Agenda Item - 2001-11-20 •
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CITY MANAGER'S OFFICE
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MEMORANDUM
°AEGON
TO: Judie Hammerstad, Mayor
Members of the City Council
FROM: Douglas J. Schmitz, City Manager
SUBJECT: Review of 12-Month Reorganization
DATE: 20 November 2001
BACKGROUND
In one month, on 16 December, the 12-month reorganization, which began in
December 2000, will conclude. The goals of the reorganization, as outlined in a
memorandum to the Mayor and Council last December, were based upon the
following factors:
• Within the next 15 months (December 2000 - March 2002), nearly one-
quarter of the department directors would be eligible for retirement.
• Because of the stability over the years in the department director ranks,
many of our mid-level managers have not had the opportunity to
"show their stuff."
• Because of the stability within the ranks of the department directors,
many of them have been doing the same thing for many years. I
wanted to give them and the organization the opportunity to grow, as
well as to use their knowledge and experience in the organization in
new capacities to cast"fresh eyes" on our operations.
• Because of vacancies, I had several positions available to utilize in this
shuffling.
• The reorganization was estimated to save approximately $260,000 in
salaries and benefits.
MEMORANDUM: Review of 12-Month Reorganization Page 2
20 November 2001
REVIEW
Here are my observations on the reorganization:
• The department directors who were reassigned have cast those "fresh
eyes" in their new functions and made positive contributions to the
efficiency and effectiveness of our City services.
Last December,Public Affairs was among the departments having the
lowest ratings of all City departments in the Culture and Climate
survey completed by all employees. Carole Dickerson has stabilized
Public Affairs and was asked to remain in that role. She has concurred
with this request.
Chris Jordan has tackled a review of financial services and internal
processes to focus on efficiencies as well as individual employee
performance. These efforts have permanently reduced the staff level
of the Finance Department by one position.
Janice Deardorff has provided guidance to the interim Library
Co-Directors and Library staff as they worked to create positive
changes in the Library. She has also done much of the up-front work
for the Ad Hoc Library Task Force.
Les Youngbar's interim appointment as Public Safety Director has
enhanced the relationship between our public safety departments and
has provided the opportunity to address issues that were long pending
in the Fire Department, especially several personnel matters.
Helen Bicart, as Police Chief, has gained experience that will provide a
foundation for her as she continues in that role following Les'
retirement at the end of December and until Helen's retirement next
September.
Bob Kincaid has taken on projects of major significance, such as the
800 MHz coordination between our police department, the Lake
Oswego School District (LOSD) and the County. He has spearheaded
the sprinkler systems program between the City and the LOSD. Bob is
also our representative to the County committee studying the forma-
tion of a library/parks special district. He has been the coordinating
link between the County, Rivergrove, the Lake Oswego School District
and the City on the Rivergrove Sewer Project. These projects and
others will be ongoing and continue to need the focus of a key staff
person.
•
MEMORANDUM: Review of 12-Month Reorganization Page 3
20 November 2001
Nancy Bantz, as a member of the special projects team, has taken the
City store from an idea to a reality and has provided assistance to
other departments' projects, especially the Human Resources
Department. Nancy has so enjoyed her new duties that she has
requested that she not return to Parks &Recreation.
• The mid-managers that moved into department director positions have
performed exceptionally.
Jackie Rose and Donna Ainslie have provided steady leadership to a
municipal function that has been unsettled and politically volatile due
to the discussions about a joint library facility with the School District.
(During the course of the year, Mary Norman, the third member of the
library directorship for the 12-months, resigned to accept a position in
her hometown of Corvallis.)
The Library is at a point where it needs a permanent director. I have
decided to begin recruiting for the Library Director position. Neither
Donna nor Jackie are interested in this role,but want to remain as key
managers in the library.
Kim Gilmer has displayed good management abilities and leadership;
it is my intention to name Kim permanently to the director's position
since Nancy wants to vacate this role.
• Other employees reassigned have been exposed to circumstances and
projects that they would not have encountered in their previous
positions. This has assisted them in making career decisions.
Jane Heisler was promoted into the managerial ranks as the Advanced
Planning Manager and has indicated that, at least at this point in her
career, she does not have an interest in becoming a manager.
Rachael Fisher enjoyed her assignments on special projects and
applied at the beginning of this fiscal year for the newly created
Facilities Manager position. Rachael was successful in being promoted
to this position.
