Memorandum

City of Lawrence

City Manager’s Office

 

TO:

Tom Markus, City Manager

CC:

Charles Soules, Tammy Bennett, Mark Thiel, David Cronin

Dave Wagner, Mike Lawless, Melinda Harger, Beth Krishtalka

FROM:

Brandon McGuire, Assistant to the City Manager

DATE:

March 28, 2018

RE:

Recommendation for merger of Public Works and Utilities departments

 

Background

In October 2017, staff from the Public Works and Utilities departments undertook a review of the services and functions of these two departments to evaluate the potential benefit of a merger. The effort was guided by a Steering Team consisting of the management teams of both departments. More than 47 employees from these two departments as well as other City departments participated in this review effort through numerous focus group meetings. Similarities were identified in virtually every function of these departments. From that process, a proposal recommending the merger of Public Works and Utilities was presented to City Manager Tom Markus.

 

The merging of public works and water/wastewater utility departments in local governments is not unique. Jurisdictions in Kansas and across the country have realized efficiency gains and service enhancements through similar efforts. Conversely, some jurisdictions have opted for service delivery models that segregate the functions traditionally provided by these two departments. Communities that have undertaken mergers have proceeded in a variety of ways, from engaging a management consultant to forming a citizen stakeholder taskforce. In the City’s case, the foundation for a merger is strong and momentum is already evident. These two departments work closely together each day in many functions, including field services, customer service, capital project planning, procurement, management of equipment and technology systems, and other areas. They are undertaking implementation of new software systems that will support further collaboration, including a Capital Project Management System (CPMS), an asset and work order management system and customer information system. The opportunity to build on the strengths of these departments and the momentum of ongoing cooperative initiatives supports the decision to undertake the merger through internal efforts.

 

Pending City Commission input, the merger process will begin coinciding with the 2019 budget process. The new consolidated department will be named Municipal Services & Operations (MSO). This memorandum summarizes the potential benefits from formation of the MSO identified in the focus group process and the steps needed to enable consolidation.    

 

Overview of Goals

The following section summarizes input from MSO focus groups regarding the merits and goals of the merger.

 

Improve adaptability and responsiveness: The City’s operating environment is constantly changing due to both internal and external factors. MSO consolidation enables the development of collaborative strategies that improve the City’s response to changing conditions, technological advances and community needs and expectations. Consolidated planning will improve the department’s ability to accomplish priority initiatives, and efficiency gains will better enable the department to meet and exceed expectations for service delivery despite resource constraints.

 

Drive improvements: Focus group participants voiced frustration over past experiences of identifying shortcomings with no forthcoming improvement. The historic separation of Public Works and Utilities contributed to segmented decision making and duplication of efforts. MSO consolidation supports coordinated decision making, strategic planning and day-to-day administration at a larger scale, improving the efficient use of scarce resources to drive needed improvements.

 

Strengthen and coordinate management systems: Management systems vary significantly in scope, application and consistency across the two departments. These variances affect human resources management, financial administration, safety practices and customer service. MSO consolidation supports development of common management systems for consistent oversight and evaluation of all operational activities.

 

Improve resiliency: An urgent need to develop multiple subject matter experts, where only one, or too few exist, threatens continuity of services and presents risks for failure. MSO consolidation supports succession planning and cross-training to ensure backup support in critical positions. In turn, these efforts improve organizational resiliency and provide employees with advancement opportunities within the organization.

 

Streamline processes and points of contact: Interaction with partner City work groups and external customers suffers from multiple points of contact for similar and duplicate functions. These functions/processes include plan review, support of development, service setup to new customers, CIP management, inspections, engineering and capital project management, design guidelines, customer service and work requests. MSO consolidation supports development of appropriate single points of contact for the City’s internal and external partners, improving efficiency and reducing confusion in these various processes.

 

Invest in customer service: Well-intended efforts to provide highly responsive customer service have resulted in a highly reactive approach resulting in unintended inefficiencies and missed opportunities to improve customer service levels. A single point of contact for infrastructure issues and for inquiries about MSO services is needed. The customer service model should incorporate data systems that support efficiency and consistency. Opportunities for customer service improvements exist in all facets of the MSO operation and must be prioritized as the department develops. The MSO customer service model must compliment and support related functions in other City departments.

