Strategic plan / Arizona Department of Administration

              ARIZONA DEPARTMENT OF
ADMINISTRATION
STRATEGIC PLAN
FISCAL YEARS 2004-2008
J. ELLIOTT HIBBS
DIRECTOR
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 2
ARIZONA DEPARTMENT OF ADMINISTRATION
The Arizona Department of Administration (ADOA) is comprised of the Director's Office and
eight divisions: Financial Services, General Services, Human Resources, Information Services,
Management Services, Internal Technology Services, Arizona Governor’s University and Capitol
Police. These divisions provide a range of services to state agencies such as: accounting services;
human resource services, including the administration of the state's health insurance programs;
telecommunication and mainframe services; security for the Phoenix Capitol Mall and Tucson
Office Complex; management of the state's fleet; and the administration of the state's property
and liability self-insurance program.
VISION
ADOA: A great place to work that delivers “knock-your-socks-off” service.
MISSION
To provide effective and efficient support services to enable government agencies, state
employees and the public to achieve their goals.
Our Values
Employee Focus: We care about each other, encourage personal growth and recognize
accomplishments.
Customer Focus: We strive to understand and anticipate our customers needs and
deliver services that exceed their expectations.
Quality: We provide exceptional value and vigorously pursue improvement.
Integrity: We accept personal responsibility and behave ethically.
Teamwork: We achieve our greatest success by working together.
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 3
AGENCY GOALS
• To increase customer satisfaction
• To develop a high performance workforce
• To improve organizational effectiveness and efficiency
STRATEGIC ISSUES
• Attract, Retain, and Educate Employees
• Information Technology Efficiencies
• Cost-Efficient and Effective Public Facilities
• Productivity, Cost-Effectiveness, and Customer Service
• Security and Safety
BUDGET
Funding and FTE Summary (Thousands)
FY 2002 FY 2003
Actual Estimate
General 24,789.9 23,319.3
Other Appropriated 136,284.6 169,404.4
Other Non Appropriated 434,373.5 522,370.1
Federal 241.2 212.6
Program Total............................................. 595,689.2 715,306.4
FTE Positions 1,070.5 1,020.3
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 4
Strategic Issue #1
Attract, Retain, and Develop Employees
Problem: Alarming statistics: 47.2% of new employees voluntarily leave Arizona state service
within the first year of service, and 69.4% voluntarily leave Arizona state service within 1 to 3
years of service. The state’s excessive turnover can be attributed to low starting salaries,
insufficient and sporadic pay increases, lack of development and education opportunities, a
dysfunctional position classification system, and the lack of financial support for career
development and advancement of state employees.
The financial impact of turnover is staggering, and according to the Harvard Business Review,
frequent estimates of turnover costs can span $10,000 to $40,000 per person, depending upon
their position, including search fees, training costs and more. Agencies, according to some
experts, may experience costs of up to two-and-a-half times the former employee’s salary.
Indirect costs such as loss of knowledge, breakdown in relationships with customers, and
inefficiencies in productivity must also be considered, as well as the impact on remaining
employees’ morale. In addition, employee stress caused by unmanageable workloads can create
negative work environments, service interruptions or delays, and added customer frustration,
leading to even greater problems retaining talented employees.
Clearly finding ways to attract and retain high quality staff must be a focus for Arizona State
government.
Changes in Separations from State Service by Wage and Salaried Employees 1997 - 2002
Retirements Resignations Terminations Other Total Turnover
Year Total
Employees
Number Percent Number Percent Number Percent Number Percent Number Percent
Wage 2,360 11 0.5% 327 13.9% 58 2.5% 735 31.1% 1,131 47.9%
Covered 31,942 334 1.0% 3,301 10.3% 1997 732 2.3% 342 1.1% 4,709 14.7%
Uncovered 1,960 20 1.0% 318 16.2% 45 2.3% 59 3.0% 442 22.6%
Wage 2,248 19 0.8% 363 16.1% 54 2.4% 820 36.5% 1,256 55.9%
1998 Covered 32,261 273 0.8% 3,332 10.3% 712 2.2% 282 0.9% 4,599 14.3%
Uncovered 2,193 16 0.7% 197 9.0% 23 1.0% 44 2.0% 280 12.8%
Wage 2,344 7 0.3% 374 16.0% 66 2.8% 787 33.6% 1,234 52.6%
1999 Covered 32,306 323 1.0% 3,692 11.4% 835 2.6% 298 0.9% 5,148 15.9%
Uncovered 2,761 20 0.7% 273 9.9% 52 1.9% 86 3.1% 431 15.6%
Wage 2,308 13 0.6% 407 17.6% 81 3.5% 861 37.3% 1,362 59.0%
2000 Covered 32,072 309 1.0% 3,904 12.2% 838 2.6% 244 0.8% 5,295 16.5%
Uncovered 3,469 18 0.5% 397 11.4% 63 1.8% 72 2.1% 550 15.9%
Wage 2,473 8 0.3% 245 9.9% 57 2.3% 506 20.5% 816 33.0%
2001 Covered 31,957 267 0.8% 3,647 11.4% 717 2.2% 233 0.7% 4,864 15.2%
Uncovered 4,058 24 0.6% 434 10.7% 69 1.7% 57 1.4% 584 14.4%
Wage 2,160 7 0.3% 120 5.6% 45 2.1% 390 18.1% 562 26.0%
2002 Covered 31,986 249 0.8% 2,897 9.1% 638 2.0% 292 0.9% 4,076 12.7%
Uncovered 4,360 19 0.4% 284 6.5% 67 1.5% 63 1.4% 433 9.9%
The majority of employees hired with the State of Arizona are considered salaried employees, including covered and uncovered
employees. Wage employees are those employees who are hired on a temporary basis and earn an hourly wage. This table represents
filled positions only – it does not include vacant positions. The distinction is made between “covered” employees (employees in positions
covered by the ADOA personnel rules) and “uncovered” employees (employees in positions not covered by the ADOA personnel rules).
