Breakthrough Change Breakthrough Change Recommendations - - PowerPoint PPT Presentation

Breakthrough Change Breakthrough Change Recommendations Recommendations

Part 2 Part 2 Jim Walton Jim Walton

ZZZZZZZZZZZZZZZZZZZZZZZZZ

Hey! Someone, wake up

It’s a Workin’ Day

Why Breakthrough Change?

Structural Deficit The Growing Gap without Planned Intervention

$356 M $377 M $ 365 M $400 M $379 M

$350,000,000 $360,000,000 $370,000,000 $380,000,000 $390,000,000 $400,000,000 $410,000,000 2005-2006 2007-2008 2009-2010

General Fund Expenditures General Fund Revenues

Why Breakthrough Change?

2003-2004 Biennial Budget was balanced by:

• Cuts to Metro Parks
• New revenues
• Department reductions
• One-time adjustments and cash reserves

There were no permanent reductions to service levels to mitigate future deficits. 2005-2006 Biennial Budget was balanced by:

• $10 million in cash reserves
• Department reductions
• Real estate sales

If we continue in 2006 with unfunded Council priorities for Police, Fire and the Family Justice Center, there will be a $2.35 million budget gap.

Breakthrough Change - Process

Jan-Mar April

Phase I A: Clarify Scope, Goals, Approach Phase I B: Study Current Situation (internal and external) Phase II A: Identify high potential

• pportunities

Phase II B: Formulate recommendations &

• ptions

Phase III: Develop implementation plans Phase IV: Implement Phase V: Track results Amend budget

Jan - March March April May - June June- July July - November November - December Where we are today

What We Saw Last Week

Risk Management Team

• Vehicle Accident Claims
• Workers Compensation Claims
• Employment Practice Claims
• Claims Processing Efficiency

What We Saw Last Week

Compensation & Benefits Team

• Compensation Policy
• Employee Performance
• Compensation Structure
• Benefits Management
• Medical Benefits
• Post Retirement Benefits

What You’ll See Today

• Organizational Restructuring Team

Goal: To provide a more efficient and effective

• rganization for delivering services to citizens
• Vehicles & Equipment Team

Goal: To improve the efficiency and cost- effectiveness of providing fleet maintenance services, and in the purchase of City equipment and vehicles

What You’ll See Today

• Some Opportunities were a “no go”
• Too costly
• Disruptive of service
• Some Opportunities can move forward

now (through implementation plans)

• Some Opportunities are long-term
• Major structural changes are long-term

Breakthrough Change Breakthrough Change

Or ganizational R e str uc tur ing/ Consolidation T e am

T ac oma City Counc il Br e akthr

• ugh Change Initiative

Wor kshop

June 11, 2005

Age nda

T

e a m Go a ls & Pro c e ss

Hig h Prio rity Oppo rtunitie s

Spa n o f Co ntro l/ L

a ye rs

F

unc tio na l Alig nme nt

Summa ry o f Co st Sa ving s

Ne xt Ste ps

T e am Goals

Pr imar y Goal pr

• vide d to te am

T

a rg e t a nnua l c o st sa ving s o f $1,166,000

Ma na g e me nt e ffic ie nc ie s: $750,000 Othe r sa ving s: $416,000

T e am Goals

A mo re e ffic ie nt a nd e ffe c tive

• rg a niza tio n fo r de live ring se rvic e s

Minimize impa c ts o f o rg a niza tio na l

c ha ng e s o n pro viding City se rvic e s

Optimize spa n o f c o ntro l Pro vide func tio na l a lig nme nt &

a c kno wle dg e stra te g ic prio ritie s

T e am’s Se c ondar y Goals

T e am Pr

• c e ss Summar

y

T

wo sub c o mmitte e s

Spa n o f Co ntro l/ L

a ye rs

Ma na g e me nt & supe rviso ry struc ture Ra tio o f supe rviso rs to e mplo ye e s Cla ssific a tio ns F

unc tio na l Alig nme nt

F

unc tio na l Co nso lida tio n

Re -so urc ing (o ut-so urc ing , in-so urc ing ,

a lte rna tive sta ffing )

