By Christine Andrysiak & David Asker

After conducting a five-year financial forecast, the city of Saginaw was concerned about its financial future. The city commissioned Plante & Moran to undertake a strategic operation review. Coined “The City-Wide Organization Development and Efficiency Study,” the city engaged department heads, staff, and even union leaders in the restructuring. Pictured from left to right are reorganization team members Diane Snowden, executive assistant to the city manager; Beth Church, personnel generalist; Tim Morales, assistant city manager for administrative services; Yolanda Jones, budget administrator/assistant to the city manager; and Dennis Jordan, human resources director. Photo courtesy of the city of Saginaw.

Given the current state of the economy, local governments are feeling the pressure of significantly reduced budgets. We’ve seen cuts as high as 30 percent in the past few years. It’s become clear that the current economy can no longer support the existing local governmental infrastructure.

Many communities have concluded that conducting business as usual is not an option, and a fundamental change is needed in order to survive and thrive. These communities are taking a holistic look at their entire organization and streamlining operations to create a leaner governmental structure.

Start With a Strategic Operational Review

This type of review involves strategically analyzing your operating practices to identify opportunity for cost reduction and efficiency gains.

The main objectives are to:

• Review overall department structure, supervisor and staffing levels, department scheduling, and overtime policies;
• Assess the efficiency and effectiveness of operations to eliminate redundancy within and between departments;
• Identify specific areas and operations where cost reductions and/or organizational structure changes are possible; and
• Develop a plan and a corresponding implementation strategy to guide the organization in achieving the outcomes of the assessment.

Methods of data collection often include staff surveys and in-person interviews with department heads and their staff. Where appropriate, benchmarking data is also utilized.

Hot Button Issues

Operations reviews often reveal opportunities for cost reduction and efficiency gains that can be challenging to implement. While staffing reductions may be a component of operational reviews, it’s important to remember these suggestions are strategic reductions rather than across-the-board cuts, and that they sometimes go hand-in-hand with recommendations for technology improvements. For example, a city may determine that it can become more efficient by limiting the number of clerical staff and purchasing an updated enterprise resource planning system instead.

Another hot-button issue is consolidation. If financial challenges are so great that dramatic changes will be necessary in order to continue delivery of key services, a recommendation toward consolidation or shared services may be in order. See the sidebar on dispatch consolidation for examples of communities who have elected to go this route. 

Christine Andrysiak is a consulting manager at Plante & Moran. You may reach her at
248-223-3330 or [email protected].

David Asker is vice president at CRESA, Plante & Moran’s real estate division. You may reach him at 248-223-3413 or [email protected].