HomeMy WebLinkAbout9.B. Organizational Structure Study General Business 9. B.
SHAKOPEE
TO: Mayor and City Council
FROM: Kris Wilson, Acting City Administrator
DATE: 02/03/2015
SUBJECT: Organizational Structure Study (F)
Action Sought
The Council is asked to discuss and provide feedback regarding a study of the City's
organizational structure that is currently underway.
Background
As part of the City Hall Feasibility Study authorized by the Council in August of
2014, staff has been working with David Unmacht of Springsted to conduct a
high-level organizational study. The original purpose of the organizational study
was to help estimate future growth in the City's staff and structure so that any
proposed new or remodeled City Hall could be sized to meet the City's needs well
into the future. However, as the months have gone by and the City has been faced
with both planned and unplanned staff turnover, this organizational study has taken
on an even greater importance.
Mr. Unmacht will be at the Council meeting to present some initial findings and
discuss several potential options for an organizational structure to meet the City's
needs now and into the future. Council will be asked to discuss and provide general
feedback that will guide the next steps in the process, however no formal action is
being requested.
'i ✓
SFIAKOPE F
City Council Work Session
Presentation of Organizational Options
February 3, 2015
David Unmacht
Springsted Incorporated
City of Shakopee,Minnesota-City Council Work Session Page 1
Background
The City of Shakopee retained BKV Group to conduct a Master Facilities Study in the fall of 2014.
Springsted was brought on the team to support the analysis and to partner with the City and BKV to
identify opportunities, as part of the facilities planning, for organizational development. The primary
consideration in this study was organizational design and structure. The essential question being:
What is the optimal organizational structure needed to support the City's vision and goals?
City Council and staff deserve credit for recognizing the need to evaluate the organizational structure, not
only in a facility planning dimension, but also in the dynamic life of this community. The City is one of
the fastest growing municipalities in the region and state and professional estimates anticipate a
population approaching 40,000 by 2020. This results in almost doubling in size from a population of just
over 20,000 in the year 2000.
City governments in Minnesota are addressing a multitude of complex simultaneous challenges including
identifying efficient and effective delivery systems, meeting citizen expectations, and sustaining and
maintaining needed and mandated programs and services. For the City of Shakopee, this scenario is
under the backdrop of a fiscally conservative culture.
Conventional wisdom, local practice and recent experiences reflect that city governments cannot continue
to perform operations and business practices in the traditional methods. The City of Shakopee has joined
with other cities throughout the state by asking important questions and delving into issues and long
established business practices. Raising these questions and probing into historical business practices is
not easy nor does it result in quick changes. Within the City of Shakopee these actions are largely driven
by current and upcoming changes in the city staff and in the need to prioritize capital and facility
improvements.
The business of managing city government today is very difficult. City leaders are under great pressure to
deliver value within a constrained financial and economic environment. New resources are either limited
or there is much competition for where they should go. To be successful in this environment, city
officials must recognize these variables, manage them accordingly and introduce creative ideas to move
the organizations forward.
Top Immediate Priorities in Organizational Design
Singularly each of these below are relevant considerations, collectively they present challenges, but also
great opportunities for the City.
• Change in the City Administrator
• Upcoming departure of Finance Director/City Clerk, future retirement of Public Works
Director/City Engineer and current vacancy for Building Official and IT Director
• Inefficient space allocation
• Decision to locate city facilities
• Competing priorities for operational and capital dollars
• Traditional workplace culture
City of Shakopee,Minnesota-City Council Work Session Page 2
City Council
One source for direction and consideration in organizational design is the policy and direction of the City
Council through their foundation positions (vision, mission, strategies, goals, etc.) A quick summary of
each offers a succinct conclusion.
Mission
The mission of the City of Shakopee is to provide the opportunity to live, work and play in a community
with a proud past,promising future and small town atmosphere within a metropolitan setting.
Strategies
The following five strategies reflected on the Council agenda and used in the City include:
• Keep Shakopee a safe and healthy community where residents can pursue active and quality
lifestyles.
• Positively manage the challenges and opportunities presented by growth development and
change.
• Maintain the City's strong financial health.
• Maintain improve and create strong partnerships with other public and private sector entities.
• Deliver effective and efficient public services by a staff of well-trained, caring, and professional
employees.
Goals
The 2014-15 City Council set five overarching organizational goals for the City. These goals will be used
to direct policy for the City:
1. Foster the creation of the unique historic downtown corridor as a destination for economic
viability and livability.
2. Follow consistent practices for consideration of economic incentives to provide opportunities to
work in Shakopee.
3. Plan for and adequately fund infrastructure and asset needs.
4. Create or amend City documents that are concise,use plain language, and are accessible to all
5. Create efficiencies through a culture of technology and training, which expects continuous
improvements and no less than the highest levels of customer service.
