonable balance between the benefits to the City and the employee, the loan
program places the primary financial obligation on the employee for the purchase price of the
computer hardware and software, with financial assistance from the City in the form of a no
interest loan repaid through automatic payroll deductions.
Goal and Policy Links
As set forth in the City's management information systems policy, the effective use of technology
is one of the key strategies available to us in achieving our goals of delivering quality services
to our customers and improving productivity. In order for technology to realize this promise, it
is critical that employees be well-trained in its use.
Program Benefits to the City
While the City is committed to an ongoing program of formal training, the reality is that skill
development will be much faster, and will occur in greater depth, if employees have computers
at home with the same software that the City uses. This allows employees (on a voluntary basis)
to use these applications more frequently, explore their features in greater detail, and to do so at
their own leisure and pace in a comfortable environment. From a City cost perspective, it would
be extremely expensive for employees to devote this kind of time to training during work hours,
and as a practical matter, it will never be available. By providing an incentive for employees to
have a computer at home with applications similar to the one at work, the City will benefit
significantly in making more effective use of information technology resources.
PROGRAM FEATURES
■ Maximum loan amount The City will loan employees up to $3,000 for the purchase of
computer hardware and software. Regardless of the loan balance, employees may not
have more than one loan outstanding at any time.
■ Loan repayment Repayment will be made through equal bi-weekly payroll deductions
over a maximum period of 30 months. Repayment in full will be accepted at any time
without penalty to the employee.
■ Interest No interest will be charged by the City on loans under this program.
■ Payment upon termination. Any remaining loan balance is due and payable upon
termination, and will be deducted from the employee's final check.
-I-
Employee Computer Purchase Program
■ Eligibility. Only regular employees who have successfully passed their probationary
period, and have no garnishments, mandatory child care deductions, or similar liens in
place at the time of application, are eligible to participate in this program. Contract
employees may participate in this program under the following conditions: their
employment contract generally extends to them the same benefits as regular employees;
and the repayment period does not extend beyond their contract term.
■ Usage. The predominate use of any computer equipment or software purchased under this
program is restricted to participants and their immediate family members. Any items so
purchased will not be sold or otherwise transferred for the use of others until such time
as the City's loan is repaid in full.
HARDWARE AND SOFTWARE REQUIR MENTS
■ Hardware. There are no specific hardware configuration requirements; however, the
employee's home computer must be capable of running the City's standard office
applications and desktop operating systems. Eligible hardware purchases include new
computers, upgrades to existing computers, printers, related taxes and shipping charges,
and extended warranty agreements offered at the time of purchase.
■ Software. Employees must purchase (or show other proof of ownership) the City's
standard office applications and desktop operating systems as established by the MIS
Steering Committee. In short, applications at home must be compatible with applications
at work if this program is to achieve its goals. No other software purchases are eligible
under this program; however, all participating employees must comply with all software
licensing requirements for their use of any hardware purchased under this program.
■ Non-eligible purchases. Costs related to installation,training, repairs,telephone lines, on-
line services, furnishings, or any other initial or ongoing costs are not eligible for funding
under this program, and are the sole responsibility of the employee. The City has no
responsibility for support and maintenance for any purchases funded under this program.
PURCHASE AND LOAN PROCEDURES
There are two approaches available to employees in receiving loan funds under this program:
■ Purchase through the City. With the approval of the vendor, employees may purchase
hardware and software through the City in accordance with Information System's standard
purchasing policies and procedures. Any such requests must be consolidated at one-time
in a format approved by the MIS Steering Committee and presented to Information
Systems for order placement. These items will be delivered to the employee's home
whenever possible. Upon receipt of all ordered items, the final costs will be consolidated
into one loan amount.
■ Reimbursement of costs. Employees may directly purchase items and submit requests for
-2-
Employee Computer Purchase Program
reimbursement. Under this approach, all expenditures must be made within a 90 day
period of time, and submitted in one consolidated request for payment. While not a
requirement of this program, employees are encouraged to review their proposed purchase
with the Information Systems Manager to ensure that they will be eligible for
reimbursement. No funds will be advanced to employees for the purchase of loan items.
■ Combination of approaches. A combination of approaches is allowable;however, all such
payments must be made within a 90 day period of time, and finalized into one loan
amount.
Regardless of the approach selected, employees are solely responsible for installing, maintaining,
and supporting items funded under this program. Further, resolving vendor or delivery problems
with the hardware or software purchased under this program is the sole responsibility of the
employee.