Re g io na liza tio n

T e am Goals & Pr

• c e ss

T

he o rg a niza tio n will shrink in the future : fe we r se rvic e s a nd e mplo ye e s

F

• c us o n de live ring c urre nt se rvic e s –

se rvic e prio ritie s fro m the b udg e t pro c e ss we re no t re a sse sse d

Struc ture de pe nds o n se rvic e s – if

se rvic e s c ha ng e struc ture sho uld to o

Ke y Assumptions

High Pr ior ity Oppor tunitie s

Span of Contr

• l/ L

aye r s sub-c ommitte e

Spa n o f Co ntro l: # o f pe rso ns supe rvise d b y

• ne ma na g e r o r supe rviso r

City-wide 5.4:1 a ve ra g e spa n o f c o ntro l is

slig htly b e lo w o the r c itie s a ve ra g e spa n a t the time the y did the ir studie s

Supe rviso ry spa n in de pa rtme nts ra ng e fro m

2 to 12

50 pe rc e nt o f supe rviso rs ha ve le ss tha n 5

dire c t re po rts

High Pr ior ity Oppor tunitie s

Span of Contr

• l/ L

aye r s sub-c ommitte e Span of Contr

• l: Compar

isons at time of studie s

Average Span of Control for Selected Local Governments

5.4 5.6 5.9 5.9 6.5 1 2 3 4 5 6 7 Tacoma (2005) King County (1994) Palo Alto (2004) Seattle (1996) Portland (1994)

Source: Subcommittee; City/County Audit/Other Reports

Average Span of Control

High Pr ior ity Oppor tunitie s

Span of Contr

• l/ L

aye r s sub-c ommitte e

Span of c ontr

• l: Ave r

age by de par tme nt

City of Tacoma Average Span of Control by Department

11.87 11.10 10.33 10.009.00 8.12 7.81 6.57 6.36 4.50 4.39 4.22 3.38 3.26 2.71 2.00 2.00

• 2.00

4.00 6.00 8.00 10.00 12.00 14.00

Municipal Court Legal Inform ation System s Management & Budget Retirem ent Public Works Library Police Department Human Resources Human Rights/Human Services Finance Econom ic Development General Services Fire Departm ent Public Assem bly Hearings Exam iner Governm ent Relations Source: Subcommittee Review

• f Organization Charts
• Ave. Span of Contr

High Pr ior ity Oppor tunitie s

Span of Contr

• l/ L

aye r s sub-c ommitte e

Span of Contr

• l

Managers/Supervisors with Span of Control

120 170 215 215

50 100 150 200 250 Less than 3 Less than 4 Less than 5 5 or more

Source: Subcommittee Review

• f Organization Charts
• No. of M

anagers/Superviso

High Pr ior ity Oppor tunitie s

Span of Contr

• l/ L

aye r s sub-c ommitte e

Manage me nt L aye r s

City of Tacoma Maximum Supervisory Layers by Department

3 4 3 2 2 5 3 5 3 4 4 4 4 5 5 1 1 1 2 3 4 5 6

M u n icip a l C

• u

rt L eg a l In fo rm a tio n S ys te m M a n ag e m e n t & B u d g R etirem e n t P u b lic W

• rk

s L ib ra ry P

• lic

e D ep a rtm e n H um an R e so u rc e s H um an R ig h ts /H um a n S erv i F in a nc e E c

• no

m ic D e ve lo pm e G e ne ra l S e rvic e s F ire D ep a rtm e n t P u b lic A s se m b ly G

• ve

rnm e n t Re la tio n H ea rin gs E xa m in e Source: Subcommittee Review

• f Organization Charts

M a x S u p e rv is

• ry

L a y e

High Pr ior ity Oppor tunitie s

Span of Contr

• l/ L

aye r s subc ommitte e

R e c omme ndations

Pre fe rre d Optio n: re vie w supe rviso r

po sitio ns tha t supe rvise le ss tha n 4 e mplo ye e s

E

stima te d sa ving s o f $2,250,000/ b ie nnium

Re vie w will re sult in inc re a se d spa ns

a nd fe we r la ye rs

High Pr ior ity Oppor tunitie s

Span of Contr

• l/ L

aye r s sub-c ommitte e Classific ation

Hig h numb e r o f c la ssific a tio ns no t

c o mpa ra b le to c itie s o f simila r size

I

ssue s in c la ssific a tio n a lso ide ntifie d b y Co mpe nsa tio n a nd Be ne fits Bre a kthro ug h te a m a nd 2004 Pe rso nne l Ma na g e me nt Syste m a udit

