Strategic Restructuring Initiative
The Strategic Policies and Priorities Committee recommends that:
(1) the report dated January 19, 1998, from the Chief Administrative Officer be adopted;
(2) the Chief Administrative Officer be directed to immediately obtain proposals, at no cost, from qualified consulting companies to provide objective guidance and assistance in the amalgamation of the services and functions provided by the seven former municipalities;
(3) the Chief Administrative Officer develop Terms of Reference for the proposal call to include: the full cost of restructuring; the full cost of amalgamating seven cities into one; and the number of staff required by the new City, including recommendations on elimination of duplication, maximizing efficiency, and departmental budget estimates. Proposals also to include recommendations for efficiency and for staff retraining, and on the staffing that will be required by the Community Councils in Civic Centres;
(4) it be noted in the review that there could be more than four divisions in the Organization Structure;
(5) a Sub-Committee of the Strategic Policies and Priorities Committee, composed of three of its members suggested by the Mayor, be established to review the proposals received from the consultants when the proposals are being reviewed by staff;
(6) the Chief Administrative Officer report on all City-owned premises that will no longer be required; and
(7) the Chief Administrative Officer report back to the Strategic Policies and Priorities Committee on these proposals and all other things necessary, as efficiently and as quickly as possible.
The Strategic Policies and Priorities Committee submits the following report (January 19, 1998) from the Chief Administrative Officer:
Purpose:
This report will outline the current plan and approach to strategic restructuring of the Departments of the City as a result of amalgamation, downloading, and financial pressures. It will highlight critical initiatives and decisions which will need to be taken over the next few months. Several companion reports, on the January 19, 1998 Strategic Planning and Priorities Committee agenda, will be introduced as key elements of the Strategic Restructuring Initiative.
Funding Sources, Financial Implications and Impact Statement:
The outcome of the Strategic Restructuring Initiative will be to effectively and efficiently amalgamate the structure, services and staff of the former municipalities, in light of the financial and human resource constraints of the City, while ensuring no impact on customer service.
There will be financial implications arising from the companion elements to Strategic Restructuring, such as the funding of a workforce reduction strategy in the form of a separation program. Funding will also be required to contract with external consulting expertise. The Chief Financial Officer and Treasurer is preparing the estimates for all types of transition costs, which will be submitted to this Committee and be part of the 1998 Final Capital Budget. Restructuring costs will form part of those estimates.
Cost savings from amalgamation and restructuring will be quantified throughout the process.
Recommendation:
It is recommended that this report be adopted as the framework for corporate restructuring.
Discussion:
Since the introduction of the City of Toronto Act, 1997, staff of the former municipalities worked with the Toronto Transition Team on a review of all the services provided by both levels of government. The final report of the Toronto Transition Team was referred to the Special Committee to Review the Final Report of the Toronto Transition Team (the AMiller Committee@) for review and recommendations back to Council within four months.
Coincident with the AMiller Committee@ undertaking a comprehensive review, it is imperative that we begin to redesign the staff structure of the Corporation in order to effectively carry out the business and service of this municipality. Seven distinct and somewhat disparate organizations have to be brought together to function as a cohesive whole to maximize operational efficiency. The following pieces form the Strategic Restructuring framework:
(a) Organizational Structure;
(b) Organizational Leadership;
(c) Human Resources Principles ;
(d) Staffing Strategy for Management and Non-Union (Excluded) Positions;
(e) Separation Program for Executive, Management and Non-Union (Excluded) Staff; and
(f) Interim Salary Administration Practices and Policies.
Organizational Framework/Structure (Timeline B January/February):
An organizational structure sets out the approach and hierarchy of the business, providing the framework in which to organize staff, reporting relationships, accountabilities and service. It provides the necessary links and synergies between and across Departments and sets out the support arrangements for services, staff and the public. In any merger, no matter the scope or magnitude, the structure must be dynamic and flexible. It must allow for strategic changes as comprehensive organizational reviews are completed throughout a restructuring process.
The organizational structure will allow the staff of the former municipalities to be re-organized to meet the needs of the public. It is imperative that the development and approval of an initial organizational structure be the first element of Strategic Restructuring, recognizing that there will be modifications as we move through the process.
A report will be submitted to the AMiller Committee@ in the near future to address the Organizational Structure component.
Organizational Leadership (Timeline B January to March):
In order to carry out Strategic Restructuring, the appropriate leadership must be in place. The staff who will guide the Corporation, under Council=s direction, will be the catalyst for change. They will be responsible and accountable for reorganization, while ensuring that there is no disruption to public services.
The seven former organizations have been in a state of flux and anxiety over the past year leading to amalgamation. Productivity and staff morale have declined. Critical early on in the process of restructuring is the designation of the leaders in the Corporation.
A companion report has been submitted which lays out the process for staffing key leadership positions.
Stabilization and Integration (Timeline B February to April):
Once an introductory organizational structure has been set, and key leadership positions defined and staffed, the organization can stabilize its operations and employees and can commence the process of integration. Council has already started this process by approving a governance structure, while understanding that this structure may change as Council works through its own process.
Each of the Departments will be required to integrate in 1998, while undergoing a longer term review process throughout 1998 and 1999. The longer term process will include direction from Council on its strategic priorities, decisions from Council on service delivery, development of performance measures and identification of financial and human resource implications.