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 5
Attract, Retain, and Develop Employees
Strategies
Strategy: Improve compensation levels for
state employees:
• Establish a compensation plan to provide
for annual adjustments to an employee’s
base salary until they reach the midpoint
of their range.
• Establish a salary component to provide
for performance or merit increases, which
will be distributed only to high
performing employees.
• Establish a component to ensure all
salaries keep pace with projected market
movements over the next five years
• Continuation of some salary market
adjustment monies to address situations
where a particularly class of positions is
further behind the market and in an
inequitable compensation position
compared to other state jobs.
Description: The plan outlined in the 2002
Annual Salary Recommendation incorporates all
current thinking regarding compensation plan
design. It will fulfill the Legislature’s stated goal
in 1998: “That employee compensation be
considered competitive if it is within five percent
of market compensation, including salary and
benefits.” (Laws 1998, Chapter 292, § 17). This
plan will also improve the state’s investment in
human capital to improve retention of key
employees, reduce costly turnover, and most
importantly, improve customer service. Finally,
it will close the gap that relentlessly grows
between the average compensation of state
service employees and the overall public and
private labor markets in Arizona.
In order to establish a competitive stance in the Arizona labor market, it is essential that an aggressive,
21st century compensation plan be established. The job market currently exceeds the average employee’s
salary by 16.4% according to the latest Joint Governmental Salary & Benefits Survey (JGSS).
Furthermore, it currently takes an average of 10 years for a state employee to reach their pay range
midpoint, even though most employees are trained and fully proficient after 4 or 5 years of service.
Increases in health care premiums in the last 10 years have absorbed some of the employee
compensation increases, negatively impacting buying power and living standard expectations for
employees, particularly those in the lower salary brackets and who select the Point of Service plan
option. Clearly, the state must adopt a pay philosophy that provides a sound approach to compensation
programs. This sound approach will result in a more effective allocation of salary dollars.
As can be seen from the accompanying chart,
this plan will close the gap between state salaries
and the market. Five years from now, state
salaries will still be below the market, however,
the gap will have closed to within five percent.
Further adjustments to compensation levels in
ensuing years will be necessary to ensure that
salaries remain competitive with the market.
$25,000
$30,000
$35,000
$40,000
$45,000
99 00 01 02 03 04 05 06 07
MARKET
ARIZONA
Resource Assumptions:
(Thousands)
FY 2004
Estimate
FY 2005
Estimate
FY 2006
Estimate
FY 2007
Estimate
FY 2008
Estimate
General Funds
Other Appropriated Funds
Other Non Appropriated Funds
Federal Funds
Total $70,220.0 $74,012.0 $78,009.0 $82,221.0 $86,661.0
FTE Positions 0 0 0 0 0
*Estimates based on an average salary increase of 5.4% per employee.
Salary Comparison
Difference from Market
11.5% 13.2% 16.4% 16.4% 13.2% 11.2% 9.2% 7.2% 5.3%
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 6
Attract, Retain, and Develop Employees
Strategies continued
Strategy: Offer an attractive, competitive, and
comprehensive benefits package to
state employees:
• Maintain the current offerings of a
robust and comprehensive suite of
benefits
• Offer a self-insured medical and
dental plan that offers more choice at
a lower cost
Description: ADOA has been legislatively
mandated to develop and implement self-funding
of the health and dental insurance programs.
Three primary elements are necessary to ensure
the success of this initiative:
• Establish an appropriated claim liability
reserve to ensure fund stability.
• Establish appropriate administrative
functions (e.g. claim appeals, stop-loss
insurance coverage).
• Establish appropriate staffing to ensure
a quality service is delivered to
employees.
The advantages of self-insurance include:
1) Self-insurance allows large organizations to better control costs and insulate themselves from
drastic fluctuations in the insurance market.
2) Many employees and states have already switched to self-insurance to gain more control over their
health care data, which is necessary to base quality policy and financial decisions.
3) Finally, focusing on employee long-term health will offer the state the opportunity to improve the
health of its’ workforce, not just meet the immediate health care needs for a specific contract
period.
Resource Assumptions: Dollars reflect increases in the cost of health and dental care, which will be higher if self-insurance
is not implemented.
(Thousands)
FY 2004
Estimate
FY 2005
Estimate
FY 2006
Estimate
FY 2007
Estimate
FY 2008
Estimate
General Funds
Other Appropriated Funds 11,155.1 14,519.6 14,519.6 14,519.6 14,519.6
Other Non Appropriated Funds 61,273.1 61,273.1 61,273.1 61,273.1 61,273.1
Federal Funds
Total $72,428.2 $75,792.7 $75,792.7 $75,792.7 $75,792.7
FTE Positions 7.0 7.0 7.0 7.0 7.0
Increases in health care premiums in the last 10 years have absorbed some of the employee compensation
increases, negatively impacting buying power and living standard expectations for employees, particularly
those in the lower salary brackets and who select the Point of Service plan option. When asked of their most
important factor when choosing a health plan, 38% of employees responded cost (premium and co-pays) and
19% responded doctor choice.
