HomeMy WebLinkAbout1993 02-01 FCA(EEEFCA) AGENDA
Brooklyn Center Financial Commission
February 1, 1993
City Hall
Council Chambers
✓1. Call to Order: 7:00 p.m.
-/2. Roll Call.
3. Approval of Minutes: January 4, 1993.
f4. Review of Financial Commission Terms.
The listing of members and terms sent out with the January 4th Agenda
contained one error. Commissioner Kelly's term does not expire until
December 31, 1995. A corrected listing is attached.
5. Subcommittee Reports:
a. Report of the Capital Spending Policy Subcommittee.
(Commissioners Boran and Kelly.)
b. Report of the City Council Salary Setting Policy Committee.
(Commissioners Escher and Peppin.)
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6. Survey of Severance Policies for Laid Off'Employees.
A survey of various cities' severance policies for laid off employees
conducted by Geralyn Barone, Personnel Coordinator, is attached.
7. Description'of City Funds Report.
At the January 4th meeting, the commission had requested a listing of
the City's various Funds and their purposes. That description is
attached.
8. Organizational Analysis.
Attached is an article on "Benchmarking" as it pertains to the
Commission's organizational analysis project. The City Manager will be
unable to meet with the Commission this evening because of a special
meeting of the City Council. He has asked that his report on
organizational analysis be deferred until the Commission's March meeting.
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9. Adjournment: 9:00 p.m.
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AC IT
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MINUTES OF THE PROCEEDINGS OF THE FINANCIAL
COMMISSION
OF THE CITY OF BROOKLYN CENTER
JANUARY 4, 1993
COUNCIL CHAMBERS
CITY HALL
CALL TO ORDER
Chair Donn Escher called the meeting to order at 7:05 p.m. in the Brooklyn Center city hall
council chambers.
ROLL CALL
Present at roll call were Chair Donn Escher, Commissioners Denis Kelly, Gregg Peppin, Vi
Kanatz, Ron Christensen, and Pat Boran. Member Boyd was excused from this evening's
meeting.
Others present: City Manager Gerald Splinter, Finance Director Paul Holmhmd, and, for
the latter portion of the meeting, Councilmember Rosene.
APPROVAL OF MINUTES - NOVEMBER 9. 1992
There was a motion by Commissioner Kelly and seconded by Commissioner Kanatz to
approve the minutes of the November 9, 1992, financial commission as submitted. The
motion passed unanimously.
TERMS OF COMMISSIONERS
Chair Escher requested, and the Commissioners concurred, that the staff review the terms
of the commission members, as it appears that a disproportionate number of them are
coming up for reappointment in 1993.
1993 ADOPTED BUDGET
Chair Escher reported on the city council approval of the 1993 budget at its December 10,
1992, meeting. He requested City Manager Splinter report on the 1993 budget details. City
Manager Splinter stated the city council removed from the 1993 budget the parks
department capital outlay item for a water tanker street flusher/tanker truck in the amount
of $77,700. The council placed $75,000 of this amount in the contingency fund as per
financial commission recommendations and placed the remaining $2,700 in city council's
professional services budget. He reported the state local government sales tax trust fund
will have an excess of revenue. In 1992 the City of Brooklyn Center will receive from that
allotment approximately an additional $140,000. The city council allowed the one-time
windfall of revenue to enter the 1992 budget, which will then automatically transfer into
fund balance as of January 1, 1993, and it designated that amount of money as reserve for
possible shortfalls in 1993 local government aids.
ELECTION OF CHAIR/APPOINTMENT OF VICE-CHAIR
Commissioner Kelly nominated Chair Escher as chair of the Financial Commission for 1993,
1-4-93 _1_
and Commissioner Christensen seconded. Chair Escher was elected chair of the financial
commission by unanimous vote. Chair Escher appointed Commissioner Boran as vice-chair.
ESTABLISHING 1993 PROJECT PRIORITIES
Chair Escher asked the commission to discuss the 1993 project priorities. The city council
has requested the financial commission look at the following items or areas: council salary
setting policy; capital spending policy; use of the benchmarking concept in phase 11
organizational analysis; 1994 budget; and the severance benefits for laid off personnel policy.
After discussion, the commission set up subcommittees for the projects. Commissioners
Boran and Kelly will form a subcommittee to report back in February to the commission
regarding a capital spending policy. Chair Escher and Commissioner Peppin were appointed
as a subcommittee to report back in February on city council salary setting policies. The
commission requested City Manager Splinter develop a pilot project within a department
or function which could use the concept of benchmarking as being used as a tool in phase
H of the commission's project of organizational analysis. Commissioners emphasized the
need to choose a number of communities we could benchmark or compare ourselves with
in a valid manner. The project should answer a number of questions, one of which is do
we have too many layers of management, are there methods which we can measure
productivity, compare number of employees, and account for the use of contracting for
services.
In the area of severance benef=its for laid off employees, the commission asked City Manager
Splinter for a survey or review of other public unit and city practices in this area. They
further requested a summary report of all the City funds and a description of them.
MEETING SCHEDULE
After discussion, it was agreed the commission would set a regular schedule of its meetings
on the first Monday of each month with additional meetings being called as needed.
ADJOURNMENT
Chair Escher adjourned the meeting at 9 p.m.
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1-4-93 -2-
BROOKLYN CENTER FINANCIAL COMMISSION
Appointed 7-13-92
(previously Financial Task Force)
Donn Escher, Chairperson Pat Boran
3107 65th Ave. N. 7001 Dallas Road
Brooklyn Center, MN 55429 Brooklyn Center, MN 55430
561-4533 520-5048(w) 520-1534(fax)
Term expires: 12/31/93 560-4805(h)
Term expires: 12/31/95
Denis Kelly
7130 Fremont Ave. N.
Brooklyn Center, MN 55430
296-3597(w) 296-4217 (fax)
561-1022(h)
Term expires: 12/31/65
Ulyssess Boyd
4807 Azelia Ave. N.
Brooklyn Center, MN 55429
537-3215
Term expires: 12/31/93
Viola (Vi) Kanatz
2901 O'Henry Road
Brooklyn Center, MN 55430
561-3069
Term expires: 12/31/94
Send items to:
Gregg Peppin
6824 Drew Ave. N.
Brooklyn Center, MN 55429
296-2585(w) 296-3949(fax)
561-7934(h)
Term expires: 12/31/94
Ron Christensen
6101 June Ave. N.
Brooklyn Center, MN 55429
533-1930
Term exl)ires: 12/31/93
Council Liaison Dave Rosene
City Manager Gerald Splinter
Director of Finance Paul Holmlund
Assistant Director of Finance Charlie Hansen
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PRESENTATION OF CAPITAL IMPROVEMENTS FUND POLICY
OUTLINE OF POLICY:
General
/Resolution ~ Similar to a policy, exceptions easy
ordinance Similar to a corporate by--law, exceptions
difficult
Required Review and Approval
Holmlund/splinter
Hoffman
Rosene
Finance Commission
objective of policy
Provide permanent source of funds
Provide funding for planned major capital expenditures
Provide alternative to external issue of debt
(includes interfund loans)
Scope of Policy
Expenditure Type- (per resolution)
Majo:c >$1001000
Permanent Life of 15 years or greater (GAAP)
Facility Building and/or improvements
(excludes equipment and vehicles)
Source of Funds
Proceeds on i.sstiance of bonds
Interest earnings
Excess debt retirement funds
txcess special assessment funds
Annual minimum contribution???
Authority to spend
Dollar Scone Authority
$0 to $100,000 Not eligible for funding from this
fund (general fund)
$100,001 to $200,000 City Council (simple majority) upon
recommendation from Finance commission
$200,001 to $500,000 City Council (4/5 majority) upon xecon-
mendation from Finance Commission and
public hearing
Over $500,000 Citizen Referc_ndum
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AA
~cpending .Limitations
Annual spending limited to 50% of.A interest earned
from $100,001 to $200,000 category.
balance of unrestricted capital improvement fund must be at
least 250
Asset for which funding is requested must be included in 5
year capital plan for at least two years.
Five year capital plan must be approved by City Council at
public hearing annually.
Interfund Loans: kb r
r o r , f,
May only be provided to and or funds with
future external funding.
Must be repaid within ten years at prevailing market
interest rates.,
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_ 10-13-92
To: Mayor Paulson & Members of the City Council
From: Phil Cohen
Re: ESTABLISHING A CAPITAL SPENDING POLICY:
Action: Referring this request to the Financial Commission
for their consideration and recommendations.
Since we now have in place a policy that addresses the
general fund operating funds and use of reserves, , the
council should consider having a policy that deals with
capital spending and use of those reserves.
We have had discussions on major expenditure items like the
remodeling of the existing city hall, building a new.city
hall, senior citizen center, etc.
The financing of these improvements will be very costly and
would be of major financial significance to the citizens of
Brooklyn Center.
The methods of financing - if funds are available would be
to pay cash for them, or by voter approval issue general
obligation bonds, or a combination.
In addition any building projects would have to be also
estimated for annual cost of operations, which wound fall
back on the general fund.
With this questions in mind, I felt it would be timely to
have the council consider this issue and then refer it to
the Financial Commission for their review and
recommendations.
