Shrinking City Government
How Ann Arbor cuts its staff
"When I was elected, I could see that the city had built up too many employees in the '90s," says mayor John Hieftje. "Take safety services. The police had more officers in 2000 than they did in 1991, and this was after the university had started its own police department. And that's just one example from across the whole city. I recognized that this was an unsustainable level going forward."
City council agreed, and soon after Hieftje took office in 2000, Ann Arbor started shrinking its government. The mayor takes credit for having the idea, but gives former city administrator Roger Fraser credit for implementing it: "Roger did what council told him to do, and he did a good job."
Fraser certainly did a thorough job. From 2001 to 2008, the city went from 1,005 to 823 full-time positions, an 18 percent reduction. Then the economy crashed, taking property tax revenues down with it. By the start of 2012, the number of "full time equivalents" (FTEs) fell to 706. That's 299 fewer positions, or 30 percent of the city's staff, in a decade.
In raw numbers, almost every department lost, but some lost more than others. The police department went from 244 to 164 positions, 33 percent of its FTEs, and fire went from 126 to eighty-two, a 35 percent drop. But while the public safety departments lost the biggest numbers, others lost even more in percentage terms. Planning and development went from thirty-five positions to twenty-two, down 37 percent. Parks and recreation dropped from thirty-five FTEs to twenty, a 43 percent loss. Wastewater treatment shrank 44 percent, from sixty-three jobs to thirty-five.
The mayor and city council cut their own staff by 50 percent--but they had only 1.5 FTEs to begin with. Hardest hit of all were procurement and risk management. With most procurement now handled by the operating units, that department was all but eliminated, shrinking from six full-timers to one. And risk management was eliminated, going from
four full-timers to one part-timer working under the city's chief financial officer.
The staff cuts let the city balance its budget despite soaring health care and retirement costs and falling state and federal funding. Unlike Flint, Detroit, and even, Hieftje suggests, Ypsilanti, Ann Arbor is in no danger of being taken over by a state emergency manager.
Even with 30 percent fewer employees, the snow still gets plowed, the grass still gets mowed, and the phones still get answered. The snow gets deeper, the grass grows longer, and some calls may go to voicemail--but overall, it's amazing how little impact the cuts have had on Ann Arborites' lives.
After examinations of police and fire staffing last year (Observer, May and December 2011), this story looks at how the changes played out for a couple of less familiar but no less necessary city services: field operations and planning. Both gained responsibilities even as they lost employees, forcing them to do more with less. And they did--but at what cost?
"When things go to hell," says sanitary sewers supervisor Dan Wooden, "I can grab guys, because we all work together. Like when we were plowing snow one day because they needed us to, and we found a twelve-inch water-main break on Packard. So I grabbed six guys and did the repairs, and we ended that day back on the plows."
That flexibility is a big part of how field operations has kept the city's infrastructure functioning even as its workforce shrank. "We're responsible for everything between the edge of one sidewalk to the other," says manager Craig Hupy. "We maintain the water and the sanitary sewers, the street trees, the street lights, the traffic control signals, and we do street maintenance and the fiber optics for some of our core services--network connectivity, email, and traffic signals. We maintain the parks and do all the mowing of parks and city grounds. And we do trash collection, residential and downtown."
Matt Warba, Hupy's assistant, oversaw the consolidation of field services over the last decade. With 124 FTEs, field services now handles most of the tasks formerly done by 380 people in four separate departments. How did they do it? "It came down to efficiencies," says Hupy. "Doing things better and smarter."
Part of better and smarter meant retraining employees to do each other's jobs. "We used to have twenty job descriptions," says Hupy. "We now have three, and this has allowed us to be more flexible. Before, we staffed to cover the highs. Now we staff for the average, and when a work area has a peak demand, we reassign"--like the day Dan Wooden's crew went from plowing to water-main repair, then back to plowing.
Management jobs also merged. "In parks operations, there were three managers," says Warba. "Now there's one, and he's a general manager for all the facilities. Likewise, water distribution and wastewater collection has reduced one supervisor each."
New technology helped. Now that trash, recycling, and compostables are collected from wheeled curb carts by trucks with automated arms, "we've been able to cut one-seventh of the drivers and do the job quicker," Warba says. All this was done with the cooperation of employees and their unions. "AFSCME was always part of the process," Warba points out. "We couldn't have done it without them."
