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HomeMy WebLinkAbout01/31/1989, 6 - UTILITIES DEPARTMENT REORGANIZATION TE- III1�I AI II city/ of San LUIS OB1SPO Janua y 3 anua 31, 1989 COUNCIL AGENDA REPORT FROM: William T. Hetland, Utilities Director SUBJECT: Utilities Department Reorganization CAO RECOMMENDATION: Staff recommends that Council approve, by motion, the proposed department structure and change in some position responsibilities. BACKGROUND In August 1988 the City Council adopted a resolution which established a seperate Utilities Department for the City. It was felt ' that the creation of a Utilities Department to handle all the water and wastewater functions would better serve the current needs of the City. The Resolution also directed the City Administrative Officer and key staff to submit a formal report on the development of the new department. The attached Utilities Department Reorganization Implementation Plan outlines staffs recommendations on formation of the new department and provides a schedule of events that need to take place over the next year to finalize the transition. A Philosophy of Operations was developed for the new department which clearly defines the department culture. It relied on the City's Mission Statement as a base to start from. It is on page 2 of the Implementation Plan. Significant effort was given to the organizational structure and staffing requirements. It was important to develop structure that was streamlined, efficient, provided accountability and did not result in staffing increases. After reviewing a number of alternatives, staff recommends that an organization based on functional lines is most appropriate. This will result in the Utilities Department having two divisions; Water and Wastewater, with all the operating functions being included in each. The proposed organizational chart is on page 4 of the Implementation Plan. Required staffing was the next area addressed and has the most unique recommendation. In order to improve direct line supervision and to increase administrative support to management within the department, it was decided to combine various mid-management/supervisor positions and reallocate their job responsibilities. The primary change is that the supervisors will become "working" supervisors who will work with their crews and will get their hands dirty. The administrative responsibilities previously handled by the supervisors will be partially assumed by the new division managers. It is estimated that the new working supervisors will spend 25°x6 of their time on administrative matters and 75% of their time on field supervision. With this change there is no net increase in the number of employees. The department is looking at additional staffing needs due to facilities growth and service level increases, but those will be presented to Council as part of the City budget process. The Department will follow the City's standard personnel rules and regulation for recruitment to fill the positions. General staff development needs were identified to enhance staff skills and job knowledge. More individualized training will be developed as positions are filled and employee needs are determined. W ��� ► II(�IIIIIpp�h��I ��► city of sal I tuis OBISPO - iMOGN COUNCIL AGENDA REPORT Page 2 It is necessary to modify a number of City systems to account for the new department and staff changes. The systems involved include: City codes; financial systems including budgets and accounts; policies and procedures; and miscellaneous informational systems. These changes will occur over the next year. Finally, an Implementation Plan was developed which outlines the steps that the department will undertake over the next year to finalize the transition. Concurrance: The implementation Plan was reviewed by the Personnel Department and the City Administrative Officer staff and each concurs with the recommendations and proposed implementation plan. The proposed plan was also reviewed with the Employees' Associations. Most of the issues were addressed but some concern still exists regarding the restructuring of the mid-management/supervisor positions and the resulting elimination of three positions. This is discussed in more detail on page 6 of the Implementation Plan. Fiscal Impact: Thew will be no significant fiscal impact on the City due to this reorganization. A slight increase in salary costs may occur depending on final employee selections and appointments. Recommendations: Staff recommendations that Council approve by motion the proposed structure of the New Utilities Department and the revised position responsibilities. attachments Utilities Department Reorganization Implementation Plan Staff Report from 8/2/88 Council meeting - Reorganization of Utilities Division City of San Luis Obispo Utilities Department Reorganization Implementation Plan January 1989 "Even if you are on the right track you will get run over if you just sit there." Will Rogers C- . City of San Luis Obispo Utilities Department. Reorganization Implementation Plan I. Summary and Council Action The new Utilities Department is proposed to be structured along functional lines with Water and Wastewater Divisions. In order to improve communications and accountability, the upper management staff will be restructured by combining positions and revising job responsibilities. This will result in two division managers, one being responsible for the Water Division and one for the Wastewater Division. The mid-management/supervisory positions have been restructured into working supervisors placing the supervision closer to the operating staff and shifting some administrative responsibility to the new manager positions. Though there is a