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 7
Attract, Retain, and Develop Employees
Strategies continued
Strategy: Consolidate and improve statewide
training (Arizona Government
University) by:
• Establish a statewide tracking of
training
• Establish a web-based calendar and
scheduling system
• Consolidate and automate
registration
• Standardize all curricula
• Design and implement a vendor
management system (STARS)
• Design and implement a standardized
evaluation instructor/vendor system
Description: Across all of state government
there has been a downward trend in employee
satisfaction with agency support of participation
in training opportunities to improve job skills
(63% agreement in 1999 down to 59%
agreement in 2001). Furthermore, employee
satisfaction with agency support of education
and professional development opportunities is
even lower and is also exhibiting a downward
trend (57% in 1999 down to 55% in 2001). One
of the strategies that state government is
pursuing to address this challenge is to develop
Arizona Government University (AzGU).
Arizona is the first state to take a corporate university model and build a collaborative, across agency
boundaries, systemic approach to workforce development. AzGU is the centralized administration for
training activities of the 127 agencies in the state of Arizona with a decentralized delivery system.
AzGU’s purpose is to deliver a cost efficient, cost effective employee development program that assures
access to all 42,000 employees of the state of Arizona.
Resource Assumptions:
(Thousands)
FY 2004
Estimate
FY 2005
Estimate
FY 2006
Estimate
FY 2007
Estimate
FY 2008
Estimate
General Funds
Other Appropriated Funds
Other Non Appropriated Funds
Federal Funds
Total 0.0 0.0 0.0 0.0 0.0
FTE Positions 0 0 0 0 0
Notes/Assumptions: Through partnerships with the 10 community college districts AzGU now provides college credit for 33 of the
state training courses in indemnity, management, leadership and basic skills at no cost to the student or the State of Arizona. The
development of these 33 courses for college credit caused a complete re-model of the state’s indemnity courses (ethics, sexual
harassment, diversity, etc.), and the leadership program to a higher standard as well as the inclusion of tests for all courses. It is
anticipated that a minimum of 20 additional courses will be developed for college credit in the upcoming year.
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 8
Attract, Retain, and Develop Employees
Strategies continued
Strategy: Improve workforce planning:
• Replace the existing HR/Payroll
application.
• Design to fulfill business and
technical requirements.
• Interface with Arizona Financial
Information System (AFIS) or a
future financial application that can
support interfaces with other external
systems.
• Provide a user-friendly ad-hoc
reporting tool.
Description: The current human resources
management system is unable to provide timely
and pertinent information to HR managers to
enable them to proactively plan for changes in
the workforce. The new Human Resources
Information Solution (HRIS) will use state of the
art information technology to help the agency
and the state more fully realize their business
goals.
Resource Assumptions: All additional resources (monies and FTEs) required to implement the new HRIS will be
offset by savings in efficiencies and reductions in workload. It is estimated that $43.4 million over the next 10 years in
hard dollar savings will accrue to ADOA. This estimate does not include productivity gains and other agency savings.
(Thousands)
FY 2004
Estimate
FY 2005
Estimate
FY 2006
Estimate
FY 2007
Estimate
FY 2008
Estimate
General Funds
Other Appropriated Funds
Other Non Appropriated Funds
Federal Funds
Total 0.0 0.0 0.0 0.0 0.0
FTE Positions 0 0 0 0 0
Outcomes Expected…
• Reduce HR/Payroll
technical support effort
and software
maintenance effort.
• Provide a solution that is
flexible, scalable, and
supportable.
• Improve HR/Payroll
processing reliability.
• Eliminate duplicate
automated systems and
processes within the
State of Arizona.
• Provide the foundation
for e-government.
The State of Arizona is facing a serious
challenge with fewer resources available but a
higher demand for state services. The state
workforce is shrinking, state salaries continue
to be significantly below the market (10%
below the average Arizona worker), overtime
costs are rising, and 42% of the state
workforce has 4 years or less of experience.
This information demonstrates the difficulty
we are facing in attracting and retaining
employees. Within the next few years, the first
wave of baby-boomers will be reaching
retirement age. In the federal government,
estimates are that 30% of the workforce will
be eligible to retire in five years. If the state’s
workforce is at all comparable, agencies must
start planning now for the workforce of the
future. This type of planning, however,
requires an information system that supports
management and analysis of the state’s
workforce.
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 9
Strategic Issue #2
Information Technology Efficiencies
Problem: Current thinking and action by public and private organizations envision that a single
provider of data, voice and video platforms is often the most cost-effective means to technology
efficiency. It is imperative that opportunities to consolidate the delivery of technology support for
business solutions and to provide outstanding service delivery be continuously explored and
utilized whenever possible.
It is the belief of ADOA that current approaches to telecommunications in particular, and to a
lesser extent data technologies, consist of unnecessary duplication, overlap and waste. We are in
the process of working with the state agencies to identify opportunities for consolidation. Once
potential opportunities are identified for increased cost effectiveness, it is critical that all potential
solutions be thoroughly researched, analyzed, and compared to other business systems’ needs
prior to implementation. This type of comprehensive infrastructure should provide the highest
level of quality and cost effectiveness, allow maximum return on the state’s valuable resources,
ensure effective, affordable state-of-art business solutions, and identify exceptions requiring
unique business systems.
It is vital that these efforts be continued and built upon. Therefore, adoption of standards and
processes for delivering innovative solutions, development of deeper specialties and proficiencies
in areas of “core competency,” and identifying the demand for clearly defined services and
business functions that require a technology solution are needed. Additionally, by defining
services, initiatives, and applications in terms of their value to the enterprise, rather than
satisfying independent agency requirements, and by measuring and evaluating services regularly
for quality, customer satisfaction, and volume will ensure maximum benefit potential for all state
agencies. In addition, while acknowledging that some systems are unique and will require
specialized design and operation, there will continue to be a substantial need to protect the
integrity of these systems and equipment in a cost effective way. This will require adequate
security mechanisms that can only be attained through adherence to security architecture
standards established and controlled through a centralized security monitor.