Jerry Knippel, formerly stationed at Maintenance Services, has had the
opportunity to work closely with the departments housed in City Hall
and became, upon the resignation of Ron Bunch, the lead staff person
for the Foothills planning committee.
11
MEMORANDUM: Review of 12-Month Reorganization Page 4
20 November 2001
WHAT WE LEARNED
E1 We have solid depth, breadth and skills in our directors and
mid-managers.
v The organization is versatile; it can respond to change and uncertainty.
ET Our employees rose to the occasion and examined the organization
with"fresh eyes," creating changes where necessary.
o My decision to move unilaterally to make these changes was a better
course of action than to have had collegial input into planning for the
restructuring.
When the reorganization was initially planned, I had individual
meetings with the employees scheduled to be reassigned. There was
some grumbling from people who were to be moved or others in the
organization that they had not been consulted. People who were to be
reassigned and who discussed it with me following the individual
meetings, advocated maintaining their existing positions with nominal
change, if any, to their duties. I did not want the"status quo," so I
heard their concerns but implemented the reorganization as planned.
Er I made a mistake on the"working out of classification" monetary
stipends. Because most employees were going to be working out of
their job specifications, salary adjustments of between 5% -10% were
given. For the one year period, that has worked just fine; however,
employees who will be returning to their previous positions on
16 December 2001 have already voiced concerns about their "loss of
income," even though they knew this would occur at the end of the
12-month period. I would handle this differently the next time.
El Initiating the complete upgrading of the management compensation
package during the reorganization period created some anomalies
with our pay plan that Finance and Human Resources are still
addressing. I would not again simultaneously do a reorganization as
well as major adjustments to the management compensation program.
m Some of the new projects that reassigned employees have undertaken
will not be completed by 15 December, and we are in discussions now
regarding the designation of those duties to other employees or the
continuance of those efforts by the current manager.
FINANCIAL IMPACTS
December, at the initiation of the organization, it was estimated that there
Lastg
would be a savings of approximately $260,000 due to the reorganization. The
savings would be achieved because certain management positions that were
V ti
MEMORANDUM: Review of 12-Month Reorganization Page 5
20 November 2001
vacant would remain so during part or all of the reorganization year, or new
vacancies would be created by the shifting of managers to new or vacant
positions.
Richard Seals, of the Finance Department, has recently recalibrated the estimated
savings in salaries and benefits as a result of the reorganization and that number
is now$312,104. The increase is due to a position that became vacant during the
12 months. It should be noted that these numbers do not include adjustments
which were part of the management compensation package that the Council
approved in September.
DO IT AGAIN?
ABSOLUTELY! I believe that every once and awhile an organization becomes
moribund and needs to be shaken up. The reorganization did that. Apparently,
we are not the only organization that has done so, as illustrated in the attached
article from a recent edition of INC. magazine. I intend, in the future, to look at
another reorganization effort reaching to other levels within our municipal
structure.
SO....WHO'S GOING TO BE DOING WHAT?
Listed below are the employees involved in the one-year reorganization,
detailing their position before December 2001, their assignments during the
reorganization, and their position following 15 December 2001.
Employee Before December During After December
2000 _ Reorganization 2001
Nancy Bantz Parks & Special Projects Team Human Resources
Recreation Project Manager
Director
Rachael Fisher On Special Special Projects Team Facilities Manager*
Assignment from
Building Dept.
Carole Library Director Director of Public Director of Public
Dickerson Affairs Affairs**
Donna Ainslie, Library Interim Library Remain as
Jackie Rose Supervisor Co-Directors Co-Directors Until
(Circulation), New Director is
Library Named
Supervisor
(Youth Services)
Kim Gilmer Recreation Parks & Recreation Parks & Recreation
Supervisor II Director Director
MEMORANDUM: Review of 12-Month Reorganization Page 6 -
20 November 2001
Employee Before December During After December
2000 Reorganization 2001
Jerry Knippel Assistant Special Projects Team Assistant
Maintenance Maintenance
Director Director
Les Youngbar Police Chief Public Safety Director Retiring January 1,
2002
Helen Bicart Police Captain Police Chief Police Chief Until
Retirement,
09/01/02
Robert Kincaid Assistant City Chief of Staff Chief of Staff
Manager
Chris Jordan Open Space & Assistant City Assistant City
Special Projects Manager Manager
Director
Janice Human Assistant City Assistant City
Deardorff Resources Manager Manager
Director
* Appointed in summer 2001
** Permanently appointed to position in fall 2001
COMMENTARY
I would appreciate your thoughts on the reorganization and any suggestions,
criticisms, critiques that you might have on the restructuring.