significant change in job responsibilities for some positions, there is no net change in the number of budgeted positions due to this reorganization. Additional analysis is being performed with the line functions to determine additional staffing needs, simply as a result of the Department's growth and increase in responsibility due primarily to regulatory requirements. Significant efforts -� need to be made in identifying and meeting the staff development needs of the employees. Close communications with the employee's organization is necessary in order to obtain their input and address their concerns. Changes to update the codes, policies and financial systems will occur by staff over the next year with no difficulties anticipated. The City Council has already addressed the major policy question by adopting a resolution approving the creation of a new Utilities Department. At this time, staff is recommending that Council, by motion, approve the structure of the new Department and staffing recommendations. II. Introduction In August 1988 City Council authorized the formation of the new Utilities Department. This transferred all water and wastewater functions and personnel to the Utilities Department. Through the creation of a separate department it was felt that the needs of the City would be better served. The creation of a separate Utilities Department had been considered since the early 1980's as a means of improving efficiency and effectiveness in accomplishing the City's .water and wastewater goals and ojectives. An evaluation of forming a new department was listed as a budget objective in the City's 1987-89 Financial Plan. Key Utilities staff have developed a philosophy of operations and identifed an effective organizational structure, personnel requirements, systems changes and change program stratagies. These items have been summarized in this implementation plan for City Administrative Officer and City Council review. Implementation Plan Page.2 M. Philosophy of Operations The City's Mission Statement (San Luis Obispo Style) stresses service, quality and foresight. We ought to develop a clear statement of what the new Utilities Department values in its operations, consistent with the City's policy, in essence, define the Utilities Department culture. Therefore one of our first. tasks was to develop a Philosophy of Operations. A draft was written by the department's management staff and then meetings were held with staff to review and solicit comments. Those comments were included which resulted in the the final statement. Changes in an organization's culture are very difficult to implement. Fortunately, the beliefs outlined in the philosophy of operations seem to be shared by the staff. They simply have not been articulated nor written down before. Those few areas that may be a change will be gradually included in the operations over time. UTILITIES DEPARTMENT PHILOSOPHY OF OPERATIONS !� The Utilities Department strives to provide superior water and wastewater services to the citizens of the City of San Luis Obispo at a fair price. We are committed to excellence in all we do. Service to the public and professionalism provide the foundation for the department's operations. The Department serves the public by. • listening to our customers • responding to the concerns of the people • treating customers as if they have another source of our service • encouraging innovation and creativity • developing efficiency and effectiveness in all areas • keeping the operations simple • committing to continued employee development Department employees strive to maintain a high level of professionalism by. • displaying honesty, loyalty, and integrity in all activities • taking personal responsibility for our actions and our department's performance • providing a day's work for a day's pay • demonstrating individual accountability for department operations • utilizing and developing the skills of our people • exercising common sense and thought in our daily activities • establishing a climate of openness, mutual respect and teamwork • facilitating communications • exercising sound judgement in all our activities • recognizing contribution and excellence n Implementation Plan Page 3 IV. Departmental Structure As organizations grow, develop and mature, periodic review is needed to insure that the organization is operating in the most efficient and effective manner. An evaluation of the Utilities Department was undertaken to determine if the department was productive, responsive, communicative and finally, if the considerable size of the present structure affected the department in a negative manner. The organizational chart for the old Utilities Division under Public Works is shown below. ----------------------------------------------------------------------------------------- UTILITIES DIVISION Public Work•Ointtor• UtiliNos Manager• Water Conservation Co rdinetor Utilities EnglnoeP Seere ary Water Tr•arrrerrt A*rrt Water Mabibution Waeteweter Treatmeol PlanWastewater Plant Collemion System, Srrp•rvbor' Supervisor IV2)' Water Supply Supervisor(1/21' Superviggr' $PPerviser• Chlat Water Plant OP"Cre Crew Leader- Water Supply Operator 11 Chia WWiP OP•raore Utility Worker Water Laboratory Technician, Haney Equipmern Operator Wator Supply Operator I Indusblat Wale Inspector Utility Worker Water Treatment Plat Op.11 Utility Worker Water Supply Operator I WWtP'Laboratory Toch. Utility Worker Water Treamere Plant Op.,11 Utility Worker WWrP Operator I Utility Worker Water Treabrtom Plain Op..li Utility Worker W WTP Operator i Water Tteatmem plain OP.11 UUOy Worker WYM Operator 1 Water Treamem Plant OP 11 Customer Service Rep. WW Operator I Customer Service Rep. wwT Operator 1 