HomeMy WebLinkAboutStaff Report 118-06TO:
FROM:
HONORABLE CITY COUNCIL
CITY MANAGER
7
DEPARTMENT: ADMINISTRATIVE
SERVICES
DATE:JANUARY 23, 2006 CMR: 118:06
SUBJECT:POLICY AND SERVICES COMMITTEE RECOMMENDATION
REGARDING COUNCIL REVIEW OF RESPONSES TO AUDIT REPORT
RECOMMENDATIONS ON RESTRUCTURING EFFORTS AND
MANAGEMENT SPAN OF CONTROL
RECOMMENDATION:
The Policy and Services Committee recommended that staff return to the full Council prior to the
2006 budget process with Restructuring Efforts and Management Span of Control, Items.2, 3 and 5.
Staff recommends that the Council review the City Manager’s response to the aforementioned audit
recommendations, contained in this report, and provide comments as appropriate.
COUNCIL REVIEW AND RECOMMENDATIONS:
This report appeared on the December 12, 2005 Council agenda under consent.
with the original report to allow- for further Council discussion.
Staff is returning
PREPARED BY:
DAVID RAMBERG
Budget Manager
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
ATTACHMENTS:
Attachment A: CMR 453:05
CARL YEATS
Director
EMI~-"~ HA~O~-
Assistant City Manager
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TO:
FROM:
ATTACHMENT A
City of Palo Alto
City Manager’s Report
HONO1L~BLE CITY COUNCIL 2
CITY MANAGER DEPARTMENT: CITY MANAGER’S OFFICE
DATE:
SUBJECT:
DECEMBER 12, 2005 CMR:453:05
POLICY AND SERVICES COS~MITTEE RECOMMENDATION
REGARDING COUNCIL REVIEW OF RESPONSES TO AUDIT REPORT
RECOMMENDATIONS ON RESTRUCTURING EFFORTS AND
MANAGEMENT SPAN OF CONTROL
RECOMMENDATION
The Policy and Services Committee recommends that staff return to the full Council prior to the
2006 budget process with Restructuring Efforts and Management Span of Control, Items 2, 3 and
5.
Staff recommends that the Council review the City Manager’s response to the aforementioned
audit recommendations, contained in this report, and provide comments as appropriate.
COMMITTEE REVIEW AND RECOM-MENDATIONS
On September 13, 2005, the Policy and Services Committee reviewed and discussed the
Auditor’s Report on the Status of Audit Recommendations. The report summarized the status of
recommendations from 13 separate audits, two of which were reviewed by the Policy and
Services Commit3ee and 11 by the Finance Committee.
There was some discussion among the Policy and Services Committee members about whether
the Audit of Restructuring Efforts and Management Span .of Control should be reviewed by the
Policy and Services Committee as opposed to the Finance Committee. After further discussion,
the Committee recommended that staff bring portions of that audit before the entire Council. The
Committee expressed a specific interest in Items 2, 3 and 5 from the Audit of Restructuring
Efforts and Management Span of Control.
The text of the audit recommendations is as follows:
Item 2: Restructuring efforts should focus on identi~Ting w-ork that could be streamlined, and
consolidating duplicative processes and functions. Restructuring proposals should carefully
consider the full cost of staffing changes that may be involved, and the potential for alternative
service delivery through outsourcing and public-private partnerships.
Item 3: The City Manager should set clear definitions, guidelines, goals and targets that result in
expanding the supervisory" span of control and decreasing the ratio of supervisors to line staff.
CMR:453:05 Page ! of 3
Item 5: The City, Manager should establish guidelines, goals and targets for reducing th~ layers
of management.
The City Manager’s response to this recommendation is part of a proactive, ongoing internal
effort to address restructuring and management span of control issues within the organization. In
the 2005-06 budget, this effort resulted in the elimination of 30 positions from the General Fund
table of organization. This followed an earlier round of cuts where 40 positions had been
eliminated since 2001-02. The elimination of 70 total positions has brought General Fund
staffing levels down to 1998-99 levels. This represents nearly ten percent of General Fund
staffing being eliminated in this period with the majority of those positions coming from
management and administrative support. As a resul.t., staff has restructured reporting relationships
resulting in an increased span of control in the organization. Staff estimates that 130 direct
reporting relationships have been restructured around eliminated positions. In the Community
Services Department, for instance, seven key management positions have been eliminated in the
past two ?’ears, representing the restructuring of an estimated 60 reporting relationships and the
expansion of span of control.
DISCUSSION
With its ongoing efforts to focus on management span of control, staff plans to address the !7
recommendations in the management span of control audit. Staff will address the
recommendations through a number of adjustments to business processes and ,,’,,ill report to
Council on the results of this effort during the 2006-07 budget process (Spring 2006) as well as
with the annual report on the status of audit recommendations (Fall 2006).
For the purposes of this report to Council the following discussion pertains to the approach staff
will take to address audit recommendations 2, 3, and 5 specifically. Individual steps of the
approach outlined below will also be used, in some form, to address the remainder of the 17 span
of control audit recommendations.
During the 2006-07 budget process, to address recommendation 2, each department will be asked
to review their departmental organizational charts and business operations. Departments will
analyze short-term, medium-term and long-term opportunities to expand the span of control and
reduce layers of management through restructuring. This review will also look at streamlining
processes and functions as they relate to the departments restructuring objectives. In addition,
potential alternative service delivery, means will be considered such as outsourcing and public-
private partnerships.
To address recommendations 3 and 5, staff will establish guidelines along with a process through
which department span of control is reviewed on a regular basis to identify, opportunities to
expand the span of control and to establish a baseline target for the ratio of supervisors to line
staff and layers of management. A part of this process will include the ongoing review and
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updating of department organizational charts showing reporting relationships. Review of
organization charts will be incorporated into the 2006-07 budget process and will also occur
when staff is replaced.
POLICY IMPLICATIONS
This recommendation is consistent with existing City policy.
PREPARED BY
CITY MANAGER APPROVAL
Davi@amberg, Budget Manager
~nsen,d~ssistant to the Cit?, Manager
Emil~rri;on,~s sis~anager
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