NAST Innovations Roundtable Items Submitted by Tennessee

1
NAST Innovations RoundtableItems Submitted by
Tennessee

• Business Resumption Plan pgs. 2 - 15
• Legislative Workshops pgs. 16 - 24
• Strategic Planning Process pgs. 25 - 38

• Monday, September 19, 2005
• 200 330 p.m.

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Business Resumption Planning

• The Tennessee Treasury Department Experience

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Why is Business Resumption Planning Important to
Us?

• Major Departmental Responsibilities
• Assets Under Mgmt 31.1 Billion
• Daily Financial Transactions 412.0 Million
• Annual Retirement Benefits 954.5 Million
• Risk Management Payments 40.0 Million
• UCP Payments 13.0 Million
• Victims of Crime Payments 10.5 Million
• Budget 18.8 Million (205 positions)

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Definitions

• What is Business Resumption Planning?
• Advanced planning and arrangements for continuity
  of an organizations time-sensitive services,
  processes and functions.
• Whats a Disaster?
• Any event which disables or interrupts the
  ability to maintain a standard continuous
  business environment .

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Disaster Exposure History

• Natural Disasters
• Tornado in Downtown Nashville 1998
• Tornado in Jackson 2003
• Potential for Earthquake (New Madrid Fault)
• Equipment Disasters
• Andrew Jackson State Office Building -
  Transformer Outage (1999)
• Tennessee Tower - Water Damage from sprinkler
  malfunction (2003)

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Treasurys Approach

• Plan for everything
• youll end up planning for nothing.
• Defined Impacts of Likely Disaster
• Disaster isolated to downtown Nashville.
• No access to facilities for 10 days.
• Access to mainframe systems maintained.

7
Critical Functions

• Process
• Critical Function Categories
• Payroll Processing and Issuance
• Processing and Settlement of Deposits, Checks,
  and Warrants
• Investment Trade Execution, Settlement, and
  Valuation

8
Tasks

• Develop a Plan Document
• Implement a Business Resumption Site
• Develop a Communication Strategy
• Test Revise Plan

9
The Plan Document

• For Each Critical Function, define and document
  within Plan
• Operating Requirements whats needed?
• Critical Personnel whose needed?
• Operating Procedures how will work be done?
• Contingencies who are we relying on outside the
  department (vendors, services) that needs to be
  in on the plan?

10
Business Resumption Site

• Created a Shared Business Resumption Site with
  Secretary of State and State Comptrollers Office
• Located outside central downtown business
  district
• Cost sharing arrangement on joint expenses
• Implementation Issues a partial list
• Equipment Needs (phones, faxes, office supplies)
• Power (Standard Auxiliary)
• Communications (Cabling, Routers, Switches,
  Firewall, Firewall Rule Sets, Bandwidth
  Considerations)
• Entry Issues (Keys, Key Codes, Entry Cards)
• Mail Delivery Issues
• Secured and Non-secured Trash Disposal
• Alarm System About 1,000 Other Things!

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Site Design
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Communication Strategy

• Emergency Communication Plan
• Central Call-in Phone Number
• Emergency Response Team Identified
• Emergency Communication Sticker located on the
  back of Employee ID Badges
• Keep Communication List Up-to-Date
• Distribute Updated Plan on Regular basis

13
Test Revise the Plan

• Involve users doing normal business
• Evaluate and Document Results
• Internal Audit monitored tests and prepared
  after action report
• Fix discrepancies
• Update Plan as necessary

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Lessons Learned

• Implementing a Business Resumption program is
  like making a will --
• Plan for everything youll end up planning for
  nothing.
• Computer hardware replacement cycle
• Testing all functions equipment is critical
• Small things can mean a lot!
• Commitment Essential

15
Need More Information?

• Mr. Newt Molloy, Director
• Information Systems Division
• 615.532.8035
• Newton.Molloy_at_state.tn.us

16
State Retirement SystemEducational Workshops for
Key Legislators
17
Tennessees Retirement System A Brief History

• In 1971, Tennessee had eight different public
  plans.
• Legislative Council on Pensions Insurance
  created
• All plans consolidated in 1972 into three basic
  groups.
• In 1975, the systems had an unfunded liability of
  almost 1 billion and COLAs were not recognized
  in the total liabilities.
• In 1975, began a 40-year program to amortize the
  accrued liability.
• Unfunded accrued liability paid off in 1997 22
  years into the 40-year amortization plan.
• Since 1975, all actuarially required
  contributions have been made.
• Currently 99 funded.

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Role of Legislative Council on Pensions and
Insurance

• Formed in 1971 as a legislative oversight
  committee.
• Made up of six Senators and six Representatives
  from the Finance, Ways and Means Committees of
  each chamber.
• Duties include
• Develop, establish and recommend coherent
  policies and standards on pension and insurance.
• Survey pension and insurance developments in
  other states.
• Review legislation and adopt amendments as
  appropriate.
• No role in administrative operations or benefit
  disputes.

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Councils Statutory Role in Pension Legislation

• All proposed pension legislation is referred to
  the Council.
• The Council cannot kill or hold a bill, but must
  recommend for passage or not for passage within
  five weeks after the bill filing cutoff.
• All bills must contain a funding vehicle or, if
  recommended by the Council, one must be added.
• Funding must be over no more than 20 years.
• Article II, Section 24 of the Tennessee
  Constitution provides that no bill enacted can
  become law if the first years cost is not
  appropriated within the year in which the bill is
  passed.
• Applies to pension legislation.
• Council is staffed by the Retirement Division of
  the Treasury Department.
• In the 34 year history of the Council, only one
  bill has received a negative recommendation and
  still become law.