Hupy and Warba say that even with fewer full-timers they're getting everything done as quickly as before or more quickly--except for the parks. When the mowing cycle stretched from fourteen to nineteen days and a midyear budget adjustment eliminated trimming, "we heard about it," Warba says. When trimming was restored last year, "by and large, the phone calls dropped off"--and this year, they're going back to a fourteen-day mowing cycle.
They heard about it two years ago, too, when city council eliminated street pickups of fall leaves. Residents now must compost leaves themselves or load them into a compost cart for pickup.
"The cost savings is over $200,000 a year," says Hupy. "Did it go without flaws? Heck, no! We were flooded with calls for missed pickups, and it turned out some drivers weren't going on some private streets. But this year they went where they were supposed to go, and things went far smoother."
How did all these changes affect the people on the front lines? Both Wooden and field operations supervisor Mark Cozart say they themselves like the changes but know some people who didn't.
"We had quite a few retire," remembers Wooden, who started in 2007. "Some of the older guys, they were a tight group, and there was some nostalgia there."
"For the most part everyone stepped up to keep service up," says Cozart, who began in 2005. "We were still expected to do the same as before, and we did our best. We became more efficient and effective because we had to be. There was some resistance at first. People become set in their ways."
"Technology has changed the job a lot," Wooden says. "In some cases, it's ten times better. And technology has allowed us to do some things in half the time. For example, when we needed to look up the work history for a sewer main or fire hydrant in the past, we had to dig through postcard-type files. Now we can simply select it in our city works database [where] the work history is listed electronically, whether we are in the office or in our trucks in the field."
Though job consolidation and retraining dismayed some employees, it was a path up for others. "I rose up," says Cozart, who used to be Wooden's assistant in sanitary sewers. "They don't always promote from within, but it's encouraged."
"It's busy but that's good," says Wooden. "The day goes by more quickly because there's never an end of things to do."
Field operations takes care of the city as it is now. Planning takes care of the city as it will be. Its staff advises the planning commission and city council on development, redevelopment, improvements, and preservation. And though development slowed down with the economic crash, they've still got plenty to do. When the building department was eliminated, planning took over most of its work.
"We're working a lot harder, absolutely," says one planner who asked not to be named. "Data analysis has suffered, and there's not as much long-term planning done as should be."
"We're still getting everything done," says another planner, who also requested anonymity. "The difference is in the quality. It's not as thorough and in-depth as it used to be."
While neither planner has gotten complaints about the quality of the city's planning efforts, they have heard about an easier-to-assess cutback: "People hate not getting a person on the first ring when they call," the second planner says. "And if you don't call back in one minute ... !"
That's not news to planning manager Wendy Rampson. "Last week someone called who couldn't reach anyone, and they left an angry message," says Rampson. "And the reason was that we were all in a meeting together, and there was no one left to give them an immediate response.
"When I started in planning in 1984, we were right in the middle of the office-building boom," Rampson remembers. "It was happening outside Briarwood and on the perimeter, and we were very, very busy. It felt like we didn't have enough people then--and now it feels the same."
When she started, "we had a director, an assistant, five professional planners, and two administrative staff who knew everything," Rampson recalls. "The big change for us came when we reorganized seven years ago, and many of the building department's responsibilities became our responsibilities.
"The zoning administrator was in the building department, but when that person retired, those tasks came to planning but the FTE was eliminated. Same thing with code enforcement. Some responsibilities went to community standards in the police department, but the rest came to planning with no FTE attached. Same thing with historical preservation. When that person retired, they were replaced with a three-quarters-time person, then when that person retired, the job was folded into planning with no additional staff. And in our most recent cuts two years ago, we had to cut two support staff, and zoning appeals were spread among the rest of the staff."
Rampson's workforce now consists of "me, five professional planners, and one administrative staff. That's three less bodies with the work of four bodies added in." She understands why. "There was a conscious effort to reduce the legacy costs [of pensions and benefits] into the future." And she recognizes that planning isn't anywhere near as busy as it once was. "We used to go to two in the morning at planning meetings because there was so much to get through. And in the last year we canceled five meetings because we had no items to discuss."
But she still feels the effects. "Our service a couple years ago wasn't great. We've spent the last couple of years improving the process because the expectation of citizens is still pretty high. But we struggle to be efficient, and the biggest impact has been that while we've been able to keep up the status quo day to day, we do not have the time to do outreach or long-range planning."