Re c o mme nd HR re vie w a nd a ddre ss

c la ssific a tio ns ma tte rs ide ntifie d in spa n o f c o ntro l/ la ye rs wo rk

High Pr ior ity Oppor tunitie s

F unc tional Alignme nt Sub-c ommitte e

F r ame wor k Unive rse o f po te ntia l o ppo rtunitie s E

nviro nme nta l sc a ns (b e st pra c tic e s, b e nc hma rking , sta ff surve y, City Co unc il, te a m me mb e rs a nd c o nsulta nts)

Va lida te / Re fine o ppo rtunitie s Spe c ific a na lysis I

mple me nta tio n pla nning

High Pr ior ity Oppor tunitie s

F unc tional Alignme nt Sub-c ommitte e

Assumptio ns

All sa ving s c o nside re d, b o th Ge ne ra l F

und a nd no n Ge ne ra l F und

Co ntinua tio n o f e xisting se rvic e s E

ffic ie nc y impro ve me nts a lso c o nside re d

All o ppo rtunitie s no t c re a te d e q ua l F

urthe r a na lysis o f a ll hig h po te ntia l

• ppo rtunitie s is re q uire d

High Pr ior ity Oppor tunitie s

F unc tional Alignme nt Sub-c ommitte e

F unc tio na l Alig nme nt a na lysis

Co nso lida tio n o ppo rtunitie s Re -So urc ing o ppo rtunitie s Re g io na liza tio n o ppo rtunitie s

High Pr ior ity Oppor tunitie s

F unc tional Alignme nt Sub-c ommitte e

Consolidation option #1

Co mb ine the Histo ric a lly Unde rutilize d Busine ss pro g ra m (HUB) with the L

• c a l E

mplo yme nt a nd Appre ntic e ship pro g ra m (L E AP), b o th in F ina nc e

Sa ving s b a se d o n re duc ing to o ne

supe rviso r, ma king o ne po sitio n sta ff le ve l

No n GF

Sa ving s: $21,000/ ye a r (a ppro x)

High Pr ior ity Oppor tunitie s

F unc tional Alignme nt Sub-c ommitte e

Consolidation option #2

E xplo re tra nsfe rring

• wne rship o f T

a c o ma Airpo rt to Po rt o f T a c o ma

E

limina te s po te ntia l lia b ility b y $2.85 millio n, whic h wo uld b e GF

• b lig a tio n

Publicly Operated Airports In Washington State by Operating Agency

33% 55% 8% 4% 0% 10% 20% 30% 40% 50% 60% Port City County City/County

Source: WSDOT Airport Listing

Note: Some cities do not have a Port agency available

High Pr ior ity Oppor tunitie s

F unc tional Alignme nt Sub-c ommitte e

Consolidation option #3

Co mb ine the City’ s Re tire me nt Syste ms a dministra tio n func tio ns into o ne de pa rtme nt/ divisio n

City c urre ntly a dministe rs 4 re tire me nt

syste ms/ pla ns

Sa ving s fro m c o mb ining a nd

re c la ssifying po sitio ns

GF

sa ving s: $20,000/ ye a r

High Pr ior ity Oppor tunitie s

F unc tional Alignme nt Sub-c ommitte e

Consolidation option #4

Mo ve the risk ma na g e me nt func tio n fro m Huma n Re so urc e s to F ina nc e

Re q uire s syste mic re vie w:

• the r g ro ups a lso

studying func tio ns within Risk Ma na g e me nt Divisio n

Unkno wn sa ving s

Risk Manager Reporting Organization for Cities Between 100,000 and 500,000 Population