Customer Somin Rep. Meint•narrco Worker 1 Previous Stvmum 10 key managamem and supervisory,personal' ----------------------------»------------------------------------------------------------ With a reorganization effort of this size and complexity, staff started from the ground and worked up. The first step was to establish a committee of key Utility Department personnel, who working closely with the City Administrative Officer, identified priorities and tasks. The committee also developed a strategic action plan to use as a tool during the implementation of the reorganization. V s V Implementation Plan. Page 4 A. Functional Lines The shape and structure of the organization is of the utmost importance. To fully evaluate the numerous types of complex organizational structures and determine the advantages and disadvantages, a list of criteria was established which are identified below: 1. number of organizational levels 2. levels and size 3. levels of technological expertise 4. employee attitudes 5. span of control and supervision 6. streamlined and practical 7. communication 8. accountability 9. no staffing or operating budget increases After examining all of the organizational options presented, the committee recommends that the department be structured along functional lines. The proposed organizational chart is shown below. ------------------------------------------------=------=--------------------------------- PROPOSED UTILITIES DEPARTMENT Willie.Oirectw• Secretary Utillliae Engineer• Water Oie w Manager• Waaewaar DiW.ion Manager.• Wter Conservrtlon WYer TreCnunl Plat Water Olstrlbutlen - SY Oryiepr• Waatewrtw TreetmiM Plum lWility an SMOM Cowdinrtw Supervlew• 'Supervisor• plater Supply P 'Suporvlanr• e Intluatr(al WasTeWaterVbor�TadM4lan MCN"Equipment Op.lrator Wmer Supply OFwatw II Weser Tretpmint Ptallt Op.u Utility'Worker Wrter supply Operator IWWTP tabgratory Teeh erWater Tetmalt Plait Op.II Utility Worker Water supply OPoraor 1wwry ov.rator I arWater Troatmerq Plant Op.'P Utility Wuduf — WWiP Oerator I er Wates Troatmant Plant Op.It Utility Worker WWTP Operaori Waw Troatlllent Plan Op.11 LktiNy Worker Cuatamar Service Rap. W W7p OparRor I Custgmar Sem"Rep. W Wip Operrtw 1 Cuatmliw SeMm Rep. mmm'rlalee Wprkwr I TI,Q ed structure: 9 key Management and supervisory personnel •Poskbrla rpWring naw v r imd(ob descripti.to accomodate changes in dudes'and reaponolbllities. (7 11 ------------------------------------------------------------------------------------------ V 1 Implementation Plan Page 5 This option is the most streamlined, practical and feasible. All water and wastewater functions are combined according to application. This results in a smaller, more managable span of control and communications are improved. All aspects of water including treatment, supply, distribution, and conservation will be directed by a water division manager. All aspects of wastewater including treatment, collection and source control will be directed by a wastewater division manager. Division managers are responsible for amassing and consolidating information for presentation to the director. Each division manager is held accountable for the sections in his division. The strength of the functional structure lies in the advantages that accrue from specialization. Putting like specialities together results in economies of scale, minimization of duplication of personnel and equipment, and employees who have the opportunity to talk"the same language" among peers. B. Supervision The proposed organizational structure has the Utilities Director overseeing the operation and administration of the department. He is supported by two division managers which have line responsibility, plus a temporary professional assistant, utilities engineer and a secretary as support staff. The division managers are supported by working supervisors. The line employees make up the majority of the work force for both divisions. In an effort to streamline the mid-management and supervision of the department and provide for increased accountability, we propose to combine positions and restructure specific job responsibilities. The front line crew leader/chief plant operator positions are being combined with the existing supervisory positions. These new hybrid positions will be "hands-on" working supervisors. Some of the administrative responsibilities that the supervisors originally had will be given to the new manager positions. The responsibility of the working supervisor will be to direct the daily, face-to-face, operation of their sections. The individuals selected for these positions will spend approximately twenty-five percent (25) of their time related to administrative matters. The remaining seventy-five (75) percent of their time will be spent directly involved in the day-to-day operational activities. The Division Managers will be responsible for the remaining administrative items. The committee completed a job analysis for each of the proposed working supervisor positions. This task is fundamental to identifying duties of the new positions and the needed background and knowledge required to perform these positions. To develop information about the job the following methods were used: 1. Interviews 2. Supervisory conferences 3. Time study reports This task defined the jobs within the division and the behaviors, skills, knowledge, abilities, and certification which are necessary to perform these jobs. -8 Implementation Plan Page 6 From the information gathered in the job analysis the committee developed job descriptions. The job descriptions accurately portray the proposed job tasks and responsibilities, environment and conditions of employment. The job descriptions have been reviewed by the Personnel Department to ensure they comply with all personnel rules and regulations and are consistent with City policies. Salary ranges for these new job descriptions are based on duties and responsibilities and internal alignments. The net effect on the Department's budget will be a small increase in personnel costs. The actual increase can only be determined after permanent position appointments are made. C. San Luis Obispo City Employees' Association Concerns A draft of the reorganization proposal and implementation plan was submitted to the Association for their review. They responded with a memo randum listing comments and outlining their concerns. The Associations concerns are be summarized as follows. 