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ET4/~ K
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1210.00
4/24/8
-59
Section 1210 -*Community Investment Fund (added
by Ord. . 89 89-553)
1210.00. Fund Created. There is hereby created a separate
fund to be designated as the Community Investment Fund. This
fund shall be maintained in the official city records and
administered by the Treasurer in accordance with the provisions
..of this section. -All surplus moneys in each separate improvement
fund in the Improvement Bond Redemption Fund which remain after
the costs of each improvement have been fully funded, and which
are not transferred to another separate improvement fund, shall
be transferred to the Community Investment Fund. In addition,
• the following shall be deposited in.this fund:
(a) All collections of special assessments and taxes
levied for the payment of the costs of an improve-
ment which are received after the improvement costs
have been fully funded,
(b) -Investment earnings generated by the moneys in the
Community Investment Fund, and_
(c) Any other moneys appropriated by the Council or
donated for the purposes of the fund.
The principal of the fund shall consist of all transfers from
the Improvement Bond Redemption Fund, subsequent collections of
special assessments and taxes, and other moneys appropriated or
donated to the fund. In addition, the principal shall be
increased annually by an amount equal to ten percent of the
investment earnings generated by the fund in the previous year.
The remaining investment earnings shall not accrue to the
principal and shall forever be treated as investment earnings
available for expenditure in accordance with this section.
1210.05. Purpose of Fund. This fund shall be used solely to
pay the capital costs of projects of general benefit to the City
of Minnetonka.
1210.10. Expenditure Limitations. _
(a) Expenditures from the fund shall be made solely from
accumulated investment earnings until 1993. In 1993 and
beyond, expenditures shall be made only from accumulated
investment earnings whenever possible.
(b) Expenditures may be made from principal, but may not
exceed an amount greater than the equivalent of the fund's
investment earnings for the prior two consecutive years.
If expenditures from principal are made, either they
must be structured as a loan to repay the principal, or
no further expenditures of any kind may be made from
the fund until investment earnings have reest4lished the
338A -
1210.15
principal at an amount equal to that existing before
the expenditures plus ten percent of the investment
earnings that would have been earned per year if the
principal had not been reduced.
1210.15. Funding Preference. Expenditures from the fund
for competing projects shall be granted in the following order of
preference:
(a) First Priority: Projects which can be funded within
the amount of-the available investment earnings.
(b) Second Priority: Projects
principal funds which have
principal amount borrowed.
using expenditures from
the capacity to repay the
(c) Third priority: Projects using expenditures from
principal funds which have no other reasonable funding
source, are non-revenue producing, ..require significant
funding, and will provide otherwise unattainable community
benefit.
1210.20. Funding Procedure. Expenditures from the fund may
be made only after compliance with the following procedure:
(a) The project to, be funded must have been included for at
least two years in the city's formally-adopted capital
improvement program.
(b) The City Council must hold a public hearing on whether
the proposed project should be funded. Notice specifying
the date, time and place of the hearing, the project to be
funded, and the amount of funding must be published at
least ten days before the hearing in the city's official
newspaper. In addition, efforts shall be made to give
notice to the community through°other reasonable means,
such as newspaper articles, cable television and any city
newsletter. The public hearing must be held on two separate
days at least 30 days apart. The date and time of the
second meeting shall be announced at the first.
(c) The City Council must make the following findings which
shall be incorporated into an adopted resolution:
(1) The project has sufficient community-wide benefit
as determined by a review of its intended users, the
degree to which it addresses a community-wide need or
problem, and its-consistency with other city
goals, programs or policies.
(2) The project to be funded could not occur but for
the use of the Community Investment Fund.
(3) The Community Investment Fund is not replacing
funding from another previously programmed or
available source.
(4) The project has been included in at least two
- -ft
1210.25
consecutive formally-approved-capital improvement
programs.
(5) If principal is used, the project has the ability to
reasonably repay the funds, and use of the principal does
not exceed the equivalent of the last two years'
investment earnings from the-Community Investment Fund.
(6) An estimate of the ongoing annual operating and
maintenance costs has been made and the source(s)
for paying such costs identified.
(d) If any of the findings in paragraph (c) cannot be made
and the project meets the expenditure limitations imposed
in Section 1210.10, expenditures may be made from the fund
only after the affirmative vote of at least five Council
members.
1210.25. Administrative Expenditures. The limitations imposed
in the sections above shall not apply to reasonable expenses necessary
for the administration of the Community Investment Fund.
1210.30. Amendments. No amendments may be made to Section
1210.10(b) except upon the affirmative vote of at least six members
of the Council. No other amendments to Section 1210.may be made
except upon the affirmative vote of at least five members of the
Council.
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- 33 8C -
T S~yC eSrE0 Pa L1,
WORKING DRAFT (2/1/'93)
POLICY AND PROCEDURE ON
MAYOR AND COUNCIL MEMBER TOTAL COMPENSATION
1. NEED FOR POLICY:
The Community is entitled to a clearly articulated, written description of the policy and procedure
for establishing the total compensation of local elected officials.
II. POLICY:
1. Service on the City Council is a civic obligation and an honor. The total
compensation of the Mayor and Council Members should, therefore, not encourage
candidacies based on monetary rather than public service objectives. However, the
compensation of Brooklyn Center elected officials shall be fair and equitable in order
to attract qualified candidates for local elective office.
2. The propriety of the compensation levels of the Mayor and Council Members shall be
0 evaluated through comparisons with compensation paid to similar officials within the
seven county metropolitan area.
3. The compensation levels of elected officials should be regularly reviewed and adjusted
to ensure compliance with the objectives of this policy and to avoid the need for
drastic or sudden compensation adjustments.
4. Compensation set pursuant to this policy and procedure shall be deemed to be the
total compensation for elected officials of the city with the exception of expense
reimbursement which shall be the same as provided all other city employees.
•
i
III. PROCEDURE:
1. The City Manager shall biennially conduct a survey of compensation paid to elected
officials of comparably sized municipalities with similarly sized budgets and tax bases
in the seven county metropolitan area. Surveys prepared by the Association of
Metropolitan Municipalities or the League of Minnesota Cities may be utilized in lieu
of the City Manager's survey.
2. The City Manager shall biennially prepare a compensation report that contains an
analysis of the survey information. The report shall compute the average amounts
paid to Mayors and Council Members; correlate survey results to the current
compensation of Brooklyn Center elected City officials; and, discuss possible
1 budgeta "PZ--==="y m impacts of indicated changes.
r
~3. The City Manager shall submit the compensation report to the City Council and the
Financial Commission prior to June 1, for information pertaining to the applicable
calendar year.
The Financial Commission shall biennially review the City Manager's compensation
report. Prior to July 1, of the same year, the Commission shall recommend to the
City Council that the compensation of the Mayor and Council Members either remain
the same or be changed to some specified amount in the manner prescribed by law.
5. Consistent with the City Charter, Section 2.07, the Mayor and Council Members
may, after conducting public hearings, set their compensation by ordinance. No
change in compensation shall be in effect until the January 1, following the next
succeeding general election.
IV. AUTHORITY:
The authority for establishing compensation for the Mayor and Council Members is found in
0 Minnesota Statutes 415.11 and the City of Brooklyn Center Charter, Section 2.07.
2
SvS r itrf ~~1"t 5 -ro -rife
WORKING DRAFT (2/1/'93) W%41C -N6pR A f-T
POLICY AND PROCEDURE ON
MAYOR AND COUNCIL MEMBER SAS TOTAJ. COMPENSATION
I. NEED FOR POLICY:
The Community is entitled to a clearly articulated, written description of the
g~o~~as policy and oxocedure for establishing the salaries total comrensat;nn of
local elected officials.
II. POLICY:
1. Service on the City Council is a civic obligation and an honor. The shies
total COmp_nsatinn of the Mayor and Council Members should, therefore, not
encourage candidacies based on monetary rather than public service
objectives. jlowever, the comensa ; on of Brooklyn Center eJ Pc-ted official S
shall be fair and equitable in order to attract qualified candidates for-
local eleglive of. ice.
it is in the best c t4~„ az.mun : ty thamt ':i.' ,~4-cc-r" - Zaiidl la le-:; L a zA
available fer dlsineent-Svc vc 1~ffid-elected of€lelals should net required subsidd:ze
-3- 2. The propriety of the salary compensation levels of the Mayor and Council
Members een-bz. aise shall be evaluated through comparisons with salaEles
co=e sation paid to similar officials within the seven county metropolitan area.
4- 3, The salami compensation levels of elected officials should be regularly
reviewed and adjusted to ensure compliance with the objectives of this policy and
to avoid the need for drastic or sudden ehanges compensation adjustments.
4. Compensation set nursuavt to this polin_v end procedt e shall be deemd to be
tbe totem compensation or elected officials of the city with the Rvneption of
expense reimbursement which shall be the same as provided a._U otbg r city
emplovees.
•
1
III. PROCEDURE:
1. The City Manager shall - laries
a~-ua~ biennially conduct a survey of
compensation paid to elected officials of comparably sized municipalities with
similarly sized budaet_s and tax bases in the seven county metropolitan area.
Surveys prepared by the Association of Metropolitan Municipalities or the League
of Minnesota Cities may be utilized in lieu of the City Manager's survey.
2. The City Manager shall annually biennially prepare a pelley compensation
report that contains an analysis of the survey information. The report shall
compute the average amounts paid to Mayors and Council Members; correlate survey
results to the current salaries compensation of Brooklyn Center elected City
officials; and, discuss possible budgetary and public perception "Impacts of
indicated changes.
3. The City Manager shall submit the peliey compensation report to the City
Council and the Financial Commission prior to June 1, for information pertaining
is
to
the P
E-& ettg appli cable calendar year.