25% 29% 38% 8% 0% 10% 20% 30% 40% Finance Human Resources Other Admin. Attorney/ Legal

Source: ICMA Center for Performance Measurement 2003 Data

High Pr ior ity Oppor tunitie s

F unc tional Alignme nt Sub-c ommitte e Consolidation option #5

Co nso lida te E le c tric a l Ma inte na nc e func tio n in T F D a nd stre e t lig ht a nd tra ffic sig na ls func tio n in Pub lic Wo rks

Re q uire s a dditio na l a na lysis to de te rmine if

func tio ns a re c o mpa tib le

Sa ving s fro m de mo ting supe rviso ry po sitio n Ge ne ra l F

und sa ving s: $28,800/ ye a r

High Pr ior ity Oppor tunitie s

F unc tional Alignme nt Sub-c ommitte e

Consolidation option #6: Budge t func tion in F inanc e

Budget Function Organizational Location: GFOA Survey of 510 Local Governments - 2002

16% 14% 54% 13% 0% 10% 20% 30% 40% 50% 60%

Separate Department Under Chief Administrative Officer In General Fiscal Department In General Administration

Source: GFOA Research Brief

City Department

Bellevue Finance Eugene Finance Everett Separate Gresham Finance Salem Separate Seattle Finance Spokane Finance Tacoma Separate Vancouver Finance

Source: City web sites; MRSC Web Site

Budget Function Organization Location

High Pr ior ity Oppor tunitie s

F unc tional Alignme nt Sub-c ommitte e

Consolidation option #6: Budge t func tion in F inanc e

E limina te the Offic e o f Ma na g e me nt a nd Budg e t Ana lysis a s a se pa ra te de pa rtme nt a nd c o nso lida te its b udg e t func tio n a nd pe rso nne l in F ina nc e

Sa ving s b a se d o n c la ssific a tio n/ e limina tio n o f

po sitio ns

Sa ving s ra ng e s fro m $78,100 to $170,500/ ye a r GF

sa ving s: $21,087 to $46,035/ ye a r

High Pr ior ity Oppor tunitie s

F unc tional Alignme nt Sub-c ommitte e

R e -Sour c ing option #1

2003 Police Department Staffing: Civilian Staffing as a Percentage of Total Staffing

42.5% 28.4% 41.5% 34.5% 30.4% 26.1% 20.7% 26.8% 18.5% 23.1% 24.8% 18.6% 15.2% 8.5% 20.7% 24.6% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%

E u g e n e S e a t t l e S a l e m B e l l e v u e K e n t S p

• k

a n e P

• r

t l a n d H i l l s b

• r
• E

v e r e t t F e d e r a l W a y G r e s h a m B e a v e r t

• n

V a n c

• u

v e r T a c

• m

a W A A v e . 1

• 2

5 k P

• U

S A v e . 1

• 2

5 k P

High Pr ior ity Oppor tunitie s

F unc tional Alignme nt Sub-c ommitte e R e -Sour c ing option #1

I nc re a se use o f no n-c o mmissio ne d sta ff in Po lic e De pt. to pe rfo rm a dministra tive func tio ns no t re q uiring c o mmissio ne d sta ff

E

xa mple s inc lude future sta ffing o f sub sta tio ns a nd re c la ssifying q ua rte rma ste r a nd pub lic info rma tio n o ffic e r po sitio ns

GF

sa ving s: $140,568/ ye a r

High Pr ior ity Oppor tunitie s

F unc tional Alignme nt Sub-c ommitte e R e -Sour c ing option #2

Co ntra c t o ut g ro unds ma inte na nc e func tio n to a priva te firm

Pilo t pro je c t fo r ma na g e d c o mpe titio n E

stima te d sa ving s b a se d o n 5 pe rc e nt sa ving s thro ug h pa rtia l o utso urc e

GF

sa ving s: $87,793/ ye a r

High Pr ior ity Oppor tunitie s

F unc tional Alignme nt Sub-c ommitte e

Re gionalization option #1

With the a g re e me nt o f Pie rc e Co unty L ib ra ry Distric t (PCL D), T a c o ma c itize ns c o uld vo te to a nne x lib ra ry se rvic e s to PCL D