INSURANCE
For their own protection, employees should provide adequate insurance coverage to protect their
purchases against damages due to theft, fire, flood and lightning. The City does not assume any
liability for damage or theft of items purchased under this program. All agreed-upon payroll
deductions will continue through final payment even if the items funded from this program are
not available for the employee's use for any reason whatsoever.
TAX IlVIPLICATIONS
Questions regarding tax consequences of participation in this program should be directed to a
reputable tax advisor.
LOAN AGREEMENT
Employees will enter into a loan agreement that fully sets forth:
■ Amount and term of the loan, and the resulting amount of payroll deductions.
■ Employee's authorization for the payroll deduction to occur.
■ Equipment funded under the loan.
■ Employee's understanding and agreement with all of the terms of the City's employee
computer loan program.
■ Approval of the loan agreement by the Director of Finance.
PROGRAM ADMINISTRATION
The MIS Steering Committee is responsible for administering this program. The committee is
authorized to make minor administrative changes to the program which will make it run more
efficiently or reflect changes in policies and procedures in other areas of the City's operations,
provided that any such changes do not affect program objectives or key features.
-3-
Exhibit 13
Summary of Survey Results
EMPLOYEE COMPUTER ASSISTANCE PROGRAMS
We mailed surveys to 450 California cities asking them about programs that they may have to financially
assist employees in having a computer at home. As of November 18, 1996,we received 218 responses. Of
these,88 have some land of assistance program. The most common approach(83% of the affirmative
responses)is some type of direct loan program. Of the 73 cities with loan programs:
• 59%have loan maximums of$3,000 or more.
• 82% offer no interest loans.
• 84%offer loan repayment periods of 24 months or more; of these,44% offer 30 months or longer.
• The most frequently cited reason for their program is improved training and productivity(99%).
About the Cities with Loan Programs
Cities with loan programs are located throughout the State,and range in population from 82(Vernon)to
244,000(Riverside);63%of the cities are under 50,000 in population.
Population Total Percent
Less than 10,000 11 15%
10.000 to 24,999 14 19%
25,000 to 49,999 21 29%
50,000 to 100,000 18 25%
More than 100,000 9 12%
Total 1 73 1 100%
Summary of Loan Program Features
Marimum Loan Amount
No Percent
$4,000 or more 14 19%
$3500 to$3999 8 11%
$3,000 to$3,499 22 29%
$2500 to$2999 14 19%
Les than$2500 15 21%
Total 73 99%
Interest Rate
No Percent
No interest 60 82%
Low interest(generally between 5%to 6% 13 18%
Total 1 731 100%
Maximum Repayment Term
No Percent
36 months or more 24 33%
25 to 35 months 3 4%
24 months 34 47%
Us than 24 months 12 16%
Total 73 100%
Main Reason for Prouam
No I Percent
Improved training and productivity 72 99%
Ability to work at home 19 26%
Trip reduction/telecommuting 8 11%
Other 5 7%
Summary of Survey Results
EMPLOYEE COMPUTER ASSISTANCE PROGRAMS
Cities with Fmployee Computer Loan Programs
Main Reamm;for pmmm
Ma>m<im. Mae== Ahliq to Trip &*by=
Popahmn Loan Repayment Intnrat Improved Work P.C&IW Bc=W
Cift Aa of Inn Aemunt Teem Rah at Home Tcbwmmtjt Mje
Vernon 82 3,000 24 0.0% x x
Indian Wells 3,096 3,000 36 0.0% x
Rio Vista 3.693 None 36 0.0% x x
Sonora 4,399 2,800 24 3.0% x