Finally, by constantly evaluating whether privatization would improve outcomes and/or reduce
costs will maximize the state’s potential buying power, enable higher levels of technology, and
ensure that the most secure, efficient and effective technology systems are utilized statewide.
Having consolidated the functions that are appropriately and cost effectively operated in such a
way will provide a better ability to evaluate whether further savings could be achieved through
privatizing part or all of the functions.
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 10
Information Technology Efficiencies
Strategies
Strategy: Consolidate statewide voice, data
and WAN services and components:
• Telephone systems
• Capital Mall and Tucson Complex data
networks
• Carrier provided services
• Staffing
Description: The Legislature in House Bill 2706
requires ADOA and GITA to develop a plan for
JLBC review on any options, including
privatization, for improving service delivery and
increasing the fiscal efficiency of Arizona
telecommunications services. The figures
contained in the Resource Assumptions section
below represent a range dependent upon the
option selected.
Benefits to Consolidation:
∗ Minimize, and potentially reduce by 10 to 15 percent, statewide telecommunication costs.
∗ Eliminate duplication, over-capacity and non-standardization to increase efficiency and
productivity, both in the area of telecommunications as well as data services.
∗ Encourage enterprise-oriented applications to facilitate e-government and improve customer
service.
∗ Empower the customer to complete business without direct government involvement.
∗ Incorporate the increased priorities of security, disaster recovery and emergency response.
Resource Assumptions:
(Thousands)
FY 2004
Estimate
FY 2005
Estimate
FY 2006
Estimate
FY 2007
Estimate
FY 2008
Estimate
General Funds
Other Appropriated Funds $(6,214.7) to
$(6,832.0)
$(1,514.8) to
$(2,235.0)
$2,225.7 to
$2,431.4
$4,754.8 to
$4,960.6
$6,433.4 to
$6,639.2
Other Non Appropriated Funds
Federal Funds
Total $(6,214.7) to
$(6,832.0)
$(1,514.8) to
$(2,235.0)
$2,225.7 to
$2,431.4
$4,754.8 to
$4,960.6
$6,433.4 to
$6,639.2
FTE Positions TBD TBD TBD TBD TBD
Notes/Assumptions: This proposal provides support for all state of Arizona employees (42,000) excluding the university system, local
governments and school districts. Services to these state agencies are provided through fees for service. The estimates shown reflect
statewide savings, excluding the university systems, and do not imply governance by ADOA or any specific entity.
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 11
Information Technology Efficiencies
Strategies continued
Strategy: Upgrade the following statewide
components:
• Printing and storage services
• IBM mainframe Z900
• System and application software
Description: In order for the enterprise
operations center to provide maximum
efficiency, and best value, the additional
processors and memory upgrade must be
completed.
The proposed upgrades will:
• Allow the enterprise to maintain pace with the ongoing demands of the enterprise user and the
customer base.
• Facilitate consolidation efforts and large-scale application development.
• Enable the rollout of new activities (i.e., HRIS), business and service integration activities and
simple development growth of large agency customers.
Resource Assumptions:
(Thousands)
FY 2004
Estimate
FY 2005
Estimate
FY 2006
Estimate
FY 2007
Estimate
FY 2008
Estimate
General Funds
Other Appropriated Funds 1,410.0 693.0 730.0 455.8 501.7
Other Non Appropriated Funds
Federal Funds
Total 1,410.0* 693.0 730.0** 455.8** 501.7**
FTE Positions 0 0 0 0 0
* Includes one time software upgrade charges.
**Additional upgrades, that are not included in these figures, may be required. ADOA believes that it is premature to include costs for
additional upgrades at this time since the Department of Revenue, AHCCCS and others are considering changes in their mainframe
strategies.
Notes/Assumptions: Historically growth in customer services has required the upgrade of the ADOA mainframe annually. These
figures include an upgrade for FY 2004, specifically, the z900 mainframe must be upgraded from a Model 104 to a Model 106.
Additionally, a two-gigabyte memory upgrade will be required concurrent to the Model upgrade.
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 12
Strategic Issue #3
Cost Efficient & Effective Public Facilities
Problem: A 40% population increase in the State of Arizona over the past decade has
significantly increased the demand for state services and the facilities to house state employees to
provide those services.
The ADOA building system consists of over 2700 structures with a replacement value of over $2
billion. Of those, 2.5 million square feet of office buildings are located on the Capitol Mall. The
inability to build facilities to keep pace with the rapid growth in demand has increased the state’s
reliance on leasing private sector office space in the Phoenix area to over 560,000 square feet.
This has resulted in fragmented management and delivery of services to the public at higher costs
and inefficiencies in operation. Studies have also shown that long-term cost savings in excess of
$70 million can be realized over the life of a typical 100,000 square foot office building by state
ownership over leasing in the private sector.
In addition, lack of funding for maintenance, according to the statutory formula, has resulted in
the accumulation of over $100 million of deferred maintenance in structures in the existing
inventory. According to a University of Wisconsin report, “every dollar spent on preventative
maintenance programs results in reducing the future repair and replacement costs by five dollars.”