4.
The
Financial Commission shall annHal-ly biennially review the City Manager's
pelley compensation report eew ee. Prior to July 1, of the same year, the
Commission must shall recommend to the City Council that the salaries
c_omnensation of the Mayor and Council Members either remain the same or be
changed to some specified amount in the manner prescribed by law.
5. Consistent with the City Charter, Section 2.07, the Mayor and Council Members
may, after conducting public hearings, set their salaries compensation by
ordinance. No change in sees compensation shall be in effect until the
January 1, following the next succeeding general election.
IV. AUTHORITY: .
The authority for establishing salaries gomnensa-ion for the Mayor and Council
Members is found in Minnesota State Statutes 415.11 and the City of Brooklyn
Center Charter, Section 2.07.
2
•
(EEEFCP)
1. NEED FOR POLICY
WORKING DRAFT
POLICY ON
MAYOR AND COUNCILMEMBER SALARIES
The Community is entitled to a clearly articulated, written description of the
process for establishing the salaries of local elected officials.
II. POLICY
1. Service on the City Council is a civic obligation and an honor. The
salaries of the Mayor and Councilmembers should therefore not encourage
candidacies based on monetary rather than public service objectives.
•
2. It is in the best interest of the community that excellent candidates seek
and be available for local elected offices. Salaries should not operate
as a disincentive and elected officials should not be required to subsidize
participation in public service.
3. The propriety of the salary levels of the Mayor and Councilmembers can be
also evaluated through comparisons with salaries paid to similar officials
within the seven county metropolitan area.
4. The salary levels of elected officials should be regularly reviewed and
adjusted to ensure compliance with the objectives of this policy and to
avoid the need for drastic or sudden changes.
•
III. PROCEDURE
1. The City Manager shall annually conduct a survey of salaries paid to elected
officials of comparably sized municipalities in the seven county metropolitan
-1-
area. Surveys prepared by the Association of Metropolitan Municipalities or
the League of Minnesota Cities may be utilized in lieu of the City Manager's
survey.
2. The City Manager shall annually prepare a policy report that contains an
analysis of the survey information. The report shall compute the average
amounts paid to Mayors and Councilmembers, correlate survey results to the
current salaries of Brooklyn Center elected City officials, and discuss
possible budgetary impacts of indicated changes.
3. The City Manager shall submit the policy report to the City Council and the
Financial Commission prior to June 1 for information pertaining to the
previous calendar year.
4. The Financial Commission shall annually review the City Manager's policy
report on salaries. Prior to July 1 of the same year, the Commission must
recommend to the City Council that the salaries of the mayor and Council-
members either remain the same or be changed to some specified amount in the
manner prescribed by law.
5. Consistent with the City Charter, Section 2.07, the Mayor and Councilmembers
may, after conducting public hearings, set salaries by ordinance. No
change in salaries shall be in effect until the January 1 following the next
succeeding general municipal election.
IV. AUTHORITY
The authority for establishing salaries for the Mayor and Councilmembers is found
in Minnesota State Statutes 415.11 and the City of Brooklyn Center Charter,
Section 2.07.
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•
•
MEMORANDUM
TO: Paul Holmlund, Director of Finance
r
FROM: Geralyn R. Barone, Personnel Coordinator
7
DATE: November 2, 1992
SUBJECT: Guidelines for Setting Salaries of Elected Officials
You had asked me to contact the Minnesota State Compensation Council (SCC) to
determine if there are any guidelines for setting salaries of elected state officials. I spoke
with Janet Lund (297-3697) of the SCC, and she said there is no written policy in Minnesota
to address this issue.
Ms. Lund said usually they compare to salaries in other states and in other parts of
Minnesota. She added the last few years there has been a freeze on elected officials
salaries, so even if a policy had been in place, it would not have mattered. Ms. Lund noted
some states tie increases to adjustments in compensation packages negotiated by the unions.
If you need additional information related to this, please let me know.
0
MEMORANDUM
TO: Gerald G. Splinter, City Manager
FROM: Geralyn R. Barone, Personnel Coordinator
DATE: October 15, 1992
SUBJECT: City Council Salary Review Process
I have conducted a survey of area municipalities to determine what process is used in
reviewing and setting salaries of the mayor and city council members. Most cities do not
have any sort of written policy, but many do have a regular review schedule. The survey
results are as follows:
ANNUAL REVIEW
Maplewood
Richfield
Fridley
Plymouth*
New Brighton*
REVIEW EVERY T
WO YEARS
Crystal
Robbinsdale
Woodbury
Burnsville
Mounds View
New Hope
Golden Valley
St. Anthony
VARIES OR SPORADICALLY
Maple Grove
Bloomington
Ramsey
Roseville
Apple Valley-.
Eden Prairie
Columbia Heights
Brooklyn Park
Hopkins
*New Brighton and Plymouth incorporate their council salary review into the annual budget
preparation process.
Most of the cities either use the Association of Metropolitan Municipalities (AMM) elected
officials salary survey or conduct phone surveys to determine what rates to set. Some tie
any increase into the amount of salary increases received by city employees. A few use the
Consumer Price Index (CPI) as a guideline for adjustments. Robbinsdale utilizes a salary
review committee made up of one representative from each council advisory commission.
0 If you need any additional information, please let me know.
N.apVeuiood
ORDINANCE NO. 654
AN ORDINANCE AMENDING THE MAPLEWOOD CODE
PERTAINING TO COMPENSATION FOR FlILTED OFFICIALS
Section 1. Section 2-23 is hereby amended as follows:
($6,600,00) per year, payable in monthly installments effective January 1, 1990,
and thereafter the Mayor's salary and the salary of each Councilmember shull be
adjusted annually based on a change in the cost of living. Such adjustment shall
be based on the cost-of-living index published by the Department of Labor. Such
adjustment becomes effective and automatic on the first of January of the year
for which it is made.
Section 2--23 Compensation. Pursuant to Section 415.11(1) of Minnesota Statutes,
the salary of the Mayor is hereby established at Seven Thousand Five Hundred
Dollars ($7,500.00) per year, payable in monthly installments and the salary of
each member of the Council is established at Six Thousand Six Hundred Dollars
Section 2. This Ordinance shall take effect upon its passage and publication.
Passed by the City Council of the
City of Maplewood, Minnesota, on the.
30th day of October, 1989.
Ayes - 5
Nays - 0
May or
ATTEST :
A ~
v f City clerk
DIJloiviSdQl-e
Robbinsdale City Code 205.01 (Rev. 1991)
0-:11 Section 205 - Salaries of Elected Officials
205.01. Council salaries. Subdivision 1. Mavor. The salary of the mayor is
$6,600 per annum.
205_03. Councilmembers. The salary of each member of the council is $5,280 per
annum.
205.05. Monthly payments. The salary of the mayor and councilmembers is payable
once monthly.
205.07. Council salary committee. A committee composed of the chairperzons of
the charter commission, planning commission, liquor commission, parks and
recreation commission, and human relations commission, must convene no later than
the first full week of June in years of a municipal election in which one or more
members of the city council are elected, for the purpose of reviewing the
salaries of the mayor and council. At their first meeting, the committee must
name one of its members as chairperson. Members of the council may not serve on
the committee. If the chairperson of a commission is ineligible or.unwilling to
serve on the committee, the commission may designate another member of the
commission to serve on the committee. A majority of the members is necessary to
conduct business. The committee must recommend no later than August 1 of the
same year to the council that the salaries of the mayor and council members
either remain the same or be changed to some specified amount in the manner
prescribed by law.-
205.09. Workers' comoensation. Pursuant to Minnesota Statutes, chapter 176, the
elected officials of the city, the Robbinsdale Economic Development Aut::ority
(REDA), and those municipal officers appointed for a regular term of office are
included in the coverage of the Minnesota Workers' compensation Act. (Amended,
Ord. No. 91-15, sec. 1)
10; 16/ 92 09 : 17
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I.
FAX 61:2 S95 4404 (;try O B-N I LLE
~ * / ~)Uf n3V_J L_~_
~7 0 01
POLICY NUMBER- 1.160
MAYOR AND COUNCILMEMBER SALARIES
NEED FOR POLICY
The Community is entitled to a clearly articulated, written de-
scription of the process for establishing the salaries-of local
elected officials.
II. POLICY
1. Service on the City Council is a civic obligation and an
honor. The salaries of the Mayor and Councilmembers should
therefore not encourage candidacies based on monetary rather
than public service objectives;
2. It is in the best interest of the community that excellent
candidates seek and be available for local elected offices.
Salaries should not operate as a disincentive and elected
officials should not be required to subsidize participation
in public service. 2*-'
nw=aiex__- , y '
docket axj:)-_~Q
3. The propriety of the salary levels of the Mayor and Council-
members can be evaluated through comparisons with salaries
paid to similar officials within the seven county metro-
politan area;
4. The salary levels of elected officials should be regularly
reviewed and adjusted to ensure compliance with the objec-
tives -of this policy and to avoid the need for drastic or
sudden changes.
III. PROCEDURE
1. The City Manager shall annually conduct a survey of salaries
paid to elected officials of comparably sized municipalities
in the seven county metropolitan area. Surveys prepared
by the Association of Metropolitan municipalities or the
League of Minnesota Cities may be utilized in lieu of the
City Manager's survey.