PCL

D wo uld b e so le ly re spo nsib le fo r de live ring lib ra ry se rvic e s, de te rmining le ve ls o f se rvic e a nd po lic ie s

Sa ving s b a se d o n diffe re nc e in b e twe e n

funding a s pa rt o f PCL D vs. sub sidy fro m GF

GF

sa ving s: $4.5 millio n/ ye a r

High Pr ior ity Oppor tunitie s

F unc tional Alignme nt Sub-c ommitte e

Re gionalization option #2

Sha re re g io na l a nima l c o ntro l with a dja c e nt urb a n munic ipa litie s

E

stima te d c o st fo r a nima l c o ntro l is $1.2 millio n fo r 2006

RF

P in pre pa ra tio n sta g e

GF

sa ving s: unkno wn

High Pr ior ity Oppor tunitie s

F unc tional Alignme nt Sub-c ommitte e

Re gionalization option #3

Cre a te re g io na l o rg a niza tio n fo r a rts suppo rt, b o th o rg a niza tio na l a nd fina nc ia l suppo rt

T

he issue c o uld b e e xplo re d b y the City o f T a c o ma Arts Co mmissio n

GF

sa ving s: unkno wn

High Pr ior ity Oppor tunitie s

T

• tal Cost Savings

T

• ta l o f $3,003,000 pe r b ie nnium

(Ge ne ra l F und a nd Othe r) No t inc luding lib ra ry

2006 2007-2008 2009-2010 Spa n o f GF : Co ntro l/ L a ye rs $750,000 $2,250,000 $2,250,000 F unc tio na l GF : Alig nme nt No n GF : $157,680 $78,013 $596,496 $156,026 $596,496 $752,522 T

• ta l

$985,693 $3,002,522 $3,002,522

Ne xt Ste ps

I

nitia te re vie w o f supe rviso ry po sitio ns no w with c ha ng e s sta rting in 2006

E

sta b lish de pa rtme nt g o a ls fo r spa n o f c o ntro l a nd re q uire de pa rtme nts to de ve lo p pla ns in 2005 fo r 2006

De ta ile d a na lysis o f b usine ss c a se fo r

func tio na l a lig nme nt o ppo rtunitie s

T hank You

Que stio ns?

Breakthrough Change Breakthrough Change

Breakthrough Change Initiative

Cumulative Savings - All Teams

$2,968,846 $2,295,597 $9,207,542 $6,913,710 $15,525,833 $11,661,653 $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000

2005-2006 2005-2008 2005-2010 General Fund Other Funds

Structural Deficit Breakthrough Change - without Regional Libraries

$ 365 M $377 M $356 M $379 M $400 M $384 M $370 M

$350,000,000 $360,000,000 $370,000,000 $380,000,000 $390,000,000 $400,000,000 $410,000,000 2005-2006 2007-2008 2009-2010 General Fund Expenditures General Fund Revenues

Breakthrough Change Impact: General Fund Expenditures drop to the level of the BLUE dashed line Source: June 2005 General Fund Forecast

Structural Deficit Breakthrough Change - with Regional Libraries

$ 365 M $377 M $356 M $379 M $400 M $375 M $365 M

$350,000,000 $360,000,000 $370,000,000 $380,000,000 $390,000,000 $400,000,000 $410,000,000 2005-2006 2007-2008 2009-2010 General Fund Expenditures

GF Revenues Breakthrough Change

Breakthrough Change Impact: General Fund Expenditures drop to the level of the BLUE dashed line Source: June 2005 General Fund Forecast

Next Steps

• Council Direction: What recommendations

should move forward, what should we not pursue?

• Develop implementation plans (June/July)
• Implement Breakthrough Changes

(July/November)

• Track results and amend budget (December

forward)

Key Ingredients for Success

• Political will
• Courageous leadership
• Transparency – informing public
• Discipline to set clear targets…

and hold us to them

Breakthrough Change Breakthrough Change

What are our chances What are our chances

• f being successful?
• f being successful?

50 50 – – 50 50 75 75 – – 25 25 100% 100%

Breakthrough Change Breakthrough Change