D. Re-Organize,
Re-Align and Re-Think
1)
Realign the Organizational Structure
Municipal governments exist largely for one reason – to provide services to
its residents at a cost the population can afford. Those involved in the
direct delivery of those services, such as the road maintainers, the Parks
and Recreation workers, etc., are part of the municipality’s core business
of delivering services to residents.
Those supporting those working in the core business, such as Finance, HR, IT
and Admin, perform an important supporting role. If these roles get
intertwined or confused, inefficiencies can develop. The MNP Consultant
observed organizational problems that created functional inefficiencies and
recommended changes.
This study identified similar inefficiencies and redundancies that need to
be addressed through changes and adjustments to the organizational
structure. For example in all other municipalities the Clerk and HR both
report to the CAO (city manager) and are both staffed at 60% of Owen Sound’s
current level of staffing. We also saw in figure 27, that there was a
migration of positions from the core business to administration. We saw that
the Administration grew from 26 positions in 2006 to 83 positions in 2021.
The impact of this migration is that there are fewer core business positions
dedicated to delivering services and more positions in Administration
supporting those delivering the services. This creates serious
inefficiencies in that it shifts resources away from the core business and
gives them to the administrative support environment, i.e. fewer people
doing the work and more people performing a supporting role.
We were also able to identify
two duplicate support services in the Police Services Department; an
Information Technology Manager and a Corporate Services Manager. This
workload needs to be assigned to the Director of Corporate Services and
these positions deleted.
2)
Introduce Zero Based Budgeting
In
management accounting, when a budget is prepared from scratch with its base
as zero, it is called Zero-Based Budgeting (ZBB). It promises to move
organizations away from incremental budgeting, where last year’s budget is
the starting point for the next. Instead, the starting point becomes zero,
with the implication that past patterns of spending are no longer taken as a
given. Essentially it is a method of budgeting in which all expenses must be
justified for each new period.
During the traditional budgeting
process, managers often view it as a bit of a contest to ensure their
department has the largest budget possible, as this is often seen as a sign
of the importance of their area. Zero-based budgeting forces managers to
understand the cash flows and expenditures of their department and to be
able to articulate why their department should be funded to a particular
level in the context of the organization's goals and objectives.
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Zero-based
budgeting is a concept where the budget for the next budgeting cycle
for an organization, starts from a zero base as opposed to an
increase of the current spending levels. Under this process, the
budget amount for a department must be justified both in terms of
the purpose of the budget and the amount to be included in the
budget. . Roger
Wohlner |
In addition Council should develop a policy
directing that any budget increase from the previous year be accompanied with an
offset from another area. As well, any changes made cannot have an adverse impact on the
delivery or quality of services.
3)
Rethink the Size of the Economic Development Spend
Owen Sound continues to waste valuable resources on development in spite the
fact that these resources have not produced any measurable results in 20
years.
All municipalities invest in Economic Development in hopes of increasing
their improving their tax base and increasing their population. Table 11,
above provides some insight into the annual cost of Owen Sound’s investment
in Economic Development. As you can see Owen Sound has spent almost $12
million over the past ten years aimed at stimulating economic development.
This was NOT the best use of these tax dollars given that the city
population and tax base did not change during this period.
Owen Sound hasn’t grown in 30 years and in spite of the Mayor’s efforts over
the last 12 years it hasn’t happened yet. Hence there is a built up thirst
for Owen Sound to grow; which in turn encourages continued investment in
economic development. This has created a false optimism that growth is just
around the corner. I recall the Mayor saying many times over the last ten
years or so that: “we just need to grow the tax base”. He’s right! We would
all like new industry to relocate to Owen Sound and bring with it a host of
new residents to support our local business. However, based on the past 30
years, it is just unrealistic to continue to believe each budget year this
is the year that growth is going to happen. The reality is that Owen Sound
is not on the threshold of growth.
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It’s time to face reality – it’s not going to happen. So stop Investing in
Growth! We wasted $12 million that could have been used to address other
worthy causes. We need to reallocate these resources toward more realizable
goals.
Based on past results I predict the only growth we are going to see when the
next census is published in 2026 is a modest increase in population in the
range of 1 to 2 percent which will bring Owen Sound’s population to about
22,000. This growth will be independent of Owen Sound’s spending on economic
development efforts. A preponderance of this growth will be due to seniors
relocating here from the GTA to take advantage of the relatively lower
property values and the quieter, safer, environment that Owen Sound has to
offer retirees. We only need to look at the price of new homes in Owen Sound
which are priced at over a million dollars. With a median after tax
household income in Owen Sound of only $57,600, very few locals can afford
these homes yet there is a steady sale of these million dollar homes.