2. The City Manager shall annually prepare a Policy Report that
contains an analysis of the survey information. The report
shall compute the average amounts paid to Mayors and Council-
members; correlate survey results to the current salaries
of Burnsville elected officials; and, discuss possible
budgetary impacts of indicated changes.
r
Post-It- brand fax transmittal memo 7671 B of pages
To , IFrom~ t u
Dept. ll P ono N / 41M a.
IFax N Zl( n~I ~t IFtxN C~ Lf l ~~/~I 1
{ ` ( ?C
E.12 895 4404
10/16/92 09:1 FAX 612 895 4404 CITY OF B-VILLE X002
POLICY NUMBER 1.160
PAGE TWO
3. The Mayor and City Council shall annually review the Citv
Manager's Policy Report on salaries and, if appropriate to
the purposes of this policy, may direct staff to prepare
all necessary ordinances and to provide for any required
public hearing.
4. The Mayor and City Council shall conduct two public hearings
on any proposed ordinance that would change the salary levels
of local elected officials.
5. Consistent with state law, no change in salary shall be
implemented until after the next succeeding municipal
election.
IV. RESPONSIBILITY
It shall be the responsibility of the City Manager' to annually.
survey the salaries paid elected officials in comparable 'metro-
politan area municipalities and to present those findings to
the City Council.
V. AUTHORITY
City Council Policy Setting; Minnesota State Statutes 415.11.
Submitted by
U.
Reviewed by
Connie Morrison. Mayor
0
Date 9/13/84
Date 9/13/84
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CITY Of BROOKLYN CENTER 1993 EMPLOYEE POSITION AND CLASSIFICATION PLAN
SEVERANCE BENEFITS FOR LAID OFF EMPLOYEES PROGRAM
SCHEDULE L
SEVERANCE BENEFITS
FOR LAID OFF
EMPLOYEES PROGRAM
Due to severe budget constraints, the City Council has found it necessary in some budget
years to reduce the number of City employees through lay offs. To recognize the hardship
of such lay offs, the City Council has determined it is in the best interest of the City
of Brooklyn Center to offer some severance benefits to certain employees.
Therefore, the City Council has determined to offer the Severance Benefits for Laid Off
Employees Program with the following provisions:
1. Employees qualified for severance benefits are those who are employed in a full-
time capacity as a benefits-earning employee with the City of Brooklyn Center at
the time of lay off and will not be reemployed by the City in another full-time
position. Employees participate in this program on a voluntary basis.
2. At the City's expense, qualified employees may, at their choosing, participate in
an outplacement service at a cost not to exceed $2,000 or within six months of
lay off, whichever is reached first. Outplacement services consist of a career
assessment, resume development, cover letter writing assistance, interviewing
skills, networking, and developing job resources, all of which are provided by a
professionally qualified outplacement service.
3. The qualified employees will be allowed to continue health and life insurance
coverage held at the time of lay off pursuant to COBRA law. The City will pay
the portion of the premium costs for which other City employees are eligible for
a period of three months after the lay off date or earlier if other coverage is
provided by another employer.
4. In addition to any other severance pay to which the qualified employee is
entitled, severance pay equal to two (2) weeks salary shall be paid to qualified
employees who have been employed by the City less than ten (10) years; and
severance pay equal to four (4) weeks salary shall be paid to qualified employees
who have been employed full-time by the City for ten (10) or more years.
5. The City Manager is authorized to administer the Severance Benefits for Laid Off
Employees Program and to fund this program from the City of Brooklyn Center's
Employees' Retirement Fund until such funds are depleted, at which time the
program will be funded from the General Fund.
6. In the event that the City discontinues providing group health insurance coverage
for active employees or in the event that the City discontinue this program, all
benefits provided for in provision three (3) above paid for by the City will also
be discontinued.
-24-
N
City of Brooklyn Center, Minnesota
GENERAL FUND
The City of Brooklyn Center Home Rule Charter provides in section
7.11 that "there shall be maintained in the City Treasury a
classification of Funds which shall provide for a General Fund for
the payment of such expenses of the City as the Council may deem
proper, and such other funds as may be required by statute,
ordinance or resolution".
The General Fund was established to account for all revenues and
expenditures which are not required to be accounted for in other
funds. It has more diverse revenue sources than other funds.
These revenue sources include property taxes, licenses, permits,
fines and forfeits, intergovernmental, service charges, rents, and
investment earnings. The Fund's resources finance a wide range of
functions, including the current operations of general government,
public safety, public works, health and welfare, recreation, and
non-departmental expenditures.
This Fund utilizes the modified accrual basis of accounting.
Revenues are recognized in the accounting period in which they
become available and measurable. Expenditures are recognized in
the accounting period in which the related liability is incurred.
The audited fund balance as of December 31, 1991 was $5,108,575.
This is $827,955 less than the amount recommended by the City's
adequate fund balance formula.
•
1
City of Brooklyn Center, Minnesota
40 SPECIAL REVENUE FUNDS
The Special Revenue Funds are established to account for revenues
derived from taxes and/or other specific revenue sources. These
resources are usually restricted by statute, City Charter or ordinance
to finance specific city functions or activities.
This fund type utilizes the modified accrual basis of accounting.
Revenues are recognized in the accounting period in which they become
available and measurable. Expenditures are recognized in the
accounting period in which the related liability is incurred.
Earle Brown Farm Tax Increment Financina District: This fund has the
authority to collect tax increments which are used for the historic
restoration of the Earle Brown Farm and for debt service payments of
bonds which also issued for that purpose.
The audited fund balance as of December 31, 1991 was a negative
$2,441,219. This balance is the result of past financing of the
construction and operation of the Earle Brown Heritage Center.
Present uses of these funds include transfers to the Earle Brown
Heritage Center to cover operating deficits and transfers to debt
service funds to make the principal and interest payments on the Tax
Increment Bonds of 1985 and 1992-. The operating subsidies of the
Heritage Center need to be discontinued because this District only has
enough resources for the debt service payments.
Diseased Tree Removal Fund: This Fund was established to account for
the collection of resources and expenditure of these resources for
diseased tree control. Costs are reimbursed by private property
owners, or the City, depending upon where the tree was located.
The audited fund balance as of December 31, 1991 was $21,449. A
sufficient fund balance must be maintained to finance the cost of
trees which are removed from private property and special assessed to
the homeowner. These special assessments are repaid over periods of
three or five years. The current fund balance is adequate for this
purpose.
Communitv Development Block Grant Fund: The Fund was established to
account for funds received under Title I of the Housing and Community
Development Act of 1974. Transfers are made from this Fund to the
Economic Development Authority Fund where accounting for project costs
takes place.
The fund has a zero fund balance since no expenditures are made from
this fund and transfers to other funds are only made after the
reimbursement is received from Hennepin County.
City of Brooklyn Center, Minnesota
0 DEBT SERVICE FUNDS
The Debt Service Funds were established to account for the payment
(from taxes and other resources) of interest and principal on long-
term general obligation debt.
This fund type utilizes the modified accrual basis of accounting.
Revenues are recognized in the accounting period in which they become
available and measurable. Expenditures are recognized in the
accounting period in which the principal and interest are due.
The City's Debt Service funds included in this section are:
Certificates of Indebtedness Debt Service Fund: This Fund accounts
for the property taxes raised to pay the principal and interest on
certificates of indebtedness sold to finance the purchase of capital
equipment in the General Fund. There is a zero fund balance because
the amount needed for the current year principal and interest payments
is taken from the tax settlements and the General Fund carries any
taxes receivable.
General Obligation State Aid Street Bonds Debt Service: This Fund
accounts for payment of principal and interest on bonds issued in 1991
to finance a comprehensive improvement and upgrading 69th Avenue North
as a state aid route. There is a zero fund balance because the amount
needed for the current year principal and interest payments is
transferred in from the Municipal State Aid Construction Fund.
Park Bonds of 1980 Debt Service Fund: This Fund was established to
account for the accumulation of resources for payment of principal and
interest on general obligation bonds authorized by the electorate in
1980 to finance the improvement and equipping of parks, park lands and
related public recreational facilities. These improvements include
neighborhood parks, Central Park, Palmer Nature Center, Shingle Creek
Trailway and the Arboretum.
The audited fund balance as of December 31, 1991 was $486,205. The
final debt service payment on this issue will be made on February 1,
1993. Any surplus funds remaining after that time will be transferred
to the Certificates of Indebtedness Debt Service Fund.
General Obligation Tax Increment Bonds of 1983 Fund: This Fund
accounts for the accumulation of resources for payment of principal
and interest on general obligation bonds issued in 1983 to finance
purchase of land and installation of utilities for housing for the
elderly.
The audited fund balance as of December 311 1991 was $802,309. The
final debt service payment on this issue was made on February 1, 1992.
Surplus funds remaining at that time were transferred to the General
Obligation Tax Increment Bonds of 1985 Debt Service Fund.
•
Debt Service Funds. continued
General Obliaation Tax Increment Bonds of 1985 Fund: This Fund was
established to account for the accumulation of resources for payment
of principal and interest on general obligation bonds issued in 1985
to finance the purchase and redevelopment of the historic Earle Brown
Farm in Brooklyn Center.
•
The audited fund balance as of December 31, 1991 was $504,575.
Primary revenue for this fund is a transfer from the Earle Brown Tax
Increment District. Sufficient funds are transferred at the end of
each year to meet the next year's principal and interest payments.
This is necessary because the first and larger P & I payment is due
on February 1 but the first property tax settlement isn't received
until July.