There is a need to decrease the state’s dependence on high cost private sector leases by continuing
to build new office buildings on the capitol mall and to adequately maintain the physical
condition of the existing building inventory. Doing so will improve the quality of service
delivery to the public, improve operating efficiencies and save significant costs over the long
term. Additionally, projects to relocate agencies within the capital mall, and whenever possible
within singular structures, enables the state to provide the general public with quick and easy
access to numerous state services within a centralized location.
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 13
Cost Efficient & Effective Public Facilities
Strategies
Strategy: Implement the Ten Year Capitol
Mall Master Plan developed by ADOA.
Description: Design and construct facilities
identified in the Capitol Mall Master Plan for
FY2004 through FY2008.
Building vs. renting improves customer service, increases operational efficiency and provides long-term
cost benefits to the taxpayers. Leasing has cost $79 million over the last ten years with no residual value
to the state. Therefore, we need to:
• Continue to revert private sector leases by building new office buildings on the Capitol Mall
according the Master Plan.
• Utilize Privatized Lease to Own (PLTO) or Certificate of Participation (COP) financing to fund new
office building construction.
• Use cash flow from existing leases to offset payments for the new buildings.
Resource Assumptions:
(Thousands)
FY 2004
Estimate
FY 2005
Estimate
FY 2006
Estimate
FY 2007
Estimate
FY 2008
Estimate
General Funds $4,682.0 $1,300.0
Other Appropriated Funds
Other Non Appropriated Funds (*see note) $15,000.0 $54,300.0 $6,400.0 $36,900.0
Federal Funds
Total $4,682.0 $14,000.0 $54,300.0 $6,400.0 $36,900.0
Projected PLTO Savings ($431.2) ($317.0) ($325.5) ($330.6) ($338.0)
Projected DHS PLTO Savings ($804.4) ($312.7) ($306.6) ($308.8) ($309.8)
Projected Nat. Res. PLTO Savings ($200.0)
Total Savings (**see note) ($1,235.7) ($629.7) ($632.1) ($639.4) ($847.8)
FTE Positions (Work driven, Project Funded) 2 2 3 3 3
2004 Estimate includes relocation costs for the new DHS Building (PLTO II), land acquisition costs for the 2006 project,
Security Assessment Project Improvements, Pedestrian Safety and Security Lighting Projects. Continue two project
funded FTE’s.
2005 Backfill of former Health Lab ($1,300.0) to be funded from general fund. Legislative Office Addition ($15,000.0), an
88,000 s.f. plus 250-car addition to DHS parking structure (2-year project). Propose COP or PLTO funding. Continue two
project funded FTE’s.
2006 Natural Resource and Department of Corrections buildings, 340,000 s.f. with 1020 car parking structure (2-year project).
Propose COP or PLTO funding. Continue two project funded FTE’s and add one new project funded FTE.
2007 Capitol Mall Parking Structure, 900 car ( 1-year project), propose COP funding and continue three project funded FTE’s.
2008 Banking, Insurance and Real Estate Building, 200,000 s.f. with parking for 900 cars (2-year project). Propose COP or
PLTO funding coupled with sale of the 44th Street facility. Continue three project funded FTE’s.
2009 Polly Rosenbaum Archive Center shifted in priority due to operating cost impact.
*Note: Privatized Lease-to-Own (PLTO) process or COP process assumed, only funds to offset yearly costs above current
appropriations is needed. All estimates are conceptual and based on 2002 dollars.
**Note: Savings projected are based on the projected cost difference between projected private, market driven, lease and PLTO lease
rate.
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 14
Cost Efficient & Effective Public Facilities
Strategies continued
Strategy: Obtain full formula funding for
Building Renewal.
Description: Obtain and efficiently utilize
statutory Building Renewal Formula funding for
major maintenance of facilities in the ADOA
Building System.
Building Renewal: The building renewal program defines building renewal as “major activities that involve the
repair or reworking of a building, including the upgrading of systems which will result in maintaining a building’s
expected useful life.” Today, the building renewal funding supports over 2,700 structures comprising 19,400,000
square feet of space with a replacement value of over $2 billion.
The legislation established a formula for the amount of annual funding that should be appropriated for building
renewal. The methodology results in approximately 1% of the building asset value being recommended for major
maintenance activities for the entire building system. The building renewal formula for the past sixteen years
recommended total appropriations of $172,448.9; however, only $73,103.2 was actually appropriated. Thus, the total
deferred major maintenance for all structures is $99,345.7. All agencies have received insufficient funds to maintain
the useful life of most buildings in the ADOA Building System.
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Appropriation
6
5.5 6.1 6.2 6.2 6.8
8.3 8.6 8.7 9.1 9.9
12.6 13.7
16
17.2 18.1
19.5
4.9
5.5
3
3.2
0.5
0.8
2.2
3.1
5
8.2
4.9
6.2
13.6
3.4
3.7
6.5
3.1
0
2
4
6
8
10
12
14
16
18
20
$ Millions
$100.7 Million in Deferred Maintenance
⇒ Institutionalize the importance of building renewal full formula funding.
⇒ Identify and prioritize projects by order of importance.
⇒ Efficiently allocate funding to projects of highest importance.
⇒ Monitor and implement processes to efficiently manage building renewal projects.
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 15
Cost Efficient & Effective Public Facilities
Strategies continued
Building Renewal - Long Term Impact
Building’s operating systems, such as mechanical (hvac, plumbing, electrical, fire suppression and alarms, and security,
elevators, external shell (exterior paint, roofs, windows, and doors), infrastructure (water and sewer lines, roadways and
parking lots, sidewalks, exterior lighting, and water and sewage treatment plants) and interior finishes, carpets, floors,
interior paint, bathroom counters and fixtures) need regular scheduled and systematic repairs and replacement. In
addition, building codes and legislative mandates continuously change without prior notice and have required the use of
building renewal funds to meet the new legal requirements. For example, building renewal funds have been used to
meet the American with Disabilities Act and the fire marshal’s mandate for installing fully addressable class A fire
alarms.