It’s important to note that although all municipalities invest in Economic
Development, Owen Sound is the only municipality in the study group spending
over a million dollars annually on economic development. Owen Sound is also
the only municipality in the study group whose population has not grown in
over 30 years. Perhaps it’s time to rethink this expenditure.
4)
Change the Council-Staff Dynamic
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I believe that the City Manager’s action in withholding
the consultant’s report from Council so it could be massaged and
“interpreted” by staff was clearly outside the role of a Chief Administrator
that is outline in the Municipal Act and summarized in an Ontario Government
Paper titled; “Role of council, councilor and staff”.23 The fact the city
manager felt so confident in his relationship with Council that he would
tell members of council that he was holding back a report on a study that
was marketed as being “independent”, so staff could “interpret” it, gives us
some insight into his perception of the relationship. This caused some to
question, who was really in charge at city hall. This exemplifies one of the
pitfalls of a part time council. That is there is often an unhealthy
dependence on staff for guidance to the extent that the level of trust
becomes so strong that it causes members of council to routinely accept
staff proposals as direction as opposed to suggestions. This is a recipe for
disaster, or in our case it’s a recipe for wildly growing expenses that are
not in line with similar municipalities.
I have over 30 years of experience managing public service administrations
in both federal and provincial environments. What I’ve learned over the
years is that in traditional public service administrations, public service
managers sometimes have their own informal organizational goals that are
often in conflict with the organization’s formal leadership. Therefore it is
essential for each member of council to understand the potential for
conflicting goals and challenge staff when necessary. It’s also important to
maintain an arms-length approach to their relationships with senior staff
and apply a good measure of independent, critical thinking when considering
staff proposals.
I believe that a major
contributing factor in the gross disparities between Owen Sound and both the
municipalities in the study group and Grey/Bruce County municipalities is
the interface between members of council and the senior staff. It is highly
probable that there are conflicting goals at play and senior staff have been
the victors over the years as evidenced by the growth in Administration and
the growth expenses.
To avoid this staff should not
be allowed to present argument in favour of their proposal once a motion has
been tabled. Prior to this staff, after presenting their proposal, should
only speak in response to a question directed specifically to them as per
section 115 of the Procedural Bylaw.
5) Replace “Staff Recommendations” with “Staff Option
Analysis”
The current
practice is for staff to develop their preferred way ahead to solve issues
facing the city in the form of Staff Recommendations. The City Manager
allocates an enormous level of staff time to produce powerful presentations
aim at persuading Committee members and/or Council on their solution of
choice. These are often seen by the public as “sales pitches” and have been
very effective in influencing the way ahead on the issues. Historically
staff recommendations are adopted 90% of the time with no or only minor
modification. I believe that it is this practice that has resulted in the
gross disparities with other municipalities that have development over the
years. At the very least this practice gives the perception that it is the
staff at city hall are the actual decision makers and not our elected
officials.
As outlined above
public sector managers sometimes have their own informal organizational
goals that are often in conflict with the organization’s formal leadership.
Whether or not this is the case at our city hall, it needs to be changed to
avoid the perception that city staff is inappropriately influencing Council
decisions. Therefore the practice of staff presenting “Staff
Recommendations” should end. Instead, staff should identify all realizable
options and complete a comprehensive option analysis. Then staff should
objectively present their findings to the Committee and/or Council without
identifying or hinting at their preferred option.
The fact that
staff has had the time to produce these sales documents in the past,
supports the finding that Owen Sound city hall is overstaffed. For example,
it was clear that hundreds of person hours went into producing the MNP
rebuttal presentation aimed at countering MNP’s recommendation to reduce the
size of the management team. This would only be possible if there was
sufficient surplus capacity in the Administration to work on this
presentation.
The reality is
that Owen Sound is the poorest municipality in the study group and cannot
afford the luxury of surplus capacity on our city staff. We need every
manager and every employee focused on delivering affordable services or
supporting those who do. Using scarce taxpayer resources to produce sales
and marketing materials that appear to be promoting a particular narrative
is not only wrong, but it’s something that the Owen Sound residents cannot
afford. Owen Sound’s Administration should follow the lead of the other
municipalities in the study group and just present Council with the facts
and let them make decisions in the absence of staff influence.