During short term integration, key assumptions will be made, which include:
(a) The introductory Organizational Structure will initially govern the design of the Corporation, while recognizing that modifications can be made to the structure as time and experience dictates.
(b) Changes will occur in the longer term as a result of Council=s future decisions with respect to, for example, the support required for Community Councils and the level and appropriate delivery mechanisms for public services.
(c) Current service levels will be maintained and some services will continue to be delivered at the civic centres.
(d) One of the goals of the integration will be to achieve overall savings in the Corporation.
(e) Integration will be done using different approaches depending on the public=s need for services and on Council=s governance model. Some Departments will be integrated on a geographic basis (for example, fire services); some may be done on a program basis (for example, works operations); still others will be done on a governance basis (for example, financial services).
The results of the stabilization and integration process will be:
(a) a provisional organization that will deliver services;
(b) clear operational requirements for the Departments;
(c) a system to manage staff in the interim;
(d) a communication plan for the public and staff establishing clear lines and means of communicating decisions;
(e) time to allow Council to effectively organize itself and to make critical decisions on the future of the new City, including decisions on how agencies, boards and commissions will fit into the new structure;
(f) more comprehensive information on the financial and staffing impact of amalgamation; and
(g) an inventory of initiatives to be accomplished, solutions to be developed, and decisions to be made to achieve the longer term Strategic Restructuring Plan.
It is expected that this part of the process will take up to six months to unfold and will depend on how quickly decisions are made with respect to structure, staffing and funding. Budget pressures for 1998 could accelerate the timing and level of integration.
It is important to note that the services which were already amalgamated across the former Metro level will also be going through a series of changes. There will be pressure on these services as a result of downloading and a process will be set in place to assist those department to Are-stabilize@ and re-organize.
Impact on Staffing:
There will be an immediate impact on staff and staffing levels in the Corporation as a result of the first phase of restructuring. It is not possible, this early in the existence of the new City, to determine the exact consequences of the amalgamation on the number and type of staff required to deliver the services. However, decisions that have already been made by Council, and those that will be made in the near future, will have consequences for individual staff.
To manage the impact through the process of stabilization and integration, several companion reports are on the agenda for the Committee=s consideration:
(a) Human Resources Principles for the Strategic Restructuring;
(b) Staffing Strategy for Management and Non-Union (Excluded) Positions;
(c) Separation Program for Management and Non-Union (Excluded) Staff (In-Camera); and
(d) Interim Salary Administration Practices and Policies.
Staff will also be submitting a report to the Budget Committee respecting approaches to reduce the cost of salaries and wages as a result of 1998 budget pressures (for example, hiring freeze, gapping policy). The process of integrating Departments and services and the levels of staffing will be affected by Council=s decisions in this regard.
Additional policies will be developed, as required, during this phase of restructuring.
Staff are also developing approaches for dealing with unionized staff who will be affected by amalgamation. Consultation with the union representatives, once organized, will form a part of this process where appropriate.
Change Management:
An integral component of Strategic Restructuring is a process for managing change. The organization will be undergoing unprecedented, large scale and fast paced changes. A new culture, a new set of attitudes, and a whole series of changed behaviours will need to be developed for the organization and its people. These will be based on the shared goals and values of both Council and staff.
The organization will also be challenged with developing new ways to:
(a) engage and support Council and staff in building the new City of Toronto;
(b) retain and/or re-train individual staff who will be important to the success of the new organization;
(c) interact with all stakeholders at the city level and within its communities; and
(d) consult and communicate with citizens, businesses and staff.
Staff will develop a change management philosophy and techniques to bring about a collaborative and cohesive organization of staff and services.
Future Outlook (April to December 1998):
Once the organization is stabilized and integrated in the short term, the longer term Strategic Restructuring process will begin. Full restructuring plans and timeframes will be targeted for Council consideration in the early fall. Some areas will be fast-tracked (for example, administrative and corporate services) to achieve efficiencies and savings in the shorter term.
This will involve:
(a) a strategic planning process, which will outline Council=s future vision and priorities;
(b) eliminating duplication and rationalizing service levels to achieve Council=s service priorities;
(c) public consultation on the vision, priorities and service levels;
(d) external expertise, guidance and advice on the best practices of both the public and private sectors in amalgamations or mergers;
(e) decisions on changes which need to be made to the organization -- that is, what services should the city be delivering, what Departments will be delivering which services, what services will continue to be delivered at the civic centres, how will links be established to ensure convenient and accessible services;
(f) efficiencies and strategic partnerships between the City Departments and the Agencies, Boards and Commissions;
(g) modifications in the level of staffing and financial resources as a result of structure, service level and service delivery decisions;
(h) harmonized policies, procedures, standards and by-laws;
(i) methods to measure the performance of the organization and staff in delivering services to the public; and
(j) a definitive plan for enhanced and continuous communication with the public and employees.
Conclusions:
This report has outlined a framework and approach to Strategic Restructuring which will guide effective, efficient amalgamation of services and staff. Early decisions by Council on approaches to deal with the impact of restructuring are required.
Full restructuring plans and timeframes will be targeted for Council=s consideration in the early fall.
Contact Name and Telephone Number:
Brenda Glover, Commissioner of Human Resources, 397-9802
