Operational review not same as organizational review, councillors told

Though the two are sometimes confused, an operational review is not an organizational review.

One looks at how the township operates, while the other looks at specific staff within an organization.

John Matheson and Michael Fenn of Strategy Corp. were at Erin council on Oct. 30 to discuss options regarding the town’s upcoming operational review study.

Fenn acknowledged council had just gone through a municipal election and the operational review study would be a good starting point for the next council.

“Our focus is on operational improvements and ways in which the productivity of a municipal organization can be enhanced,” he said.

Fenn felt this was a particularly good opportunity and he hoped to be able to take part in a fresh discussion of the issues.

Matheson said Strategy Corp. has existed for the past 20 years – originally with three people, but now encompassing a staff of 40.

Some of his own experience goes back to his time as chief of staff for the Minister of Municipal Affairs and Housing.

In addition, he noted the firm has worked with a number of larger municipalities such as Ottawa, Toronto and Edmonton, along with smaller locales such as Guelph, Halton and Bruce County.

Mayor Lou Maieron expressed concern, stating that Erin is a smaller municipality. He said the examples being used were larger cities and districts and he was worried how this would affect the scope and size of the study.

Matheson noted the firm also has worked for areas such as Tecumseth (near Windsor) and the town of Napanee.

Both Fenn and Matheson stated they had experience working with smaller communities. Fenn stated that in some respects the smaller municipalities provide more challenge.

Matheson said there is a breadth of experience offered by members of their team. He added the municipal context is well-understood.

“It is a time of fiscal restraint and not a lot of help coming from the province these days,” said Matheson.

He added there are human resource challenges across the municipal sector. Many municipalities are facing the prospect of senior staff members approaching retirement age – but few have a succession plan.

Matheson said in areas where there is growth, the costs are high, but where there is not a lot of growth there are still costs associated with maintenance of aging infrastructure with a lower population base.

As well, there are heightened public expectations and public scrutiny.

“It is common to say every municipality is one smartphone photo away from having a customer service disaster,” said Matheson.

Regardless of the service provided in the past, Matheson said “it is no longer just what you do, but how you do it.” He looked forward to the energy provided by a new council.

“We really believe in reports that are implementable. The last thing any government (or ratepayer) needs is another report put on a shelf and not implemented,” said Matheson.

He said those in his firm “are less like physicists and more like mechanics – we actually fix things in a way that works.

“We’re not interested in telling you what you ought to do … we’re interested in working to figure out what you can do.”

Fenn said the scope team  involves council and senior staff, followed by a Strategy Corp report and the presentation of recommendations to council.

Matheson said it would be great to find 50 per cent improvement – but it’s not going to happen.

“It’s a lot more likely if you can engage your staff to find out what is realistic, you are much more likely to find 50 things to find 2%, rather than two things to find a 50% efficiency.”

He added, “We understand that municipalities have been skating hard uphill for the past 20 years.”

Matheson said there is no gravy train, “what this is about is finding fresh processes and new technologies to deliver some improvements” as opposed to waving a magic wand.

Fenn believed one of the most useful parts of the process is that staff embrace the idea of continual improvements to serve customers better.

“There’s a real process with staff working together – from the front line to senior staff.”

Maieron asked how the public could be engaged in the process.

Matheson noted that Erin had already gone through an extensive strategic planning process and did not foresee replicating that extensive process until there were recommendations brought forward.

“It would be our view that the in-house work which needs to be done, is already informed by the strategic direction resulting from the public pulse.”

He used the analogy of people going into the restaurant and making an order.

He said that while it is appropriate for the staff to go into the kitchen to make the meal, and for the customer to decide whether the meal tastes good, he did not believe it was appropriate for the customers to go into the kitchen and help with the cooking.

Matheson noted that any processes that represents a large part of the budget should be looked at, in addition to older processes that were implemented before smartphone technologies.

Maieron said “we are a service industry and our customers are the public.”

The mayor then diverged from the discussion by commenting on how residents are taxed for the services they receive.

Matheson noted “a lot of this process is not rocket science.”

Councillor John Brennan looked to the newly-elected council representatives for input as they will be part of the future decisions.

Councillor Barb Tocher was quick to point out that an operational review is not an organizational review.

“Let’s not mix the two together,” said Tocher.

Matheson said the process works better when people within the organization are doing the review.

“It sends the right message to staff,” added Fenn.

At the same time, he added that while the idea is not about “slash and burn,” employees may find a change in their jobs for the municipality to improve how it does things.

While there may be a belief by some that the town is overstaffed and overpaid, Matheson said the best approach is for Erin to look at comparable municipalities.

Maieron maintained that an operational review could well result in organizational change.

Brennan stated “the object is not to get rid of jobs, but to make operations more efficient. Could it result in job losses – yes.”

At that point councillor Josie Wintersinger said she did not want to see the review turn into a witch hunt.

A clerk’s report noted that last July, the town passed a resolution approving the terms of reference for an operational review and directed the CAO/town manager to initiate and manage the process to undertake the review.

Eight firms were invited to provide a proposal for an operational review study for the Town of Erin as described – in accordance to those terms and other instructions as stated in the RFP – to assess the existing processes and procedures, practices, staffing, technology for the departments to identify opportunities for improvement that will optimize service delivery while making the best use of resources.

Four firms responded, but only two formally submitted proposals.

The low bid came from Strategy Corp. at $46,000 plus HST.

Clerk Dina Lundy noted the  operational review was included in the 2014 budget in the amount of $30,000, with the remaining funds to be spent in 2015.

While the town’s strategic plan provides an overriding vision and guiding principles and overall focus for the corporation and how the community will look in the future, the operational study will focus solely on internal improvements.

Municipalities provide a variety of services and programs to their residents and businesses with the level of service being dependent on local means and priorities.

The review assesses how well services are delivered and how the service can be improved or  streamlined.

Lundy noted that as part of the 2014 budgeting process council approved moving forward to undertake an operational review.

“I am seeking consensus that council wants to move forward with the operational review at this time,” she said.

Council accepted the presentation.

Prior to discussion, councillor Deb Callaghan declared a conflict/pecuniary interest as relating to the fire department.