1. Loss of Association Positions - The proposal to combine frontline and mid management/supervisory positions while restructuring job responsibilities is a unique concept. This will result in the following Association positions being eliminated: i a. Crew leader position, distribution section _ b. Chief plant operator position, water treatment plant c. Chief plant operator position, wastewater treatment plant Because of these changes, the Employees' Association is primarily concerned with the loss of three (3) positions within the general unit; the possible loss of promotional opportunity for general unit employees; and that the department follow prescribed personnel procedures and guidelines. .2. Staffing - A number of issues• were raised regarding staffing. They included new and long term staffing needs, temporary personnel policy, adequate supervision for line staff, and the filling of existing vacant, budgeted positions. 3. Promotional Series - The Association is also interested in the development of promotional series within some of the job classifications. The Utilities Committee met with the Association representatives and reviewed the above issues and concerns. It was a very positive and productive meeting which helped to clarify a number of issues both from their perspective and the Department's perspective. The committee feels that most of their concerns were answered except those relating to the elimination of the three positions. It was also explained that some of the other issues not specifically addressed in this report are scheduled as part of the implementation plan to be resolved over the next year. �i Implementation Plan Page 7 D. Staffing Requirements Up to this point the committee has directed its primary efforts into the development of a practical streamlined structure, with an emphasis on departmental management and supervision. The key management positions have been identified: 1. Water Division Manager 2. Wastewater Division Manager 3. Water Treatment Plant Supervisor 4. Wastewater Treatment Plant Supervisor 5. Water Distribution Supervisor 6. Wastewater Collection Supervisor 7. Water Supply Supervisor Job analyses were completed and job descriptions developed. The committee, with assistance from the working supervisors will identify the needs and position requirements of the line staff, during the upcoming year. As part of the reorganization, there are no additional positions being requested. This was a condition established for formation of the new Department. Several areas where additional personnel will be required have been identified and it is anticipated there will also be more as the analysis continues. As the positions are identified, job analyses will be conducted and job descriptions developed. Once determined, the proposed positions will be referred to the budget process !� for Council review and approval. Some proposals will be ready for review during the 1989-91 budget process. Also during this process the filling of currently vacant budget positions will be addressed as will the identification of temporary personnel needs. V. Personnel In any organization, competent and productive personnel are vital. Operation and maintenance of water and wastewater conveyance and treatment systems require field staff with fairly sophisticated levels of technical and mechanical ability. Utilities Department staff must be able to function at maximum productivity using computers and high-tech instrumentation systems, as well as, handtools and heavy equipment. Field crews must be able to apply principles of engineering, chemistry and biology on a routine basis. Increasing demands on service quality and regulatory agency constraints, emphasize the need for strong managers with pertinent background disciplines and experience. The two essential elements in developing a competent and productive Utilities Department staff are recruitment and staff development. The City's Personnel Rules and Regulations will be followed in the recruitment of all positions. i Implementation Plan Page 8 A. Recruitment Philosophy The purpose of recruitment, is to select the most qualified people for the job. The most qualified person is the one that offers the City and Utilities Department the greatest potential benefit. This is the person that comes equipped with the necessary skills, abilities and initiative to help our team complete its mission. The Department will use both promotional and open. recruitment for filling postions depending on available candidates and City requirements. Finding just the right person can be a difficult task and. the first place we will look, is within the City organization. Existing staff offer the benefit of in-house experience and an individual investment in the City system and. City investment in the individual. Ideally, existing staff have personal commitments to the success of the organization. We do not, however, want to promote an employee simply .because he or she already works for the City. We will not promote