Even though the practical application and effectiveness of the mission and strategies may be limited,they
remain prominent on your website and materials; as such they cannot be ignored.1 Within each there are
no direct and specific references to organizational design, there are correlations within several of the
strategies and goals that provide a good base for reviewing and evaluating "how" the City provides
services. Most noteworthy are goals three and five.
1 It is certainly advisable if these statements are not effective to update them in the future.
City of Shakopee,Minnesota-City Council Work Session Page 3
Best Practices in Organizational Design
When evaluating or considering a redesign of a public sector municipality, it is appropriate and important
to consider best practices and guiding principles in your consideration. The information below is
designed to help you consider and discuss your options.
In practice, a design or redesign of structures is intended to increase coordination and integration of
services, to combine similar functions, and/or to alter the present span-of-control environment. Cost
savings are often a desired outcome,but experience has shown that this should not be the sole determinant
or consideration. It is also important to note that in many cases, there is an up-front investment of
resources required to merge, create or change an underlying structure. This is especially valid if an
underlying structure has not been altered in some time As you consider your options, these
considerations should be included in your thoughts.
In making your decisions, consider whether the reorganization will accomplish the following:
• Improve integration and coordination of work in units that share functional areas.
• Rectify situations where span of control is unequal or inconsistent.
• Provide consistent focus on community,organizational and strategic issues.
• Repair existing structures which do not meet current expectations, standards or trends.
• Enhance the level of organizational consistency in policy,operations and culture.
Similarly,as you seek to find the best option,there are five considerations to avoid or be cautious of
• Reorganize work around current personalities.
• Reorganize out of convenience, as opposed to logic and anticipated outcomes.
• Reorganize around historical conflicts or problems.
• Reorganize to consolidate control and power or to take it away.
• Reorganize believing that restructuring by itself will fix organizational issues.
Catalysts to changing structures often come in several forms:
1. A change in personnel(especially top leadership or senior management)
2. A facility/space change(new or renovated building)
3. A change in policy from the City Council(new strategies or goals)
4. A change in service philosophy(from a two to one stop model)
It is not uncommon for public agencies especially city governments to have several motivations at work at
the same time and that is certainly the case in Shakopee. We believe the City has the right motivation and
motivations for a change in the design of your organization. The departure of the City Administrator and
changes in senior management make this discussion timely and very important.
City of Shakopee,Minnesota-City Council Work Session Page 4
Findings
The introduction of Findings establishes a baseline set of facts that are considerations for organizational
design. The Findings are based on interviews with the City Council and city staff and information
learned in the process. A few observations about the use and value of Findings are important.
1. An individual views his/her world through their own set of eyes, experiences and perceptions. No
set of Findings can accurately describe any one individual's perspective.
2. Findings are an aggregation of ideas,thoughts,inputs,in a point in time.
3. Findings are not in any ranking or order of importance, but attempts are made to organize them in
a logical sequence.
4. Findings are often viewed as either obvious or already known. A common response is "Yes, we
already knew that." This is unavoidable as Findings seek to portray facts and conditions through
the study authors,who by design are objective and unbiased.
The following brief set of Findings support the consideration of alternative design options:
• An organizational structure represents how the City wants to design its delivery system. Any
number of structures can work. It is essential to recognize that the implementation of a new
structure is as much a change management process as it is a policy action. Selecting an
Administrator who is responsible to implement and integrate the design is the top immediate
priority of the City. This individual will be responsible for change management which is a
deliberate and intentional process to integrate systems, cultures and processes.
• The City Administrator is the most important position on the staff. This person sets the tone,
implements Council policies and leads the entire organization. The bedrock of your preferred
structure is based on what knowledge, skills, and qualities you want in this individual.
• The current organizational structure has 10 direct reports to the City Administrator; ideally, this
number would be between six and a maximum of eight. The more direct reports to the
Administrator, the more the individual has to spend time on department or functional specific
activities; it is recommended that the City Administrator focus his/her time on the City Council
relationships, organizational priorities and strategies and external collaborations and community
relations. The larger the City of Shakopee becomes the greater expectations in these areas.
• It is timely and important to identify the role and expectations of the new City Administrator.
The pressures and demands are high and City Administrators have significant responsibilities to
the organization,to the City Council and to the community(citizens, stakeholders,other agencies,
etc.). Identifying priorities is important to both the search and the organizational structure.
• In public agencies there are four foundational elements that drive short and long term
organizational success. They are the support departments of administration, human resources,
information technology and finance. I have found in my studies and workplace evaluations that
there is a correlation between high functioning and low functioning organizations with one of the
leading indicators being the level of investment in human resources and information technology.
These two areas provide support and are essential components of every department's work and
that investing in them is investing in all of your services including police,fire,public works,etc.
o Consideration must be given to providing more resources to information technology and
human resources as the organization grows.