Winters 4,982 None 24 0.0% x
Gonzales 5,794 2,000 12 0.0% x
Waterford 6,264 2.500 24 0.0% x
Sausrlito 7,433 2,500 25 0.0% x
Ripon 8.578 4,000 36 0.0% x
Crescent City 8,805 3.017 48 0.0% x
Healdsburg 9,799 1.500 24 0.0% x
Sierra Madre 10.947 3.000 24 0.0% x
Larkspur 11.976 2,500 36 0.0% x
Commence 12,423 1.500 24 0.0% x
Marysville 12,793 2.500 30 6.0% x
Grand Terrace" 13352 2.000 24 0.0% x
Mill Valley 13,582 3,000 35 0.0% x x x
La Palma 15,682 2,000 24 0.0% x
Arcata(police only)*** 15,997 None 12 0.0% x
Duarte 21.279 3,000 24 0.0% x x
Loma Linda•• 21.286 None 36 6.0% x x
So EI Monte(mgt only) 21,440 3,000 36 •0.0% x
South Lake Tahoe 23,048 None 12 5.5% x x
Bang(mgt only) 23.830 None 24 0.0% x
San Jacinto 23,976 3,000 24 0.0% x x
Moorpark* 27,170 3,000 36 5.0% x
San Carlos 27,545 3,500 36 5.6% x
Eureka 28264 11000 12 0.0% x x
Walnut 30,862 3,000 36 0.0% x x x
Murietta 31,412 None 12 0.0% x
La Verne 31,498 3,000 24 0.0% x
Stanton 32,229 2,500 24 0.0% x x x
Manhattan Beach 33,077 2,000 19 0.0% x
Claremont 33,178 2.500 24 0.0% x x x
Yuba 33.595 2.500 24 55% x
San Dimas 33.909 2,000 24 0.0% x
Cathedral City 34.493 netpa chwk 18 6.0% x
San Ramon 39,595 3.000 36 0.0% x x x
Tracy 42,082 1,870 24 0.0% x
Azusa 42,924 5,000 24 0.0% x
Bell Gardens 43,771 None 36 0.0% x x
Manteca 44,236 3,000 36 0.0% x
San Clemente 45.049 3.500 36 0.0% x
Poway 46.689 2.500 24 5.6% x x
Turlock 48.113 2,000 20 0.0% x
Novato••°° 49.072 None 36 6.0% x
Hemet 52.755 3,500 24 0.0% x
Lodi 53,903 2,500 36 5.6% x
Gardena 53,918 2,000 36 0.0% x x
Roseville 56.036 2.500 24 0.0% x
La Mesa 56,569 2500 23 0.0% x
Victorville 57.217 2,400 24 0.0% x
�8-9
Summary of Survey Results
EMPLOYEE COMPUTER ASSISTANCE PROGRAMS
Cities with F-oployee Computer Loan Programs
Main Reasemc for
mm®® slur®® Away m Trip rya
PoPotation Loan
Amomt Team Repayment Imeaeae hWwvcd wort Redobo/ Benefit/
As of 1/1/94 Rate at Home Tebsom Male
Apple Valley 58.572 2.500 24 0.0% x x
Hesperia 59,745 3,000 24 0.0% x x
Chino 62,850 3,500 36 0.0% x x
Upland 67.453 2,000 24 0.0% x x x
Monrovia 67545 3,000 18 0.0% x x x
Baldwin Park 72,029 1,500 36 0.0% x
Antioch 72.267 None 18 0.0% x
Rialto 79.953 4,000 12 0.0% x
Whittier 80,646 3,000 24 0.0% x
Corona 94,485 3,000 24 0.0% x
Ventura 96,969 3,500 36 0.0% x x
Santa Clara 97,137 3,500 24 6.4% x
Mission Viejo 100,629 3,500 24 0.0% x
Thousand Oaks 110,263 3,000 36 0.0% x
Escondido 116.938 3,500 24 6.0% x x x
Orange 117,956 5,000 48 0.0% x
Fullerton' 121.456 3,250 30 0.0% x
Garden Grove 151,807 3,000 24 0.0% x
Modesto 180,320 2,500 36 0.0% x
Fremont 184,590 3.000 36 0.0% x
Riverside 244,191 3,000 24 0.0% x x
Thee is an imermt rare of 9%:however.lids reimbursed to the employee duo*their tuition reimbWwm=t program,rewhEgm no net h terestcam
Fmpkgw must payar lost 10%of the east
"' Part ofpolieecmm=
"•' LIIFra1e
G:E )LNSRV
Summary of Survey Results
EMPLOYEE COMPUTER ASSISTANCE PROGRAMS
Other Assistance Programs
City and Population Prozram
Moorpark 27,170 Laptops provided to all Dept Heads,Asst to the City Manager and Deputy City Manager.
Colton 45,100 Laptops with docking stations for office use are provided to all department heads.
West Sacramento 42,810 Direct reimbursement of up to$1,200 from career enhancement program.
Mountian View 71.026 Direct reimbursement of up to$1,000 from professional development program.
Covina 44,469 Management staff may sell bacvk up to 200 hours of sick leave accruals towards computer
purchase or training(sick leave is currently paid—off at 50%of value).