 

Improve asset management: Except for assets maintained by Parks and Recreation, these two departments maintain virtually all City infrastructure above and below ground, including most City facilities. Common and uniform methods, as well as systems, are needed for the management of capital assets, capital projects, inventory, fleet and equipment, and technology.

 

Coordinate policy development: MSO creates opportunities to develop coordinated approaches to public policy development and administration, including utility rate modeling (stormwater, water/sewer and solid waste), City-imposed standards and regulations and policy initiatives through the annual budget and CIP process.

 

Coordinate data and technology efforts: The MSO must embrace data-driven decision making and analysis of operations. Technology should support common approaches to work, such as work order systems, geographic information management (GIS), customer information system (CIS), capital project management system (CPMS) and financial and billing systems. Where past technology investments have suffered from segmentation, the MSO presents opportunities to meet mutual needs through strategic technology investments.

 

Invest in leadership development: Decision making needs to involve supervisors closest to the decision. Management must develop supervisors and frontline decision makers, provide clear expectations, provide coaching when mistakes are made, and consistently enforce logical systems of accountability. The MSO presents opportunities to improve on the leadership models already in place, eliminate management silos and support collaborative decision making. Decision makers from management to the frontline will benefit from cross-training and knowledge sharing.   

 

Support employee development: MSO consolidation creates new opportunities for employee development and career paths within the organization that do not currently exist in the two-department structure. The City’s ability to thrive in an unknown future depends largely on a skilled and dynamic workforce. Opportunities for cross-training resulting from the MSO will enable employees to grow with the organization and the organization will become more resilient as a result.      

Implementation Priorities

Throughout the merger process, management and staff will be expected to adhere to three simple, but important priorities as summarized below.

 

1. Service Level Enhancements: Decisions and actions will support service improvement. Although the way services are delivered will evolve – as they would without a merger – the community should experience no disruption or deterioration of City services because of the merger process.

 

2. Innovations and Efficiency Gains: Services will be structured to improve the City’s ability to adapt to new demands and expectations within existing resource constraints. Efficiency gains are expected and are needed to accomplish service level enhancement.   

 

3. Continue as an Employer of Choice: Improving the City’s position as an employer of choice is critical to its future success. As new ways of delivering services are identified, opportunities for employees to grow in their careers with the City should emerge.

 

In addition to these priorities, it should be noted that employees will not lose their jobs because of the merger. The organization continues operating under the modified attrition plan and each vacant position will continue to be evaluated. Elimination of positions through attrition is expected to continue in this and all other affected departments.   

 

Next Steps

Pending City Commission feedback, the merger process is planned to begin during the 2019 budget process. The following section summarizes expectations for next steps and milestones.  

 

Ø  City Code revisions through the adoption of several ordinances are needed to reflect the merger and creation of the new Municipal Services & Operations department as well as support the city manager’s role in establishing the new department. Several ordinances are expected to come before the Commission during the coming months.

 

Ø  The City Manager’s Recommended 2019 Budget will reflect the Municipal Services & Operations department and any changes related to the merger known at the time the budget is submitted to the Commission.

 

Ø  The City Manager will identify, through competitive process, the MSO department director. Decisions about the management structure of the department will be addressed following the appointment of the new MSO department director.

 

Ø  Teams of subject matter experts will be formed to develop strategies needed to support the merger. At minimum, this work will include development of the following strategies: management systems, customer service, human resources, budget and financial administration, technology, engineering and project management, regulatory compliance, facilities and equipment. These teams will include MSO employees as well as subject matter experts from other relevant departments. Many of the operational and structural changes resulting from the merger will be driven by the work of these teams.

 

Numerous ongoing efforts that are directly and indirectly related to the merger will continue as the strategy teams begin their work. These efforts include technology initiatives, development of the Planning and Development Services One Stop Shop, employee cross-training and safety training.    

 

Recommendation

The attached functional organization chart was developed to illustrate how the functions under the purview of the current Utilities and Public Works departments naturally align in a consolidated department. As discussed, the departments are characterized by numerous similarities. The MSO will provide a consolidated structure for accomplishing the goals reviewed in this memorandum. Implementation will require a dynamic effort with appropriate evaluation and course correction. The opportunities for improvement are worth working through the challenges of implementation. The Steering Team recommends implementation of the merger process beginning with the 2019 budget development process.

 

Attachments

Municipal Services & Operations Functional Organization Chart