City of Shakopee,Minnesota-City Council Work Session Page 5
• It is important to develop a culture and create opportunities for leadership development across the
entire organization, but particularly at the supervisory level. Leadership development must be a
first step; this will ensure that the desired culture and values are carried through throughout the
entire municipal government. Communicating leadership expectations of supervisors and
managers and provide the right training and development will support the culture change and
transformation of the City's workplace.
• There is not a consensus on the efficiency and effectiveness of the current delivery system model
and whether the City should move to a one campus model or retain decentralized facilities.
• The present City Hall has limitations and in and of itself is not a viable long term solution to
accommodate programs and services with a population of 40,000.2
• In my interviews with the City Council five primary facility and service objectives were
articulated:
o Maximize the use of technology
o Provide optimal customer service
o Ensure efficient service
o Break down organizational silos
o Address security concerns
• It is important that the City Council identify the level of priority for these five areas. They can
and should serve as a guide for the design and the work of the incoming City Administrator and
his/her team.
• There are limited resources and the City Council will have to prioritize improvements; it is
advisable to plan for all of them in a capital improvement strategy.
• The city's population growth will drive an expansion in staff and services. The design should be
considered for your anticipated population growth and not for your present size.
o Implementation of design can be phased in over time and does not have to be set in place
immediately. The Council can establish the long term vision and then as changes are
made the staff can move the structure along accordingly.
• The City has a strong and proven track record of partnerships and collaborations.'
Design Options
There is no one single design for city government that fits neatly into a plan that can be replicated or
reproduced for simplicity or ease of implementation. Each City is different, distinct and unique in its
culture, history, traditions and practices. Changing an organization's underlying structure is a major step
for a public agency. It also does not come without some level of angst and anxiety; that is natural. But it
is a necessary step to stay relevant and current.
The goal of introducing several concepts is to enlighten and educate the Council on ideas and alternatives.
The following five options are not the only choices for the City, but represent a perspective of
considerations and choices. These options are not prioritized and without recommendation. They will be
introduced and discussed at the February 3 meeting. If the City Council has other ideas or suggestions it
is timely to introduce these at the meeting.
2 This point is being studied by BKV and work has already begun.
3 Although this experience may not drive organizational design,it is a consideration in how services are provided
and thus an important consideration.
City of Shakopee,Minnesota-City Council Work Session Page 6
Current Design
It is entirely within the City Council's purview to determine that the existing option is best for the long
term. You are not obligated to change and given all considerations may believe that the existing structure
can work for the City as the population and organization grows. This is essentially the no build option.
The existing structure represents the"traditional" design with all major functions reporting directly to the
City Administrator. If the existing structure remains it will be essential that the City Council support and
endorse operational and cultural changes in order to achieve your objectives.
Option One
The main features of Option One are the consolidation of administrative support functions and physical
functions into two larger divisions. This option aggregates "like" functions into common groupings thus
reducing silos and encouraging greater cultural integration and workplace efficiencies. The net effect is to
remove from the City Administrator's primary responsibility some of the larger day to day functions of
city government. In growing and developing cities it is imperative that the functions that work with the
land, development and infrastructure work closely together. In addition, the same point is true for major
support functions. Having all of the administrative functions working in tandem in the same culture and
with common values is key to providing valuable support to the entire city organization.
Option Two
The main feature of Option Two is to reflect the importance that some operational functions may not be
preferred to be aggregated with other components. The Finance function is the most obvious and clear
selection. The City Council may determine that the Finance function is too important to include within a
larger group.
Option Three
The main feature of Option Three is the integration of the public safety functions of police and fie. Other
choices can be made about physical and administrative functions,but this model introduces the concept of
a unified public safety delivery system.The combination of police and fire services into a public safety
group does occur; it is essential to have the right leadership and value systems to ensure its success.
Option Four
The main feature of Option Four is to continue the unified public safety delivery system, but also to
reflect the other choices you have with respect to the major services within the two larger groupings.
Again, in this option showing the Finance function independent. The only other two that could possibly
be considered are human resources and information technology; however, in the City's present structure
these two functions are not in a position to become a depail"nent or a direct report to the City
Administrator.
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There are other iterations of structure,but essentially would be derivatives of these main options.
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City of Shakopee,Minnesota-City Council Work Session Page 7
For simple comparison purposes we are including three other city business models: Lakeville,
Minnetonka and Apple Valley. You can see from these three charts how distinctive other cities are.
Next Steps
The City Council is being asked to consider alternative organizational designs. The staff recommends
that the Council discuss and provide direction on which option(s)you prefer and request additional study
and details. Each option will require additional study and costing, as such, the staff is asking the Council
for direction to narrow the number—or introduce new ideas—that can be further evaluated and presented
to the City Council in the future.
City of Shakopee,Minnesota-City Council Work Session Page 8
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