General Obliaation Tax Increment Bonds of 1991 Fund: This Fund was
established to account for the accumulation of resources for payment
of principal and interest on general obligation bonds issued in 1991
to reimburse the Earle Brown Tax Increment District for the cost of
restoration of the historic Earle Brown Farm in Brooklyn Center.
The audited fund balance as of December 31, 1991 was $614,269.
Primary revenue for this fund is a transfer from the Earle Brown Tax
Increment District. Sufficient funds are transferred at the end of
each year to meet the next year's principal and interest payments.
This is necessary because the first and larger P & I payment is due
on February 1 but the first property tax settlement isn't received
until July.
Improvement Bond Funds: This fund accounts for the collection of
special assessments for the payment of principal and interest on
general obligation bonds of 1976. Final debt service payments on
these bonds were made in 1991. The fund was closed and remaining
surplus was transferred to the Refunding bonds of 1987 Fund.
Refundina Bonds of 1987 Fund: This fund was established to account
for the collection of special assessments for the payment of principal
and interest on general obligation bonds. The bonds were sold during
1987 to refund Improvement Bonds of 1982.
The audited fund balance as of December 31, 1991 was $1,227,520.
Bonds outstanding as of December 31, 1991 were $530,000. The excess
funds are the result of special assessment prepayments, high interest
earnings during the 1980s, and the transfer from the Bonds of 1976.
•
•
City of Brooklyn Center, Minnesota
CAPITAL PROJECTS FUNDS
The Capital Projects Funds are established to account for all
resources used for the construction or acquisition of capital
facilities by the City except those financed by Enterprise Funds.
Construction activity can increase or decrease drastically from one
year to the next. By separating these construction projects in their
own funds, we avoid distorting year to year comparisons in the other
operating funds.
This fund type utilizes the modified accrual basis of accounting.
Revenues are recognized in the accounting period in which they become
available and measurable. Expenditures are recognized in the
accounting period in which the related liability is incurred.
The City's Capital Projects Funds included in this section are:
Capital Improvements Fund: This Fund was established in 1968 to
provide funds, and to account for the expenditure of such funds, for
major capital outlays including, but not be limited to, construction
or acquisition of major permanent facilities having a relatively long
life; and/or to reduce debt incurred for capital outlays. The
financing sources of the Fund include ad valorem taxation, transfers
from other Funds, issuance of bonds, federal and state grants, and
investment earnings.
The audited fund balance as of December 31, 1991 was $6,936,183. Of
this, $1,336,895 was reserved for loans to other funds and is
therefore not currently available, and $223,951 was appropriated by
past City Council action for the cable TV settlement. The remainder
of $5,375,337 is available.
Municinal State Aid for Construction Fund: This Fund was established
to account for the state allotment of gasoline tax collections used
for transportation related construction projects.
The audited fund balance as of December 31, 1991 was $6,313,687. Of
this, $593,069 was reserved for loans to other funds and is therefore
not currently available, $2,062,073 is bond proceeds which are
committed to the 69th Avenue project, and $918,700 is surpluses from
past M.S.A. projects which is limited to use as local share on future
M.S.A. Projects. The remainder of $2,739,845 is available for road
construction projects related to the State Aid Street system.
0
Canital Proiects Funds. continued
Special Assessment Construction Fund: This Fund was established to
account for the resources and expenditures required for the
acquisition and construction of capital facilities or improvements
financed wholly or in part by special assessments levied against
benefitted properties.
The audited fund balance as of December 31, 1991 was a negative
$1,458,920. This is the result of governmental accounting rules which
don't allow us to recognize special assessments as revenue until they
have been collected. If these assessments could be recognized, the
fund balance would be near zero. Since this fund is to be reimbursed
for all projects by either special assessments or transfers from other
funds, it doesn't need a significant fund balance.
Housina and Redevelopment Fund (H.R.A.): This fund has authority to
levy an ad valorem property tax for the purpose of conducting housing
and redevelopment projects. These projects are now done in the E . D. A.
Fund. The fund has a zero fund balance since no expenditures are made
from it and all tax proceeds are transferred to E.D.A. upon their
receipt.
Economic Development Authoritv Fund: This Fund was established to
account for the Economic Development Authority (E.D.A.) of Brooklyn
Center. The E.D.A. carries out activities which previously were done
by the H.R.A., plus it has authority to operate an enterprise. The
Earle Brown Heritage Center operates under this authority and a
is statement of its operations can be found in the enterprise fund
section of this report. The E.D.A. also does redevelopment and
housing projects, funded by transfers from the C.D.B.G. and H.R.A.
funds. A property tax will be levied directly for the E.D.A. for the
first time in 1993.
The audited fund balance as of December 31, 1991 was $1,989,915. Of
this, $1,000,000 is reserved by City Council action in a Dedicated
Housing Account, the principal of which is not to be touched, and the
interest earnings expended only on housing programs. The remaining
$989,915 is available for operations.
0
City of Brooklyn Center, Minnesota
0 ENTERPRISE FUNDS
The Enterprise Funds were established to account for the financing of
self supporting activities of the City which render services on a user
charge basis to the general public.
Revenues and expenses in these Funds are recognized on the accrual
basis of accounting. Revenues are recognized in the accounting period
in which they are earned and become objectively measurable. Expenses
are recognized in the period incurred, if objectively measurable.
Equity is these funds is described by the term Retained Earnings
rather than the term Fund Balance which was used in the governmental
type funds. Because there are often large inventories and fixed
assets in enterprise funds, they need correspondingly large retained
earnings. These assets are needed for operations and can't be
converted to cash without going out of business.
The City's Enterprise Funds included in this section are:
Municipal Liauor Fund: This Fund accounts for the operations of the
City's three municipal off-sale liquor stores. The audited retained
earnings as of December 31, 1991 was $310,336.
Golf Course Fund: This fund accounts for operations of Centerbrook
Golf Course, a 9 hole, par 3 course owned by the City. The audited
retained earnings as of December 31, 1991 was a negative $10,946. The
course experienced losses during its first two years of operations but
has recorded profits since then.
Earle Brown Heritage Center: This fund accounts for the operation of
a pioneer farmstead which has been historically preserved and restored
as a modern multipurpose facility. Its convention center can host
conferences, trade shows, and concerts seating 1,000 people in either
banquet or theater style. The "Inn On The Farm" is a bed and
breakfast with eleven rooms available to complement convention
activities or be rented individually. Several of the barns have been
restored as unique office settings which have found a niche in the
market.
The audited retained earnings as of December 31, 1991 was $19. The
center is operating at a loss and just enough of an operating subsidy
is being transferred in from the Earle Brown Tax Increment District
to cover the loss.
9
Enterprise Funds. continued
Recvclina and Refuse Fund: This fund accounts for the operation of
a state mandated recycling program. Expansion into refuse collection
will take place only when there is a clear advantage to be achieved
by it. The audited retained earnings as of December 31, 1991 was
$72,530.
Water Utilities Fund: This Fund accounts for the provision of water
to customers. Administration, wells, water storage, and distribution
are included.
The audited retained earnings as of December 31, 1991 was $8,123,416.
Of this, $3,700,000 is reserved by past City Council action for future
expansion of the water system to meet Federal safe water standards.
Sanitarv Sewer Fund: This Fund accounts for the collection and pumping
of sanitary sewage through a system of sewer lines and lift stations.
Sewage is treated by the Metropolitan Waste Control Commission whose
fees represent about 75% of this fund's expenses.
The audited retained earnings as of December 31, 1991 was $2,892,227.
Of this, $300,000 is reserved by past City Council action for future
expansion of the sanitary sewer system.
Storm Drainage Fund: This Fund accounts for the operations and
improvements of the storm water drainage system. It incorporates not
only the storm sewer system, but also water structures such as holding
ponds and facilities to improve water quality. Fees are based upon
the amount of water running off a property and vary with both size and
absorption characteristics of the parcel. The audited retained
earnings as of December 31, 1991 was $194,006.
0
City of Brooklyn Center, Minnesota
0 INTERNAL SERVICE FUNDS
Internal Service Funds are used to account, on a cost reimbursement
basis, for the financing of goods or services provided by one
department to other departments of the City.
Revenues and expenses in these funds are recognized on the accrual
basis of accounting. Revenues are recognized in the accounting period
in which they are earned and become measurable. Expenditures are
recognized in the accounting period in which they are incurred.
Public Emplovees Retirement Fund: This fund provides certain health
care insurance benefits for City employees who retire before age 65.
Substantially all of the City's full time employees may be eligible
for those benefits from the time they qualify for an unreduced PERA
pension until they reach age 65 or become eligible for medicare.
Currently investment earnings are sufficient to provide benefits. In
the event that future costs would exceed earnings, other funds would
be charged for the costs associated with their employees. The City
Council in 1992 also directed that this fund be charged for severance
benefits to employees who have been laid off.
The audited retained earnings as of December 31, 1991 was $764,319.
•
9
MEMORANDUM
TO: Brooklyn Center Financial Commission Members
FROM: Gerald G. Splinter, City Manager 5~?/
DATE: January 29, 1993
SUBJECT: COUNCIL INPUT-ORGANIZATIONAL ANALYSIS
I recently asked the city council to submit to me questions or issues they believe
the financial commission should address as a part of their upcoming
organizational analysis work.
The following are questions I have accumulated to date from members of the
city council, and I understand there will be more to come.
1. Is there any potential to consolidate departments and save money.
2. Is there money to be saved by buying leased or demonstrator-type
equipment rather than purchasing new equipment.
