For the past few years the City administration has used the traditional budget balancing methods of reducing capital expenditures, eliminating training budgets and reducing general operating expenses. There have been a significant number of staff reductions including eliminating positions, resignations and retirements. But the administration has run out of quick fixes.
There have been calls to use the City's massive reserves to defray operating expenses, but Mayors and City Councils have generally shied away from this as a bad business practice since it really just pushes the problem down the road.
The private sector for decades has used a combination of plans to incentivize people to leave the payroll. These plans allow those at or near retirement to leave early or if they have just been hanging around, like a lot of City employees, it encourages them to leave.
Three steps To Transforming the City Administration
1. Determine the total amount of savings necessary to bring both the 2013 and estimated 2014 budgets into balance.
2. Look at the entire MANAGEMENT team and reduce the number of supervisors and managers, Majors, Captains, Assistant Chiefs, District Chiefs and administrators to meet that goal. As a general rule of thumb reduce:
- 2 senior administrators, and their support staff such as secretaries and assistants.
- 1 manger in every 5 and their support staff such as secretaries.
- 1 supervisor in every 8.
- Public safety must participate but only with senior staff such as Assistant Chiefs, District Chiefs, and Majors, Captains, and civilian managers and supervisors.
- Once identified these people must leave the organization.
- No cut and shuffle leaving them hidden away on the payroll.
- Put together a viable incentive program that adds significantly to the normal termination pay and will encourage people to leave.
- Don't worry about people walking away with large sums of money. This thinking is a holdover from the David Fisher Administration and is last century's thinking .
- These payouts are investments in the City's future .
- Identify those whose positions are being cut, inform them of the decision, and they will have 1 month to take the incentive package or simply be removed from the payroll.
- Take whatever amount is necessary to fund the incentives and termination pay from the reserve funds.
- This approach creates permanent solution to the problem, blunts the argument against using reserve funds, because this program is a onetime effort that resolves the budget problem going forward .
- The pay back on this investment should be 100% in less than three years.
- Do not hire a consultant to study or do this - just do it.
- Maintain a hard hiring freeze for at least 24 months.
Draconian? Insensitive? Uncaring? Perhaps. But if Bill Foster had had the courage to take similar steps when he came to office, there is a good chance the budget would be balanced and maybe even running a slight surplus.
Two administrations, Baker and Foster, have tried to wait this thing out hoping something magical would happen. There is no magic bullet, it's time to act.
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