or laterally transfer an employee unless that employee meets the qualifications for appointment. Longevity is not one of the minimum qualifications. We will, of course, follow the 1972 amendments to Title 7 of the 1964 Civil Rights Act. All applicants will be considered for City employment without regard to sex, race, color, creed, national origin, handicap, religion,. age or marital status. Because the Utilities Department is a traditional white male dominated profession, extra effort will be made to encourage and recruit minorities and female employees. The Utilities Department will be using the standard screening practices for determining just how well a candidate meets qualifications. That means, in rating a prospective staff member, we will use: 1. Employment applications and resumes 2. Employment history and previous job experience 3. Performance testing and pretesting 4. Oral and written interviews 5. Assessment centers 6. References, police checks and medical exams The combination.of screening practices .selected to rate an applicant, will depend on the staff level we must fill and Personnel Department guidance. For all staff levels, Utilities will use the minimum of the application, job experience, oral interviews, references, police checks and medical exams to evaluate qualifications. Additional screening practices will be used as the staff level moves up. For example,.any unskilled entry level field staff, such as Treatment Plant Maintenance Worker 1, will be evaluated with these basic practices. Other higher level staff ',positions, may have additional pretesting or performance testing included in the evaluations. i Implementation Plan Page 9 Treatment plant operators, laboratory technicians, collection, distribution and water supply system maintenance workers will also be evaluated using the basic practices, but the applicants will also be pretested before the oral interview. Plant operators must be professionally certified, and so, must display a good deal of technical expertise. Pretesting will help us in evaluating that expertise. Pretesting will also aid us in determining the skill level and technical background of water distribution and wastewater collection system staff. The Industrial Waste Inspector and Water Conservation Coordinator will be given performance testing to determine written communication skills. The inspector and coordinator both, must have excellent written and verbal communication skills. The Water and Wastewater Treatment Plant Supervisors are old titles but with a new function. They are the hybrids of the previous treatment plant supervisors and chief operators. We have taken selected duties and responsibilities from both positions and formed a new position which, we feel, will exhibit hybrid vigor. Both positions will require performance testing in written communication and supervisory skills. The Water and Wastewater Division Managers may be further evaluated in a modified assessment center. A modified assessment center is an abbreviated version of the management team's selection process. Center participants will take part in role playing, problem solving, wambuilding, or communications exercises. The assessment center will probably be limited to a one-half day session. B. Staff Development The purpose of staff development programs is staff improvement. Staff development supplements and enhances staff skills and provides staff the opportunity to further educate themselves in their employment positions and disciplines. The result is an employee who possesses the latest information and training in his or her profession. That employee can then apply the new skills in the job environment. Fresh approaches and new skills translate into improved job performance. All Utilities Department staff will participate in staff development from time to time. Because of the very technical and often dynamic nature of their jobs, some staff members will necessarily take part in training on much more routine basis than others. Staff development methods will include films, video tapes, conferences, seminars, correspondence courses, classroom sessions, etc. The City has a large library of training films and tapes and will continue to conduct classroom training and seminars on subjects from communications skills to sexual harrassment. The Utilities Department professional assistant will coordinate Department-wide training. Division managers will coordinate specific section/division training. Implementation Plan Page 10 Water and Wastewater Treatment Plant Operators, laboratory technicians and the Industrial Waste Inspector are required by the State of California to obtain and possess professional certification. Water supply staff, water distribution and wastewater collection staff are all encouraged by the City to obtain professional certification in their disciplines. Technical training in these areas will include manuals of practice, California Water Pollution Control Association and American Water Works Association conferences and seminars. Sacramento State University has developed highly praised correspondence courses in wastewater and water treatment, industrial waste inspection, wastewater collection and water distribution. It is anticipated that the new supervisory positions will require the most immediate training attention. Depending on the specific needs of the individuals that fill these positions, training may be provided in the areas of: 1. Supervisory Techniques 2. Written Communications Skills 3. Budgeting Processes' 4. Motivational Techniques -' 5. Working With Difficult Employees 6. Computer Use and Literacy 7. Employee Evaluations Division managers will receive training in teambuilding skills, written communications, employee/employer relationships, etc. As we become aware of updated and even unique areas of training, we will participate when applicable. C. Training Schedule The preliminary training schedule is: IST QUARTER 1989: 1. HOW AM I DOING? - Employee performance appraisals 2. PRESCRIPTION.FOR COMPLAINTS - Handling customer complaints 3. WHERE THERE'S A WILL Leadership and Motivation 4. HOW TO DELEGATE - Supervisory delegation 5. CREATING TEAMWORK - Team development. 