3. Are there any services which can be done more effectively or
economically by combining with other communities or other agencies.
4. Evaluate the potential for contracting out City services (privatization).
5. Evaluate repair of vehicles to extend their life rather than purchasing new.
6. Evaluate the cost of running the community center and analyze the
question whether or not we are pricing ourselves out of the market.
1050 Commonwealth Avenue
on. M assachuwu% 0?_' 15
Wle, phone e 61712-32-x(180
EDITORIAL
ADVISORY BOARD
Thomas Atwood
Founder & Chairman
Object Design, Inc.
Professor Soren Bisgaard
Center for Quahn' and
Productivity Inrprorement
University of Wisconsin -Madison
John Carter
Principal
Product Development
Consulting
Kenneth Crow
President
DRM Associates
F.E. DeVol
Manaeer, (retiredl
Technical Planning
and Support
NCR Corporation
Saadv Munro
Presidenr
Munro & Associates
Robert J. OsterhoR
Xerox Corporation
Senior Examiner
aleolm Baldrige
Tonal Quality Award
ony Poletto
DFA Specialist
Xerox Corporation
Professor Friedrich Prinz
Director. DFM Lab
Carnegie Mellon University
Ray Reicbenbach
Operations Manager
IBM
Art Schneiderman
Vice President
Quality & Productivity
Improvement
Analog Devices
Shin Taguchi
Director
American Supplier Institute
Dr. Emory Zimmers
CIM Lab
Lehigh University
0
January 11, 1993
Mr.Gerald G. Splinter
City Manager
6301 Shingle Creek Parkway
Brooklyn Center, MN 55430
Dear Mr. Splinter:
Thank you for your letter requesting information on competitive benchmarking and
performance measurements. I have a "good news bad news" response. First, the
good news: A) We have recently published a guidebook on benchmarking that can aid
you and your benchmarking team, a brochure describing the guide is enclosed. B) We
maintain The Benchmarking Network Service which is used by organizations seeking
benchmarking partners, a brief description and form is enclosed.
Now, for the bad news: Our focus and all of our information is manufacturing
oriented. We do not have specific public sector information. However, benchmarking
techniques will be identical for public and private sector teams, and issues of
importance will be similar for both. Thus the Executive Benchmarking Guidebook can
serve as an excellent resource. Also, it is possible that members of the Benchmarking
Network are involved in community quality efforts and can provide you with
information- and/or benchmarking partners.
Two other avenues of possible information are: The World Center for Community
Excellence, Erie, PA (814)456-9223, and Mark Braun, Personnel Research Associate,
Boston University, 25 Buick St., Boston, MA 02215. Mr. Braun is a former student
of mine who is involved in the community quality movement.
Sincerely,
Charles Atkinson
Vice President, Operations
enclosures
. A Benchmarking Network Service is being formed by Management Roundtable to
help U.S. manufacturing organizations find partners to compare and share
information about manufacturing and management practices.
This is a non-obligatory service; Management Roundtable is coordinating this
database to support its customers' interests in benchmarking.
A directory of participants will be compiled from the information received; prior
to it's publication, you may call us for benchmarking partner recommendations.
Management Roundtable has also created a listing of benchmarking consultants.
If you are interested in this resource, please call us.
❑ YES, please enter my name into the Benchmarking Network Service database. I
understand that this information will be used to help this service locate
potential partners for its clients.
• Company
Contact
Title
Address
City
Phone
Industry
Company Size
Sales Volume
State Zip
FAX:
Signature
We'd like to benchmark the following:
We're very good in this area:
• • Benchmarking Network Service • c/o Management Roundtable, Inc. •
• 1050 Commonwealth Avenue • Boston, MA 02215 • Phone: (617)232-8080 •
• FAX (617)232-0879 •
•
Features:
How to get started, choose the team, choose partners, identify the topics best suited for
benchmarking ❖ How to set targets, create baselines, analyze data ❖ How to conduct a
site visit How to apply findings ❖ Case examples, metrics, illustrations, tables, sample
worksheets ❖ Dozens of fully reproducible master sheets ❖ Definition of terms, list of
resources ❖ Example correspondence to prospective partners ❖ Complete set of tools to
create your own action plan ❖ Designed for use by the entire team
'The truly excellent companies use benchmarking
as a catalyst and enabler of change Managers begin
with a business need, identify precisely what needs to be
benchmarked, target the company that is best-in-class,
conduct the benchmarking visit, and then incorporate
their findings directly into the planning process."'
Harvard Business Review
Nov7Dee 1991
aL'
Published by The Management Roundtable, Inc.
t t G411AILWIlliff4l
1. Before You Start
Benchmarking--A Brief History
Definitions
Benchmarking In A Nutshell
Your Benefits and Paybacks
Your Partner's Benefits
BenchnuAdng Solutions To Common Business Problems
Benchmarking And Continuous Improvement
How Long Does A Benchmarking Study Take?
Benchmarking Teams
Don't Worry, Benchmarking Is Fun!
2. Getting Started
Applications
Sensitive Issues
What Is Benchmarked?
Metrics And Partners
A Quick Overview Before Starting
Preparing To Start
Finding The User And Getting Commitment
3. Selecting Team Members
How Groups Work
Consensus
Effective Teams
Requirements For Team Members
Broad Issues Handled
Team Tasks
Typical Team Size
Guidelines For Choosing Team Members
Selecting The Team
4. Selecting Topics
Approaches To Topic Selection
Overview-Selecting Topics
Analyzing Your Company
Topic Meeting
The Structured Method
Typical Questions
Choosing Metrics
What Are Metrics Used For?
What Are Metrics?
Defining The Terms Of Each Metric
Metric Applications
Characteristics Of A Good Metric
Triangulation
Caution!
An Example Of Typical Metrics
Summary
6. Surveys
Survey Or Interview?
Surveys
Mail Surveys
How Many People To Contact
7. Interviews
12. Setting Up Visits By Referral
Selection
Site Visit By Referral
Preparation
Contacting Referrals
Interviews
Setting Up Site Visits By Survey
Consolidation
13. The Site Visit
Interview Structure
Data-Collection Techniques For Benchmarking
Planning
Final Comment: The Golden Rule
Preparation
Pre-Visit Meeting
8. Phone
The Benchmarking Visit
Phones And Benchmarking
Post-Visit Meeting
Script
12. Following The Visit
Vocal Skills
Telephone Skills
Completing The Benchmarking
Results You Can Expect
Continuing Relationships
Continuous Improvement
Tactics
9. Presentations
Appendix 1:
What Are Your Objectives?
A Sample Of Best Companies
Organizing A Presentation
Appendix 2:
Developing A Presentation
Techniques for Data Presentation
Presentation Technique
Visuals
Preparing For Difficult Questions
10. Baselining
Baseline Objectives
Baseline Program Plan
Baseline Team
Data Collection
Baseline Report
Baseline Workshop
11. Choosing Candidates
Finding Candidates
Considerations For Choosing Partners
Preparation
Identifying Benchmarking Candidates By Referral
Identifying Prospects By Survey
List Of Candidates i
::cam
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aa?~-~ , ~y l W M
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s.rs .
0
• Over 250 pages in a handsome 3-ring binder-includes charts, matrices,
data collection, references, definitions and ratios.
• May be used in "modules," with each chapter as a stand-alone unit.
Bpnchmarking is a means of establishing how much improvement is necessary to reach world-class levels ofperformancc
It is the continuous process of measuring products, services, and practices against the toughest competitor or those companies
recognized as industry leaders " David Kearns, CEO, Xerox
• By reading and following the steps described in the Guidebook, you will learn:
1. How to conduct a complete benchmark study.
How this will enable your organization to improve its performance in areas most essential to competitiveness.
2. How to quantify processes, operations, and strategies.
How to, set targets that are realistic- yet ambitious enough to encourage breakthrough thinking.
3. Why benchmarking is not imitation, as is sometimes thought, but rather a means to achieving innovation.
4 To identify the specific criteria your organization should benchmark.
How to choose the benchmarking team and team leader.
How to run team meetings and maximize the outcome.
G Who the most suitable benchmark partners are likely to be.
How to approach them, follow up with them, and share information with them.
How to obtain access to best-in-class companies.
7. What topics to discuss. What topics to avoid. How to protect sensitive information.
8. How to understand and apply metrics. Why "good" metrics can lead to new, successful practices while other
metrics are a waste of time. How to tell the difference.
o~
11. The "etiquette" of a site visit. What role do you play? How to
ensure that both parties come away with valuable leaming and the
foundation for an ongoing relationship.
12. How to develop an action plan based on benchmarking results.
13. How to implement best practices and the continuation of self-
assessment and improvement.
9. When to use surveys. How to create them. How to conduct interviews.
10. What data you need to develop an effective strategy. How to collect and
analyze data. About data reduction techniques. How to create a baseline.
lr
14
14 How to use benchmarking to achieve and maintain world-
class levels of performance.
15. What your expectations should realistically be. How much
time, expense and effort should you invest? What is the
ideal scope of your benchmarking activity?
• includes packet of fully reproducible masters and templates for
conducting your own benchmark studies.
AVOW 1
Charles E. Bosomworth is principal and founder of Technical Management, a consulting group specializing in new product
development. He has pioneered the concept of concurrency in product development for over twenty five years. His depth
experience in R&D, marketing, manufacturing, and quality with both functional management and program management r
bilities provide him a unique insight into the conflicting forces of new product development.