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Motivation for Educational Workshops

• Legislators Concerns
• A desire to understand the history of the system.
  
• A desire to understand the role of the Council in
  reviewing legislation.
• A desire for more information to permit them to
  do a good job as Council members.
• Staffs Concerns
• The Council on Pensions and Insurance has
  experienced a 50 turnover in membership since
  2001.
• Loss of institutional memory.
• Change in Council leadership.
• Awareness of issues Council likely to face in
  upcoming session.

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Educational Workshop Format

• Scheduled early in legislative session, prior to
  need for Council meetings to review legislative
  proposals.
• Tried to create an atmosphere where the dumb
  questions would be asked.
• Meetings were informal and no action items were
  discussed.
• Only Council members and Treasury staff were
  invited.
• Meetings held in a conference room, not a
  committee hearing room.
• Conducted 3 sessions of 90 minutes each.
• Majority of members attended each session.
• Most members attended every session.
• Lunch was provided.

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Educational Workshops - Content

• History of the Tennessee Consolidated Retirement
  System
• Council Operations Practices
• How the System is Funded
• Retirement Benefits
• Insurance Programs
• Upcoming Issues

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Educational Workshops - Results

• Better understanding of past experiences
• Disciplined approach in past, needed in future
• More willing to reject proposals from peers
• Improved rapport between staff and Council
  members
• Greater discipline no bad bills recommended
• Greater resolve for reform (i.e., return to work
  provisions reformed)

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Need More Information?

• Mr. Ed Hennessee, Director
• Retirement Division
• 615.741.7063
• Ed.Hennessee_at_state.tn.us

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Strategic Planning ProcessAn Update
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Strategic Planning Process

• Why Strategic Planning?
• Plan Components Tennessee Model
• Our Process
• Next Steps
• Lessons Learned

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Strategic Planning Why?

• Legal Requirement Tennessee Governmental
  Accountability Act (PC 875 of 2002)
• Formalized the importance of efficiency and
  accountability in government through the
  development and implementation of
• Strategic Planning
• Performance-Based Budgeting
• Performance Audits
• Our Purpose
• Must mean something for the organization
• Not just a paper exercise

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Plan Components

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Strategic Plan - Process

• Gathered information from all employees utilizing
  a bottom up approach
• Facilitated focus group meetings meetings
  included either breakfast or lunch
• Compiled feedback from focus group meetings
• Formulated Vision, Mission, Team Commitment, Core
  Values, and Goals based on information gathered
  in meetings

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Vision

• Definition
• A mental image of what we want to be
• Question it should answer
• What do we want to be?
• Treasury Vision
• To be faithful stewards of the States financial
  and human resources
• To be passionate about achieving our mission and
  living by our core values

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Mission

• Definition
• A continuing responsibility that we are equipped
  to perform and then assigned to complete
• Question it should answer
• What is our purpose?
• Treasury Mission
• We will be a leader by providing exceptional
  service to our customers honestly, efficiently,
  and effectively

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Team Commitment

• Definition
• Our responsibility to each other
• Question it should answer
• How do we interact with one another?
• Treasury Team Commitment
• In order for us to provide exceptional service,
  both management and employees will foster an
  environment that respects, challenges, motivates,
  and rewards each team member. Each of us has a
  responsibility to develop and maintain this
  environment so that together we can achieve our
  mission and live by our core values.

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Core Values

• Definition
• The character traits that we live by.
• Question it should answer
• What characteristics do we exhibit when making
  decisions?
• Treasury Core Values
• Impeccable Honesty
• Mutual Respect
• Continuous Improvement
• Shared Accountability
• Exceptional Service
• Exemplary Leadership

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Guiding Principle

• Definition
• The compass by which we operate.
• Treasury Guiding Principle
• For each dollar we earn on investments or save in
  expenses, represents one less dollar required
  from taxpayers to operate state government.

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Goals

• Definition
• A target that we aim for to achieve our mission.
• Question it should answer
• What is our target?
• Treasury Goals
• Provide value to taxpayers and citizens of
  Tennessee.
• Efficiently manage human resources.
• Efficiently manage financial resources.
• Protect state assets and minimize risk exposure.
• Maintain and enhance a comprehensive planning
  process that will help us achieve our goals.

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Next Steps

• Develop Activities.
• Develop Group Tasks.
• Develop Individual Tasks.
• Develop Performance Measures.
• Retool The Performance Evaluation.
• Align the Budgeting Process with our Goals and
  Performance Measures.
• Work The Plan!

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Lessons Learned

• Must be committed not just a buzz word
• Employee involvement critical
• Executive level to operational level, all have
  opinions and valuable input insight
• Creates sense of ownership
• Core Values Statement
• Tells us and the world what our business culture
  is
• Wide ranging effect (recruitment, conduct)
• It always takes longer than it does!

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Need More Information?

• Mr. Nathan Burton
• Staff Assistant to Treasurer
• 615.741.2956
• Nathan.Burton_at_state.tn.us