6. CWPCA TRAINING SEMINAR - Wastewater disciplines 7. STATE OF CALIFORNIA WASTEWATER LABORATORY SESSION Implementation Plan Page I I 2ND QUARTER 1989. 1. DEALING WITH DIFFICULT PEOPLE 2. ETHICS TO EXCELLENCE 3. IMPROVING MANAGERIAL PRODUCTIVITY 3RD QUARTER 1989- 1. ACHIEVING EXCELLENCE 2. SELF ESTEEM AND PEAK PERFORMANCE 3. PUBLIC SPEAKING 4. AWWA CONFERENCE 5. CWPCA CONFERENCE 4TH QUARTER 1989. 1. BUSINESS WRITING SKILLS 2. POWER COMMUNICATION SKILLS 3. TIME MANAGEMENT 4. MEASURING THE RESULTS OF TRAINING A continuous program of upgrading employee skills and development is planned. The dynamic nature of Utilities Department business, demands that staff stay current and innovative in _ their disciplines. As the demand on water and wastewater services increases, staff must adapt and comply. Comprehensive training programs certainly will aid us in sustaining top-flight service.. VI. Systems With any reorganization comes required changes in the different systems that are in place for the normal day to day.operations. These systems include the City Codes, financial and budget reports, policies and procedures and miscellaneous reporting and informational systems. A. City Codes The City ordinances and codes will require a thorough review to determine where changes need to be made with reference to the Utilities Department. Some of the references will be easy to identify when it is simply a matter of changing references from the old Utilities Division, Utilities Manager and Utilities Engineer. A more thorough review may be necessary when other positions and departments are involved. Implementation Plan Page 12 The City Code is revised once a year in the summer. It is proposed that between now and the next revision date that the changes be identified. In the interim period responsibilities and duties will be administratively transferred to the appropriate position or department. Any confusion will be resolved by the involved parties and the City Adminsitrative Officer, if necessary. B. Financial Systems Since the Utilities Division operated as an enterprise under the Water, Sewer and Whale Rock funds, it will make the transition relatively easy.. All the accounts currently in use will continue through the end of the fiscal year including charges for Public Works Administration. Some minor modifications will be made in the interim to identify the new department. The new 1989-91 Financial Plan will include Utilities as a department. This will only require some minor editing changes. C. Policies and Procedures Most policies and procedures will not require extensive revisions. Primarily, editing to update references to the new department will be needed. The San Luis Obispo Council and Management Polices and Procedures and the Public Works Policies and Procedures are the two key documents which direct Utilities operations. In the interim these existing policies i and procedures will continue to be in effect. Major changes in these areas are not expected. Revisions to the policies and procedures manuals are done on an as-needed basis. While this is not the highest priority, it is anticipated that the revisions will take place during the next year. . D. Inter-Departmental Systems There are many existing reporting and informational systems used on a daily basis. Most of those will continue to be used. It is not anticipated that there will be major changes in the responsibilities and reporting relationships between the new department and other departments within the City. The same basic functions will continue to be as before, including those areas where the Utilities Division shared personnel, facilities and duties. Implementation Plan Page 13 VII. Implementation Plan Once Council approves staffi recommendations then the implementation plan can proceed in a timely manner. A number of tasks and activities have been identified and must occur over the next year in order to complete the reorganization. This summarizes those activities and provides a schedule of when those activities will take place. 1st Quarter 1989 1. Begin personnel recruitment to fill newly approved positions. 2. Review staffing needs of the new Utilities Department and develop position justifications for inclusion in the financial plan and budget process. 3. Develop new Utilities Department Budget including revisions to budget documents. 4. Establish management and front line supervisory staff requirements and begin training programs. 5. Begin system reviews and modification. 6. Develop line staff task and responsibilities analysis. 2nd Quarter 1989 1. Finalize any personnel selections that may have not been completed J during the first quarter. 2. Review with Council the proposed financial plan and budget for their approval. 3. Continue staff development and team building concepts: including communication skills. 4. Continue systems reviews and complete City Code review for approval and inclusion in yearly City Code update. 5. Prepare line staff job descriptions and recommended modifications. 6. Evaluated the concept of the promotional series. 7. Meet with line staff to review reorganizational status success and failures. 3rd Quarter 1989 1. Begin personnel recruitment of new postions that may be approved in the 1989-90 financial plan and budget. 