Before founding Technical Management in 1982, Mr. Bosomworth had management responsibility for a wide range of techni.
cal areas including audio, RF, microwave, thin film, thick film, optical and automation. He has been engaged in the consumer,
aerospace/defense, and industrial industries. Among the companies he has consulted to are Data Card, Bose, Keithley, MKS,
Optical Filter Corp., Radar Technology, and LEL. Mr. Bosomworth was also Director of Quality Assurance and Reliability at
Varian Associates.
Mr. Bosomworth received his BS in Physics from Adelphi University. Mr. Bosomworth is the former Director of the Science
and Engineering Group of the Boston Computer Society and has been an invited speaker at numerous professional meetings.
Management Roundtable (MRT) was established in 1980 to provide information, research, and problem-solving opportunities
necessary to manufacturing competitiveness. The focus of MRT activities is on the combined use of technology and management
practices to achieve overall business success.
Management Roundtable's bi-annual conference on Competitive Benchmarking and Performance Measurements has become
the leading forum on this topic for manufacturing firms. Additionally, MRT conducts annual benchmarking surveys of product
development practices and maintains a liaison service to match companies with prospective benchmark partners.
Other executive reports, videotapes, newsletters and conferences offered by Management Roundtable provide unbiased inform.
tion on topics such as Concurrent Engineering, Manufacturing Leadership, Design for Manufacturability, Product Data Manage-
ment, Time-Based Competition, Rapid Prototyping, and more.
I ~ ~ r
The Executive Benchmarking Guidebook
This 250+ page, looseleaf--bound volume is available at a special introductory price of $295 ($395 after November 25, 1992).
Additional copies are available at $100 each. Please call 800/338-2223 for information on special corporate training rates or for
ordering more than ten copies.
0 YES! Please send me _ copy(ies) of THE EXECUTIVE BENCHMARKING GUIDEBOOK at the special introductory
price of $295 for the first copy and $100 for each additional copy. Multiple copies must be sent to one shipping destination and
require an additional $20 total for UPS shipping. Outside US and Canada, please add $50 for shipping and handling. Overnight
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•
CODE: 3
A V
Best Practices:
Executive Briefing on
Benchmarking and Performance Metrics
0
by
Peter Marks
for
Management Roundtable
•
Peter Marks
Managing Director, Design Insight
336 Village Lane
P.O. Box 37
Los Gatos, CA 95031
Peter Marks is the Managing Director of Design Insight. Known for his expertise in
computer aided design, manufacturing, and information technology, he has helped more
than one hundred companies in the U.S., Europe and Pacific Rim to improve their
competitive positions.
Prior to Mr. Marks' present position, he has had experience in every discipline from
product planning and design to manufacturing engineering, quality assurance and
operations.
Mr. Marks earned his B.S. and M.S. degrees with highest honors from the University •
of Cincinnati.
•
page 2
Executive Briefing on Benchmarking
e
•
•
® Peter Marks, DESIGN INSIGHT, 1992.
Benchmarking is a discipline of "good study habits" aimed at improving your competitive
position. The two main kinds of benchmarking are product benchmarking and process
benchmarking, though we can also benchmark company culture, manufacturing
infrastructure, and national policy. Benchmarking means learning best practices, not in
an academic setting, but by studying outstanding practitioners.
Who is involved? Benchmarking should be done by a team of people who can and will
implement the results. It is not a staff activity. Your benchmarking team will have
greatest success working peer-to-peer with benchmarking partners.
What is the goal? Benchmarking may be aimed at several levels; most commonly of
competitive products and equivalent processes. The objective is not to learn
benchmarking, or even conduct the study; but to learn and apply best practices. Aim to
make a difference. One common pitfall: selecting benchmarking topics and partners that
are convenient; rather than critical to your success. Another common pitfall: getting so
wrapped up in the process and the "official" way to do things, that implementation lags.
When should we begin? Benchmarking can begin when you have the nucleus of a
committed team. Management support and education courses can help seed the process.
Recognize that benchmarking is not a quick fix. Team members will need to spend
several hours per week over months; to make a difference.
Executive Briefing on Benchmarking Tutorial Notes O Peter Marts, Design Insight page 3
Where is benchmarking done? Benchmarking starts in your own facility. You need to
understand your own products and processes first. Then, information from other
companies comes by researching (on paper) and then visiting (in person) their facilities.
Recognize that preparation is required to prior to site visits. Without adequate
preparation, teams get a fraction of the benefits.
Why should we study best-of-class practitioners? Every company can benefit from
taking the blinders off, questioning assumptions, and learning how other successful
companies conduct their business. Four specific learning objectives you can meet
through benchmarking are:
1) Motivation for change - Sometimes the only way to shake a complacent
culture (POW!) is to show that better products and processes are possible.
For many companies, this will be the highest payback in benchmarking.
2) Best practices and "how to" ideas - Benchmarking the best of directly
comparable products or processes usually reveals immediately useful (HOW
to) ideas.
3) Stimulus for innovation and improvement- Benchmarking analogous
products and processes can stimulate thinking (WOW!). What might a
manufacturing service company learn from Walt Disney World? While the
products and processes may not be the same, innovation can be inspired by
thoughtful comparison with other companies.
4) Metrics, quantitative goals - Teams need goals to track and motivate
improvement. How are we doing NOW? The idea of scribing a "bench
mark" is to set a standard, proven feasible in practice, against which we
measure our work. A benchmark is like a world record in the high jump - a
tangible goal we hope to approach and then surpass.
I suggest the four ow's, POW!, HOW?, WOW! and NOW, as a shortcut to keep these
four learning objectives in mind. Your specific goals will guide your choice of
benchmarking topics, partners, study methods, and actions.
•
•
Executive Briefing on Benchmarking Tutorial Notes 0 Peter Marks, fksign Insight page 4
HOw is benchmarking conducted? This is a longer-than-a-paragraph story; the focus of
our tutorial.
e
❑ About one third of the work is to get your team up and running; and learn
some useful methods for analyzing your own and partner's operations.
Depending upon the focus, these tools might include Fish-bone Diagrams,
Pareto charts, Gantt charts, Quality Function Deployment, Product
$APPEALS, Voice of the Customer, Design of Experiments, and others.
Start with simple tools and concentrate on building an effective team.
❑ Another one third of the work is to understand your own products and
processes - and select a focus for external benchmarking that will make a big
difference. Avoid the temptation to short circuit this step.
Think of this step as "prospecting" to find high payback areas to benchmark
and improve. A special focus of our tutorial will be learning tools, like the
$APPEALS method, to set your program up for success.
❑ The next third is to prepare for and conduct the external benchmarking -
studies. Significant effort is required here; and is relatively well covered in
resources such as Robert Camp's Benchmarking book (Quality Press, 1989).
•
Many teams worry about finding appropriate partners. Interest in
benchmarking is making it easier to find good partners; through conferences,
courses, and databases. These include the CASA/SME's Autofact
Conference sessions on benchmarking; AME's (Association for
Manufacturing Excellence) on-site conference programs, the emerging APQC
(American Productivity and Quality Center) benchmarking clearinghouse, and
the Management Roundtable's (Boston) benchmarking conferences. See the
References, attached, for more sources.
Perhaps the most overlooked step in external benchmarking is planning to get
the most from a site visit; knowing what to look for, how to ask questions,
and how to divide up the work.
❑ The fourth third - yes, benchmarking seems to require 133% effort - is to
capture the lessons learned and put them to work. Fortunately, the people
involved from the beginning (Who are now able to apply best practices
during the normal course of their work - and will soon reap the rewards.
•
How much is good enough? Good metrics (measures of
performance) aim best intentions toward best results. Most companies
have at least partially-flawed measurement systems. They measure and
motivate the wrong things. Our old labor-based costing systems and
today's move toward activity-based costing is one example. Teams
must very carefully select right measures. It often pays to enlist the
help of at least one enlightened metrics expert on the team.
Executive Bring on Benchmarking Tutorial Notes 0 Peter Marks. Design Insight
4
I
F
page 5
r
HiStory. Mention benchmarking - and companies like Cadillac, Harley-Davidson, i
Motorola, and especially Xerox - come to mind. These companies came back from
declining market shares; by learning the lessons of product and process improvement.
They credit benchmarking as a tool that motivated change - and helped show the way.
My first exposure to the term "benchmarking" was visiting Japan at the invitation of the
Japan Management Association in 1982 - and meeting with Yotaro Kobayashi, the
impressive head of Fuji Xerox, and the man who taught Xerox benchmarking. Yet, the
search for best practices has a much longer history, back to the craft guilds, with
apprentices learning best practices from master craftsmen.
So, what about the recent enthusiasm for benchmarking? Is it a passing fad? Or, is it
here to stay? Many have jumped on a benchmarking bandwagon that will not endure.
Still, a disciplined effort to learn and apply best practices has been the key to
manufacturing success for decades in the U.S., Japan, German worldwide. This
will endure. Think of benchmarking as a deeply ingrained habit - a continual search for
best practices. As for the hoopla about benchmarking, leverage it to good effect. It
helps gain management commitment, makes it easier to find willing benchmarking
partners, and enlivens teamwork.
or May best practices be with you!
•
•
Executive Briefing on Benchmarking Tutorial Notes 0 Pear Marks, Design Insight page 6
M
Selected Resources
0 To see your products through your customers' eyes:
Defining Great Products, Peter Marks, available from Management Roundtable
(800-338-2223), 1991. The best way to begin benchmarking is often see your
products through the customers' eyes, to understand their competitive purchase
decision, and "reverse engineer" your sucess factors. Customer priorities should
determine your product and process priorities.