Currently, only the critical life, health and safety needs and minimal preservation of assets can be addressed with the
funds provided. However, the cost to maintain the useful life of the buildings in the ADOA Building System is
increasing due to the average age of buildings increasing, which is now approximately 23 years. Major building
systems have reached their useful life and many components are no longer operating at their original efficiency. The
current level funding restricts projects to the replacement of failed components rather than the often-needed system
replacement. This leads to higher unit repair costs and leaves inefficient systems still in operation. Without full
funding, the building system will have to continue to wait for components to break before their replacement can be
funded. It is more costly to replace broken components in an emergency rather than replacing them according to a
planned schedule. All of the building systems will continue to deteriorate, and over time will eventually end up failing
without adequate funding for building renewal.
Preventative Maintenance
Studies have shown that every dollar spent on preventative maintenance will save five dollars in cost avoidance
over the long term. It is difficult to quantify savings in the short term. However, since the inception of the
Preventative Maintenance Program in 1999, emergency repairs have decreased from an average of 63 per week
to less than 1.2 per week.
Resource Assumptions:
Building Renewal Formula Forecast
FY 2004-FY 2008
(Thousands)
Fund Source FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
General Funds $19,744.1 $21,183.8 $22,415.3 $23,666.2 $24,936.4
Other Appropriated Funds $3,000.0 $3,000.0 $3,000.0 $3,000.0 $3,000.0
Other Non Appropriated Funds
Federal Funds
Total* $22,744.1 $24,183.8 $25,415.3 $26,666.2 $27,936.4
FTE Positions** 0 0 0 0 0
* Total equals full building renewal statutory formula funding.
**Keep 5 current authorized, work driven, Building Renewal projected funded FTE’s in place.
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 16
5.5
6
6.5
7
1994 1996 1997 1998 1999 2000 2001
Average Importance
0%
10%
20%
30%
1996 1997 1998 1999 2000 2001
Services w/ Sat >6.5
Strategic Issue #4
Maximizing Productivity, Cost Effectiveness and Customer Satisfaction
Description: The mission of the Arizona Department of Administration (ADOA) compels it to
provide support services to state agencies, state employees, and the public, enabling them to
achieve their goals. Further, ADOA is committed to providing services that are valued by its
customers, while meeting or exceeding its customers’ needs. ADOA currently offers up to 76
services to a customer base that includes approximately 9,000 retirees and over 62,000 active
state employees from over 100 state agencies, boards and commissions and 3 state universities.
The available services include statewide financial services, facilities management, human
resources management, information services, fleet management, administrative management
services, and police services for the capitol mall in Phoenix and the state mall complex in Tucson.
The value of each service provided by ADOA should meet or exceed the value of a comparable
service from any other source. Because this issue is of strategic importance to the mission of
ADOA, and of critical importance to state government overall, it is essential for ADOA to
maximize the productivity and cost effectiveness of its services while achieving the highest
possible level of customer satisfaction.
Customer Satisfaction
Importance – In the annual external survey,
customers were asked to consider all of the
services ADOA provides and to give an overall
rating. In 2001, customers gave an average
importance rating of 6.56, which, as the chart
indicates, has remained relatively stable over the
past four years.
Satisfaction - Customers also provided an
overall rating of satisfaction for the agency. The
average rating was 5.94, which is a slight decline
from last year's all time high of 6.04, however
this was the second-highest mark ever achieved,
and suggests a continuation of the long-term
trend of improvement.
5
5.5
6
6.5
1994
1996
1997
1998
1999
2000
2001
Average Satisfaction
Other 2001 Agency-level Indicators
• 34 of 71 services (48%) showed an increase in customer
satisfaction; highest ever achieved
• 14 services (20%) received satisfactory ratings over 6.5;
highest ever achieved
• 37 services (52%) received satisfactory ratings over 6.0;
highest ever achieved
• 5 services (7%) received overall dissatisfactory ratings
(less than 5)
• Of those services that had satisfaction scores less than
6.5 last year (sample size of 63), 35 (56%) showed an
increase in satisfaction
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 17
Maximizing Productivity, Cost Effectiveness and Customer Satisfaction
Strategies
Non-Financial Impact Strategies
• For each service, enhance the performance measures for productivity and cost effectiveness to
balance the existing, effective measures of customer satisfaction.
• On the ADOA intranet, post balanced scorecard data for ADOA’s programs; and productivity,
cost effectiveness and customer satisfaction data for each service.
• Use the analysis of performance data to identify opportunities for improvement in under-performing
programs and/or services.
• Prioritize the identified opportunities for improvement based on the importance of the service(s)
to the customer base.
• Improve the productivity, cost effectiveness, and customer satisfaction of under-performing
services through process improvement, re-engineering, or outsourcing.
Financial Impact Strategies
Strategy: Develop and implement an AFIS data warehouse.
Impact: A data warehouse would provide a database to allow customers a more efficient avenue for
extracting data for projections, analytical checks, comparisons of payroll and AFIS data, trend analysis,
multiple year analysis, “what if” scenarios and budget scenarios.
Resource Assumptions:
(Thousands)
FY 2004
Estimate
FY 2005
Estimate
FY 2006
Estimate
FY 2007
Estimate
FY 2008
Estimate
General Funds 500.0 350.0 350.0 350.0
Other Appropriated Funds
Other Non Appropriated Funds
Federal Funds
Total 0.0 500.0* 350.0 350.0 350.0
FTE Positions 0 3** 2 2 2
*Costs include ongoing license fees in FY 2006 – FY 2008.