2. Continue staff development. 3. Continue systems reviews. 4. Meet with the Employees' Associations to review status of reorganization and discuss any concerns. 5. Complete line staff recommendations including promotional series and present for action. Implementation Plan Page 14 4th Quarter 1989 1. Continue staff development. 2. Continue systems reviews and complete Policies and Procedures Manual updates. 3. Re-evaluate Department progress. Identify changes or operational modifications. 4. Meet with line staff to review reorganizationl status success and failures. VIII. Recommendations Staff recommends that Council take the following action by motion: 1. Approval structure along functional lines. 2. Approval key management positions. 3. Approval implementation plan. \ J reorfair/ I / e MEETING DATE: 111jj1,NIIVIII���I�Ihallyl�� city of Still LUIS OBISPO J August i r989 ITE UMBE MaZe COUNCIL AGENDA REPORT = _ I FROM:MOMO John Dunn, City Administrative OfficeY t SUBJECT: Reorganization of Utilities Division into a separate department. CAO RECOMMENDATION: Adopt resolution approving the establishment of a Utilities Department. BACKGROUND: BACKGROUND: The City has been considering the creation of a separate department of Utilities as a more efficient and effective means of successfully accomplishing its water and waste water goals and objectives since the early 1980's. In fact, a formal evaluation was listed as an objective in the 1987-89 Financial Plan. Historically, this division has operated more as an independent division within the department and City organization than have other division level work units. Organizational structure should, ideally, enhance both performance and productivity. Clearly, no one organizational structure is best nor is a structural change a panacea for all current and future organizational problems. However, in our current organization, I believe a separate utilities department will best meet the City's needs for the reasons cited below. I. Sim scope and functional independence of operations. I The utilities operations, both water and sewer, have reached a size which would justify an independent department. With respect to water, the City is responsible for water supply, conservation, water treatment, water distribution, customer services and related administrative and engineering functions. On the sewer or waste water side, we perform a variety of services including collection, transmission, treatment and various inspection and regulatory services. Currently, there are 38 permanent employees within the Utilities Division, 22 within the water operation and 16 employees in the waste water treatment plant and sewerline maintenance operations. The annual operating budget of the utilities function is $5.4 million and the. capital budget for this year is $4.0 million. Prospective capital improvements for the sewer plant, sewer collection system, correction of the inflow and infiltration problem, and water plant and waterline improvements total in excess of $30 million over the next five years, which is a far more aggressive and ambitious capital program than for any other operation of the City, including the Public Works Department (without utilities). Based on number of employees and size of operations budgets, this new department would be the fourth largest in the City, after Police, Fire and Public Works. These various functions arc closely related internally, but only loosely related to other public works functions such as streets, parks and engineering. While shared professional and clerical staffs made sense when the required work force and work load were less, the need for support staffing dedicated solely to water related functions has been a reality for some time. G-/ �t c� o Vlililydlll city o� San o B s p MOZe COUNCIL AGENDA REPORT Page 2 2. City-wide policy implications gf water and waste water operations. Water and waste water issues have become a dominant policy area for the community. The central issuc currently being addressed in the General Plan revision process is community growth and development, which includes decisions on appropriate boundaries and annexation policy. Resource management and resource constraints, including water supply and waste water collection and treatment capacity, are major portions of that dominant issue. I Major decisions in regard to water supply and waste water collection and trcatmcnt will have to be made in the months and years ahead. These decisions will carry with them major financial and rate implications. It is important that these issues be centralized in one department, so that department will have the highest degree of accountability for I what is taking place. In this important realm, a less certain or more defused j accountability could produce negative consequences.. Utilities in an enterprise (self-supporting) fund. It calls for continuing cost analysis and greater communication with an accountability to the Council and public.about prospective rate increases. 