And there's the effect on staff morale. "They take things personally when people are upset. But mostly we laugh and eat a lot" to handle the stress.
"People here complain, but that's pretty universal," says one of the anonymous planners. "Most people here are grateful to have a job. I hear the same thing every day: 'At least I have a job to complain about!'"
Mayor Hieftje seems to get it. "Things shrank, so people are working harder now because they have more work to do. We were having some problems in the beginning. We're getting far fewer complaints now, because service was slower and now it's better."
And the mayor is more convinced than ever that cuts were needed. "Our general fund expenses were $69 million in 2000. Now they're $64 million, and that $5 million drop is in state revenue sharing. If we hadn't cut, we'd be in pretty rough shape now."
"Our total budget for last year's general fund expenses was $80.6 million," clarifies Tom Crawford, the city's chief financial officer. "John is adjusting for consistent operations. For example, we had solid waste in the general fund in 2000, and now it's in its own fund. When I talk to the community, I say our budget is down if you adjust for inflation."
But if the staff is down 30 percent, why has the budget gone up at all? "The cost for employees has gone up while the number of employees has gone down," says Crawford. "That's a key driver. Having three hundred fewer employees means a citywide saving of about $30 million a year, but we've also had increased costs. In 2001, the city paid $43.6 million in payroll. In 2012, it's $48.5 million. In 2001, the city was paying zero dollars toward pensions. Today we're paying $10 million," due to rising numbers of retirees and shrinking investment returns. "In 2001, health care and retiree health care was $6 million," Crawford adds. "Now we're contributing $15 million." And if the city hadn't cut its workforce, those numbers would be that much greater.
The ultimate compliment for the city's reorganization came when two of its architects moved on to bigger jobs last year.Roger Fraser was hired to run the state's emergency manager program, and former public services administrator Sue McCormick now heads the Detroit Water and Sewerage Department (see box, below).
"Ann Arbor has done a remarkable job of reducing expenses to meet revenues, and it's had a minimal impact on services," says Fraser's successor, Steve Powers. "We're just about right now, not too skinny, not too big. The last ten years have made the city better conditioned and more muscular."
But now, Powers says, "it's time to take a break from reduction. I don't see the number of employees changing in the next five years unless council, supported by the public, decides to change things."
That would be fine with field operations. "What I want is more funding," says Craig Hupy. "I don't see the need to add more bodies." He'd rather see more capital investment in the city's roads, sidewalks, water and sewer mains, and parks--the aging infrastructure that his hard-working crews maintain.
"Though if we added more bodies, it would allow city parks to look more like U-M parks," suggests Warba. "Things would look snappier."
Hupy isn't interested in going there. "Those are policy decisions," he tells his second-in-command. "We do what council tells us to do."
Sue McCormick's Challenge
While Ann Arbor started shrinking its staff more than ten years ago, Detroit resisted making cuts. Now almost out of cash, the city faces either an onerous consent decree or an outright takeover by a state emergency manager. So why would Sue McCormick leave her secure job as Ann Arbor's public services administrator to run the scandal-plagued Detroit Water and Sewerage Department?
"Because it's the biggest challenge in the state," McCormick says in a phone call between meetings. "This system is ten times the size of Ann Arbor's. We serve roughly four million people with a $900 million annual budget. We serve the city and all the way west to Ypsilanti and all the way north to Flint."
McCormick's other challenges include a bloated and inefficient staff, decades of noncompliance with the Clean Water Act, and a federal indictment hanging over the former director. Last fall, federal judge Sean Cox ordered the department to clean up its act--and allowed it to do so by granting its yet-to-be-hired new director extraordinary powers. Those powers are what changed McCormick's mind last November.
McCormick says her plan for Detroit is "to do what we did in Ann Arbor but at a much larger scale ... In Ann Arbor, there were twenty job classifications in field services, and there are 156 job classifications here--so you can see there's a lot of opportunities to find efficiencies."
She has already eliminated 550 staff positions. Now, she's working to "get everybody to understand that we need to move together in the same direction.
"I've been meeting with front-line employees every week, and walking through their jobs with them. Our front-line employees are embarrassed by how things have been. I've met about five, six hundred people so far, and I'm hearing consistently they're ready to change, and they want to regain our respect."
[Originally published in April, 2012.]