**Three FTE’s would be needed initially for development and implementation of the system, however, in subsequent years only two
FTE’s would be needed to maintain the data warehouse.
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 18
Maximizing Productivity, Cost Effectiveness and Customer Satisfaction
Financial Impact Strategies continued
Strategy: Implement through local community coordinators the 9-1-1 program to include wireless:
• Complete the Phase I wireless network deployment;
• Begin the Phase II wireless deployment; and
• Provide public education, management training, and supply mapping and addressing
information.
Description: The 9-1-1 program is charged with providing guidance and direction and acting as a liaison
to ensure when a citizen dials 9-1-1, the call goes to the right 9-1-1 Center the first time. Funding oversight
is done on a statewide basis. Two additional technical personnel are required to provide mission critical
assistance to the communities/political subdivisions for furthering the development of enhanced 9-1-1 and
to support the deployment of Wireless Phase II. Monies in FY 2004 are necessary to meet the operational
requirements of more than 100, 9-1-1 centers statewide.
Resource Assumptions:
(Thousands)
FY 2004
Estimate
FY 2005
Estimate
FY 2006
Estimate
FY 2007
Estimate
FY 2008
Estimate
General Funds
Other Appropriated Funds
Other Non Appropriated Funds 7,662.5 TBD* TBD* TBD* TBD*
Federal Funds
Total $7,662.5 TBD TBD TBD TBD
FTE Positions 2.0 TBD TBD TBD TBD
*FY 2005 through FY 2008 funding: currently soliciting data from communities for their requirements.
Strategy: Obtain alternative funding for non-enterprise related costs (Telephone and Technology Fund).
Description: The current burdening of Enterprise rates with non-enterprise related costs are effectively placing
a tariff on customers. This drives individual state agencies to seek specific solutions to avoid this defacto tariff.
It also allows vendors a means to increase rates to compete with the burdened rate rather than the true rate. The
end result has been a net increase in the total cost to state government.
Alternative funding mechanisms for Non-Enterprise Related Expenditures and Infrastructure Costs are
requested in order to unburden rates. This action will facilitate competitive rates, encourage consolidation,
and reduce the overall costs to State government.
Resource Assumptions:
(Thousands)
FY 2004
Estimate
FY 2005
Estimate
FY 2006
Estimate
FY 2007
Estimate
FY 2008
Estimate
General Funds * *
Other Appropriated Funds
Other Non Appropriated Funds
Federal Funds
Total N/A N/A N/A N/A N/A
FTE Positions
*No additional funding is required but the mix of funding will change. Based upon FY 2001 information, customers paid for services
as follows: General Fund - 57%, Federal Funds - 9%, All Other Funds - 34 %. Using that split, the proposed alternative funding
mechanism versus the current structure of including the charge in the rates will save the General Fund $317.5 in FY 2004 and $326.5
in FY 2005.
Notes/Assumptions: This issue involves spreading the non-enterprise related costs across all of state government that is benefiting from
these services instead of just against customer agencies.
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 19
Maximizing Productivity, Cost Effectiveness and Customer Satisfaction
Financial Impact Strategies continued
Strategy: AFIS Programmers – shift costs to direct expenditure
Description: The shifting of the AFIS programmers from a billable to a direct expenditure eliminates a
redundancy in the budget process for ADOA. It simplifies the budget process so only one area needs to
prepare a budget instead of the current two areas. In affect, the current methodology budgets the same
dollars twice. It eliminates the billing processes between divisions and the duplicated accounting needed to
support the two areas, reducing both clerical and administrative costs.
Resource Assumptions:
(Thousands)
FY 2004
Estimate
FY 2005
Estimate
FY 2006
Estimate
FY 2007
Estimate
FY 2008
Estimate
General Funds 0 0 0 0 0
Other Appropriated Funds (676.8) (676.8) (676.8) (676.8) (676.8)
Other Non Appropriated Funds
Federal Funds
Total ($676.8)* ($676.8) ($676.8) ($676.8) ($676.8)
FTE Positions (11.3)* (11.3) (11.3) (11.3) (11.3)
*The FTE’s and cost savings represent a reduction in the Technology and Telecommunications (T&T) fund appropriation; these
expenditures are now made from the General Fund.
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 20
Strategic Issue #5
Safety and Security
Description: Personal, workplace and information systems safety and security are essential in
conducting the day-to-day activities of government. It is the obligation of the ADOA to provide
the most feasible level of security and safety for people, workplaces, and information systems.
There are currently three critical areas of safety and security that need to be addressed:
Information Technology, Business Continuity Plans, and Building Security Assessments.
Information Technology: ADOA is assigned the responsibility of providing information
technology protection for over 100 state agencies, as well as its own systems. Today, each
agency addresses its own perceived technology security needs without centralized coordination.
This creates a silo effect that results in unnecessary duplicated expenses and ineffective, short-lived
security solutions. An approach is needed to ensure the consistent application of security
policy throughout state government. Over the next several years changes in the information
technology configuration that will improve and increase the security of the State’s infrastructure
will need to be addressed and implemented.
Business Continuity Plans: In November 1999, Harris Disaster Recovery Associates, Inc.
completed a business impact analysis on the services of ADOA. The report includes a thorough
examination of each service and provides recommended recovery strategies for each of ADOA’s
business processes. Implementation of this plan will ensure the timely reestablishment of the
most critical business processes that will be required following a disaster.