3. Responsive. focused. manageable operation. Certain substantial management issues can be better addressed if the utilities function is converted into a separate department. At the present time, the Utilities Division is operated by a division head, who reports to the Director of Public Works, who reports to •. the City Administrative Officer, who reports to the City Council, which in turn is accountable to the community and the citizens. Certain positive changes can be facilitated by shortening the "chain of command" and restructuring functional areas of responsibilities. Perhaps the single greatest potential benefit is "unity of direction" through a department head reporting directly to the CAO, rather than a --' sometime-perceived duality of direction under a Department Head and Division Head. A substantial management benefit of reorganizing the utilities function into a separate departmental operation is that there will be one department head in charge with the division managers reporting directly to him, giving.him an opportunity to establish clarity of purpose and direction, and priorities, and giving them the ability to manage all related functional areas. There will be an improved opportunity for utility priorities to be established on their own merits, rather than competing (or perceived to be) with other high-priority Public Works operations. The current organization requires the department head to have an i extensive "span of control" over multiple and diverse operations. Several priorities of the other operations, such as the adequacy of a proper circulation system and well-maintained streets and storm drainage, and the adequacy and maintenance of our parks system are major community priorities in themselves. Eliminating utilities from the Public Works Department presents opportunity for increased attention to other matters that are of paramount consequence to the community. As stated, this is not a new consideration, but was discussed by Paul Lanspery with the then members of the City Council. Because the City, at that time, was concerned with other matters, this issue did not then have the importance that it has assumed today, and was not pursued at that time. I �V City Of Sat t LUIS OBISPO NiiN COUNCIL AGENDA REPORT Page 3 We did survc.y the existing organizational arrangements in a sample of other California municipalities. Most other cities do not manage or provide the full water and waste water services that we do. The more utility functions done by a City the more likely it was to have a utility department and the larger the City the more likely it was to have a utility department. In the LA and Bay area many cities are provided either water or sanitation j services through mega-district operations. I i In discussions with staff, we agree that a planning and phasing period is an integral and necessary part of the reorganization effort. The department will be better structured if an assessment of current and ongoing needs, priorities, goals and resources is accomplished and a departmental structure is developed that best meets this goal. This requires both a significant commitment of time and the active involvement of our key utility mid-managers if it is going to be successful. It will be a challenge to the creative, analytical and planning skills and abilities of the participants. We feel that such an effort and commitment should only be undertaken once the Council has approved the creation of the department. i This reorganization is not intended to require any additional supervisory and managerial personnel due to the change from a division to a departmental status nor will it increase the number of positions on the management team. A reorganization of the mid-management structure and position responsibilities and minor salary changes are anticipated. However, I this would be recommended in any event to provide a more integrated, accountable and more responsive utilities organization. Additionally, due to the projected workload, some additional technical and professional positions may be identified as necessary to complete the workload requirements. Again, these would be requested in any event. Costs directly j attributable to reorganization will be limited and minor compared to expenses associated with expanding utilities operations and capital programs or with the costs of failing to address current organizational issues. The interim reorganization efforts will enhance our ability to address long term needs in a systematic fashion. We are leaning towards a departmental structure that closely ties all water related services and all waste water related services within two divisions. This type of functional organization can best identify and correct problems of mutual concern that may otherwise appear to fall between work units. Follows is an outline of the proposed timetable for implementing the organizational change. i i a - 2 �l�u�!�tu!�il!INIIP1lh city of san os�spo COUNCIL AGENDA REPORT Page 4 TENTATIVE ACTION TIME SCHEDULE ACTION WHO DATE Approve creation of department and transfer of Council 8/88 water and waste water functions to new dept. (by resolution) Appoint Utilities Manager as Utilities Director CAO 8/88 Create interim water and waste water divisions Util. Dir./CAO 8/88 and appoint treatment plant supervisors as interim division heads during 8/88-1/89 transition phase Develop organizational change skills and abilities Util. Dir. & 9/88 Div. Mgrs. Identify critical organizational needs, goals, key Utility Team 11/88 functions, and existing and desired resources Div. Mgrs. i I Develop one year implementation plan for 1989 and Utility Team 12/88 present to CAO and Council for review i Adopt resolution approving changes in personnel Council 12/88 (classifications, pay ranges, etc.) FISCAL IMPACT: The establishment of a Utilities Department does not require additional funds or positions. I SUMMARY RECOMMENDATION: The current organizational structure is no longer the most useful in providing Utilities in an efficient and effective manner and the demands on the system are anticipated to j increase. I recommend Utilities be made a Department and that key departmental personnel be given the training and opportunity to design and implement an organizational structure that provides a responsive, accountable, manageable and efficient operation. Council will be kept informed of the progress and requested to take action as needed. i --