To get a baseline for your own processes:
Benchmarking Product Development Practices, John Carter, also available from
Management Roundtable (above telephone), 1990-1992. A baseline survey of
product development practices. Consider, also, information on simple and direct
approaches to process mapping; such as Digital Equipment's AAT or Hewlett
Packard's Return Map. Copies of ISO 9040 or Baldrige Award criteria may be
useful (though, possibly a time sink for most teams).
To get a baseline on your own organization and culture:
Strategies of the Best in Qass, Peter Marks, Design Insight (408-395-4001),
1992. Twelve best practices identified in a study of 30 manufacturing companies
with top market share, top quality ratings, and top profits. Consider, also,
Corporate Culture and Performance, John Kotter and James Heskett, The Free
Press, 1992, for background reading.
For an overview of some useful tools for teams:
A wide variety of useful publications are available, especially from ASQC Quality
Press, the HE (Industrial Engineers), the Productivity Press, and SME. See, for
example, Kaoru Ishikawa's book on Quality Tools (Productivity Press). Your
human resource or training department may have useful resources on team-
building and profiling team member strengths and personality types.
For an overview of benchmarking methods:
The original book in the field is, Benchmarking, Robert Camp, ASQC Quality
Press, Milwaukee, 1989. Also, check the special January 1992, "Future View,"
and March 1992, "Benchmarking World-Class Manufacturing," issues of
Manufacturing Engineering magazine (SME, Dearborn, MI, 313-271-1500).
Management Roundtable (617-232-8080) also publishes the Executive
Benchmarking Guidebook.
Note: the above material is covered in the Design Insight Benchmarking Course.
•
Executive Briefing on Benchmarking Tutorial Notes 0 Peter Marts, Design Insight page 7
Y
Fifteen sources for potential partners: •
Remember that benchmarking means value given for value received; like swapping
trading cards. You are not stealing information, but trading it. The reception you
receive to an invitation, "let's benchmark," will hinge on your partners's evaluation of
what-do-I-and-we-get-for-spending-some-time-with-these-people. Here are 15 sources for
potential partners:
1) Consider your personal contacts first. You and your team have thousands of
colleagues, business cards, professional and trade association contacts. Ask your
friends. A personal contact, at least a friend-of-a-friend-of-a-friend reference, is
the best introduction to a prospective partner.
2) Start a clip file of sources on best practices. Business Week, The Economist,
Forbes, Fortune, and the Wall Street Journal are good sources. Don't forget
industry-specific sources (e.g., Aviation Week and Space Technology or Machine
Design), interest-specific sources (Computer Aided Engineering, Managing
Automation), and association newsletters (e.g. IEEE Publications, Association for
Manufacturing Excellence, and SME's Manufacturing Engineering).
3) Get involved in local associations. Focused associations such as AME, the
Center for Quality Leadership or IAEPD, the International Association of
Electronic Product Developers (Westport, CT), may be active in your area.
Widen your contacts, with an eye to benchmarking. Or, bring a benchmarking
tutorial in-house.
4) Attend a benchmarking conference and meet a hundred or more like-minded
individuals who want to benchmark. (Management Roundtable offers 2-3
programs per year.
5) Make contacts through professional associations, like SME in Dearborn, MI;
trade associations, like AEA, the American Electronics Association; or AMT, the
Association for Manufacturing Technology (formerly, NMTBA, National
Machine Tool Builders Association). Search for specific associations and
contacts in the Encyclopedia of Associations, updated yearly, Gale Research
Company, Detroit, MI 48226-4094.
6) Scan the Encyclopedia of Business Information Sources, Gale Research Company,
835 Penobscot Building, Detroit, MI 48226-4094. This is a good guide to
information sources. Another Gale publication, the Market Share Reporter, 1991
and 1992 editions, is a good source to pinpoint top companies, products, and
service organizations. 0
Executive Briefing on Benehmarking Tutorial Notes C Peter Marks, Design Insight page 8
t
r
7) Use a local, business, or university library and get to know a business librarian.
Most would be an invaluable asset to your benchmarking team. In addition to
the sources in the Gale Encyclopedia, above, there are thousands of special
reports, resources, directories, market reports, and databases. Several offer
sufficient depth to supplement on-site visits. Consider, also, association libraries.
such as The Society of Manufacturing Engineers in Dearborn, Michigan.
8) Search for best practice companies, their locations, and specific contacts using
directories. There are even several directories of directories! The best known
sources on companies include Dun & Bradstreet (your accounting department
may subscribe to a D&B service) and Standard & Poor's Register of
Corporations, Directors, and Executives (New York: 212-208-8000). You might
want to call for a fax copy of individual company reports from D&B Express
Service (800-879-1362) at about $60 each. Another useful resource, more
product-oriented, is the Thomas Register. Your company probably has a copy of
both the S&P and Thomas Registers; in accounting, purchasing, or a company
library. Most libraries also have copies. Finally, various Who's Who directories
may be useful in making specific contacts.
9) Buy a copy of one or more company references for keep-to-ourselves use in
teams. These sources are may not be comprehensive; but they stimulate team
thinking. Affordable (about $25 each) and recommended sources are:
- Hoover's Handbook of American Business 1992.
- Hoover's Handbook of World Business 1992.
- Access Japan '92. Access Nippon, Inc., Tokyo.
The Hoover's Handbooks are good to stimulate thinking along the line, "what
could we learn from company?" They also include a rough overall company
grade; of some value in considering partners. All three of the above sources are
available from The Reference Press, Inc., Austin, TX (tel: 512-454-7778).
Another recommended source is:
- Everybody's Business (A Field Guide to 400 Leading Co's in America)
This source is edited by Milton Moskowitz et al; and published by Doubleday
Currency (1990).
10) Consider innovative small companies as a source of best practices. Annual
directories of "best" small companies are published by Inc. Magazine, Electronic
Business, and many others. Local business contacts (Chamber of Commerce,
etc.) may pinpoint excellent small companies with leadership in one or more
processes.
•
Executive Briefing on Benchmarking Tutorial Notes 0 Peter Marks, Design Insight page 9
4
11) Visit a good bookstore. You'll find at least 20 books in the typical business - •
section; based on best practices at specific companies; from "searching for
excellence," to describing "101 companies that profit from customer care." You
may find a source that covers your specific industry (e.g., The Machine That
Changed the World for automakers or Managing Quality for the room air
conditioning industry). A few such books have served as rallying points for
teams and their improvement efforts.
12) Tap your company contacts with market research firms (e.g., Advanced
Manufacturing Research in Cambridge, MA; ClMdata in Ann Arbor, MI;
Datapro in Delran, NJ; Dataquest in San Jose, Frost & Sullivan in NYC;
Gartner Group in Stamford, CT; Harbor Research in Boston, MA; International
Data Corporation in Framingham, MA; the Yankee Group in Boston, MA and
many others). Also consider financial and market researchers (major investment
firms like PruBache, smaller newsletters, and venture capitalists). Consider,
also, a call to educational resources, like Management Roundtable in Boston, MA
and also listed in several places, above.
13) Check for company contacts with consortia like MCC in Austin, TX or NCMS,
the National Center for Manufacturing Sciences in Ann Arbor, MI; plus
government-related information sources. One is M77AC - the Manufacturing
Technology Information Analysis Center at IIT Research Institute, Chicago, IL
(800-421-0486). MTIAC tracks Manufacturing Research Centers throughout the
U.S. (such as 177, in Ann Arbor, MI and the Iacocca Institute at Lehigh
University, Bethlehem, PA). APQC in Houston, TX (713-685-4666) is starting a
benchmarking clearinghouse; with first year membership costs ranging from a
couple thousand to $50,000 up, depending upon company size. Most Japanese
and European consortia also have some provision for international participation.
14) Ask your equipment and service vendors if they know best practice companies.
System integrators like EDS and computer companies like IBM or Digital
Equipment often have excellent contacts. Listings of top systems integrators have
been compiled annually by Systems Integration magazine (Cahners Publications),
the former Computer Systems News (CMP Publications), and Managing
Automation (Thomas Publishing Company). Similar lists exist for almost any
process from mail room equipment to quality control instrumentation. Also, ask
competent consultants known through team members or your personal network.
14) Consider an on-line data service. CompuServe includes " IQuest, an on-line
database search tool for nonlibrarians. It links to DIALOG Information Services
(Palo Alto: 415-858-2700, 800-334-2564; about 350 databases), BRS Information
Technologies (McLean, VA: 703-442-0900, 800-289-4277) and a dozen other
business information vendors. CompuServe and other services (MCI, Prodigy,
etc.) also provide access to company information databases like Standard & Poors
Executive Briefing on Benchmarking Tutorial Notes 0 Peter Marks, Design Insight page 10
Online and Dun & Bradstreet. Be advised to have an idea of what you want and
how to get it - before going online. Access charges add up quickly.
15) Consider other electronic-access information resources. A variety of CD-ROMs
list businesses throughout the U.S.; starting around $100 up to $1000's. You
may have contacts through Internet or through Forums or User Groups.
Compiled & ® copyright Peter Marks, DESIGN INSIGHT, 408-395-4001, Los Gatos, CA.
Permission is granted for any benchmarking team to copy this document in its entirety.
•
Executive Briefing on Benchtnarking Tutorial Notes 0 Peter Marrs, Design Insight page 11
ABOUT THE SPONSOR
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