Building Security Assessments: ADOA formed a Building Assessment Team to review the
overall security at each of the State’s facilities within the Capitol Mall area. The team identified
security objectives that included access control, perimeter security, HVAC protection, lighting
and training. The team conducted site visits and developed recommendations based on the
security objectives; specifically focusing on those which would have the greatest impact on the
overall protection and safety of each facility. Some of the buildings were found to have much of
the infrastructure in place, while others will need extensive modification. The implementation of
the recommendations will be needed in order to achieve an optimum level of security necessary
to ensure the buildings and occupants’ safety.
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 21
Safety and Security
Strategies – Information Technology
Strategy 1: Establish adequate security for
Information Technology (IT) protection.
Description: We must be able to detect, deter,
assess, warn, respond and investigate unlawful
acts involving computer and information
technologies. The existence of ongoing network
security vulnerabilities can present an increasing
risk of legal liability regarding due diligence,
therefore, the implementation of the following
will improve and increase security in State
business practices:
Resource Assumptions: ADOA is in the process of meeting with the state agencies to design the
appropriate infrastructure, identify staff and equipment needs, and determine how to best implement into
the overall state system.
(Thousands)
FY 2004
Estimate
FY 2005
Estimate
FY 2006
Estimate
FY 2007
Estimate
FY 2008
Estimate
General Funds
Other Appropriated Funds*
Other Non Appropriated Funds
Federal Funds
(Dept. Homeland Security Grants)
Total TBD TBD TBD TBD TBD
FTE Positions TBD TBD TBD TBD TBD
State of Arizona Cyber Attacks*
Average attacks per hour: 508
Average per day: 12,192
Average per month: 365,760
Average per year: 4,389,120
These attacks include random
(automated system random calling)
and direct and intentional (external
hackers attempting to obtain data
through our systems.
*Based on 20 day survey.
FY03/04 redesign and secure the state information
technology infrastructure. Establishing a state
infrastructure protection center to be “first responder to
cyber-attacks” and apply security technology gateways,
that reduces the overall risk exposure to both external and
internal entities.
FY04/05 continue to apply enterprise wide and automated
as much as possible security management collection tools
to centrally monitor while decentralize the day-to-day
security administration to the individual state agencies
where requested. While at the same time implementing
technology that collects and archives information
dispersed to desktop systems for rapid restoral diminishing
the time to resume business activities in all state agencies.
FY05/06 implement a “state-owned” disaster recovery
strategy and recovery center for use for all public sector
entities to include state, county and local government
systems. Resource requirements are to be determined at a
later date.
FY06/07 implement statewide public key infrastructure
and lightweight directory access protocol for
authentication and protection of public information from
modification during information exchange between the
state government and all interested parties. Resource
requirements are to be determined at a later date.
Failure to Secure Data
Puts Taxpayers at Risk
If medical data is captured
from a state system the
following could happen
under HIPAA:
The State of Arizona would
be held liable or negligent
for not security the data.
Federal fines could be as
much as $50,000 per
personal record. The victim
could sue the state for civil
damages, which could
possibly be millions of
dollars plus court costs.
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 22
Safety and Security
Strategies – Business Continuity Plans & Emergency Operations Center
Strategies:
• Establish and maintain an Emergency Operation Center (EOC) that is capable of
supporting the emergency needs of the ADOA and the agencies that it serves.
• Train all employees regarding their role in Business Continuity Plans.
• Test Emergency Operations Center annually.
Emergency Operations Center (EOC)
The EOC is a major component of the security of the Capitol Mall as the majority of state agencies
that provide essential governmental services are physically located within this area. In the event of
an emergency or catastrophic event, it is crucial that priority services continue to be delivered with
minimal interruption. The EOC was developed to assist agency efforts at mitigation, recovery, and
business continuity response in case of such an event. The EOC provides a secure work
environment, communications and computer capabilities, access to media outlets, first-line
emergency responders and many other services. In addition, the EOC will enable centralize
leadership and decision making, assist in coordination efforts of large-scale incidents, consolidate
resources and improve communications.
Resource Assumptions:
(Thousands)
Description of funding source required FY 2004
Estimate
FY 2005
Estimate
FY 2006
Estimate
FY 2007
Estimate
FY 2008
Estimate
General Fund
Other Appropriated Funds
Other Non Appropriated Funds
Federal Funds
Total 0.0 0.0 0.0 0.0 0.0
FTE 0 0 0 0 0
______________________________________________________________________________________
ADOA Strategic Plan FY 2004 – FY 2008 23
Safety and Security
Strategies – Building Security Assessments
Strategy: Implement the priority one and two
recommendations of the 2001 Capitol
Mall Security Assessment of ADOA
operated facilities.
Description: In October and November of
2001 the Capitol Police and Risk Management
staff assessed 62 buildings within the Capitol
Mall and Tucson Complex for safety and
security. This resulted in approximately 1000
recommendations needed to improve the safety
and security for employees, visitors and elected
officials. The implementation of these critical
recommendations is essential to the day to day
activities of government.
Resource Assumptions:
(Thousands)
Description of funding source required FY 2004
Estimate
FY 2005
Estimate
FY 2006
Estimate
FY 2007
Estimate
FY 2008
Estimate
General Fund (COSF) $1,700.0 $210.0 $45.0 11.7 0.0
Other Appropriated Funds
Other Non Appropriated Funds
Federal Funds
Total $1,700.0* $210.0 $45.0 11.7 0.0
FTE 0 0 0 0 0
*General Services Division will incorporate the funding request into the Capital Improvement Plan and will oversee the completion of
the recommendations through internal assets and external contractors