Santa Clarita 147,228 Lower than market rate bank loans funded through payroll deduction.
Camarillo 56,497 Loan from employee's own deferred compensation(457 and 401a)plans.
Fairfield 86,514 Employees may purchase through City,"old"pc's"loaned"to employees.
Palos Verdes Estates 13.661 Employees may purchase surplus computers.
Chula Vista 149,347 Special terms on loan through City credit union;employees may purchase through City.
Petaluma 47,066 Employees may purchase through City.
San Bruno 40,405 Employees may purchase through City.
Solan Beach 13,434 Employees may purchase through City.
West Covina 99.824 Employees may purchase through City.
Woodland 42,474 Employees may purchase surplus computers.
Yountville 3.506 Employees may urchase surplus computers.
G:ENIPLNSRV
_ Exhibit (2-
MEMORANDUM
October 22, 1996
TO: MIS Steering Committee
FROM: Bill Statler, Director of Finance
SUBJECT: SURVEY RESULTS --EMPLOYEE COMPUTER PURCHASE PROGRAM
Summary of Results
As of October 22, 126 surveys have been received from regular employees,who are the target group for
this program. With about 225 networked computers in the City,this represents about half of our users.
Of these responses, 106(84%)were interested in the program. It should be noted that many of those
stating that they were not interested in participating in the program expressed strong support for the
program in general;they simply did not see themselves purchasing a new computer in the next 12 months,
in most cases because they already had recently purchased a computer for home use.
Conclusions
There is significant enployeee interest in this type of program,with the possibility that about 100
employees might be interested in participating in this program in its first year. Some interesting findings:
• We received interest in participating in this program from every department.
• An overwhelming majority— 74 out of 106(70%) — of those expressing an interest in participating
in this program already have computers at home. This underscores the significant potential for
improved productivity if employees have the same software at home that they have at work,and the
benefits to the City in creating an incentive for this to occur.
• Virtually all of those not interested in this program(97%)already have a computer at home.
• Employees in our field operations(Public Works,Utilities and Police)expressed the most interest in
this program — 62% of the "yes"responses came from these three departments.
• The most frequently cited benefit to the City was the improved training(and resulting increase in
productivity) that would result from employees having the same software at home that the City uses.
There was a recognition that even with formal training provided by the City,there simply won't be
enough time available at the work place to become intimately familiar with all of the features of our
new software. With compatible applications at home,employees can explore uses at their own
leisure and pace,and in greater detail than they would be able to do at work.
• A surprising response was the number of employees(12)who want to purchase a personal computer,
not for working at home(this was an expected response from some) — but at work! These
employees expressed interest in owning a personal lap—top computer in order to do better work in
the field by automating what they are currently doing manually.
Detail Survey Responses
Provided on the reverse side is a detailed summary of the survey responses from regular employees by
department,number of years with the City,and current ownership of a personal computer.
Where to from Here?
I will be surveying what other cities in California do,and if all goes according to plan,this will be an item
on the November 19 or December 3 Council agenda.
cc City Administrative Officer,Department Heads
Summary of Survey Results
EMPLOYEE COMPUTER PURCHASE PROGRAM
Aw
Yes No Total
Serve Demo�( hits Responses % Responses ...Eesponses % of Total
111 ME
Administration 2 50% 2 50% 4 3%
City Attorney 2 67% 1 33% 3 2%
City Clerk 1 100% 0 0% 1 1%
Personnel 3 75% 1 25% 4 3%
Finance 10 100% 0 0% 10 8%
Community Development 12 75% 4 25% 16 13%
Parks&Recreation 4 100% 0 0% 4 3%
Public Works 27 87% 4 13% 31 25%
Utilities 17 85% 3 15% 20 16%
Police 22 88% 3 12% 25 20%
Fire 6 75% 21 25% 1 8, 6%
�WUVAN N
Less than 1 year 5 100% 0 0% 5 4%
1 to 4 years 19 86% 3 14% 22 17%
5 to 10 years 37 80% 9 20% 46 37%
More than 10 years 45 85%1 8 15%11 53 , 42%
Yes 73 79% 1921% 92 73%
No 33 97% 1 3% 34 27%
Most Frequent Reasons for Interest
Improved/faster training on new applications by having the same software at home 85
Ability to work at home 44
Ability to access information from home(calendar,email, schedule,etc) 14
Ability to use a lap—top in the field 12
G:EAlPSRVY