Attachment
,. ., k . ..
,,
AllShóokUp
Why does an entrepreneur reshuffle his entire management team at the peak
of his company's success? BY GEORGE GENDRON, EDITOR-IN-CHIEF
That was the question I had when I at the beginning of their learning curve.And generally—not always,b
1 heard about the big shake-up at most times—they go blasting right through where their predecessors we
Bloomberg L.P.,the company behind and move on to higher levels the company would never have achieve
N'
Bloomberg News service, from Inc's otherwise.
j deputy editor Karen Dillon upon her re-
turn from the annual luncheon hosted Could a small company move people around like that?
by the American Society of Magazine It's easier in a small company.You have fewer people to move.And t
Editors.Michael Bloomberg(pictured at management tvocally is more direct.Itmore focused on th bottom lin
4 4. _ Y right) had been the guest speaker, but The great danger in a small company is that you become overly depe
+:''• .. ,l'' instead of discussing his plans to run for dent on one or two people.And that's all the more reason to move,the
- -"- mayor of New York City, he'd talked about what he had just done with around. In a small company,Joe the salesman has the contacts with .
his company. your big customers. I don't know how you can go to sleep with that •
It seems he'd walked in one day and told nine of his top managers your mind.I'd have Joe switch positions with Sally for two months.Th.
that they were banned from having anything to do with their depart- way. if Joe walks out, he won't take all your business with him.
ments for the next two months.They had to appoint temporary succes-
sors and leave. No further communication was permitted with people OK,but let's go back to your company.Why did you decide to repla
in their former domains,other than perhaps a"hello"in the hallway.Dur- yourself now?You've been running the business for almost 20 year
ing their exiles,the managers were to study the other departments in two- Yes. and that's too long to be doing the same thing. I suspect even 1
week stints.They were to learn everything they could about the depart- years is too long. I just didn't have something else to do after 10 ge-
ment and how it worked,and then report their conclusions, or maybe I wasn't smart enough or didn't have the guts.
In the end some of the managers returned to their original depart-
ments.and some didn't. One person who had worked in the technol- So what persuaded you to do it after 20 years?
ogy end of the business for 20 years wound up as head of worldwide sales Things are going great now.and that's the time to leave. If you want t
for the Bloomberg Professional service division. Another, Lex Fenwick, walk out rather than being carried outyou have to go when everybod
who'd been running European operations out of the London office.con- says."How could you possibly leave?Things are so good."Every time
cluded that the company would be best served by eliminating his job. hear that, I think. "Damn it, I have to go. I don't have any choice." •
Bloomberg was so impressed that he made Fenwick the company's chief when people say. "We can't live without you."That more than anythin
operating officer.while he himself went off to run for mayor. convinced me I have to move on,whether by running for mayor or d•
I'd never heard of anything quite like that happening in a thriving busi- ing something else.
ness'Ka'ren and- `cid toToTiow wiffi-Bloomber was articu- In addition,fhe timing felt right.The company really is in great shay:
larly curious about his motives,because I believe it's impossible to del- but you can always make it better, and now is the time to go for it. If
egate unless what you get in return is more than what you're giving up. say to our managers, "You have to have a successor,"so do I. If I sa
"You've got to try new things,"so do I. It all applies to me as well.
So was the shake-up prompted by the opportunity to run for mayor?
No, I was going to do this whether or not I ran for mayor. I've got 7,900 Isn't it painful to let go so completely?
employees. I have an obligation to those people.They need to know Of course. but it's like dealing with your kids when they're old enoug
• that we have young,innovative management looking out for their careers. to be on their own. Do you want them to stay at home all their lives?It
very painful to throw them out of the nest, but what's the alternative
But what's the theory behind moving so many top people around Do you love them or do you love yourself so much that you're going t
at the same time? screw them for your own self-satisfaction?If you love them,you hurt you
From the moment people start a new lob,two things happen:they acquire self a little bit in their interest.
experience, and they get increasingly jaded. When you move people Besides, I'm very good at delegating. I always have been.That's th
around,they take the experience with them,but they start from scratch secret to this company's success.And when I delegate responsibility,
in the jaded arena. delegate the authority to go along with it.I never second-guess the man
Yes, it's true that the new people don't know as much as the people agers, at least not in public. If I second-guess someone at all, nobod
they're replacing. But the reverse is also true:the new people are just knows about it except me and the manager.
8 INC MAGAZINE
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