The 7 Percent Solution

The city's failure-to-thrive syndrome.

Denver's in a world of hurt.

The bad news came at Tuesday's Mayor/ Council meeting. With the economy still scraping bottom, the city is now looking at a $50 million shortfall -- which means a 7 percent cut in the 2004 budget.

In a budget that was already whacked to the bone this year.

In a budget that had to stretch to cover last year's highest-possible merit raises for 75 percent of the city's qualifying workers, who, in a miracle of mean/median/mode, all ranked above average in that pool -- at a time when the average city-employee raise of 7 to 10 percent looks like an impossible lottery windfall to non-city workers.

In a budget where even a 1 percent change in employee compensation represents five million bucks.

Right now, Denver's hurting. So it's no wonder that the city would rather look past the sorry present to "Thriving in 2004...and Beyond: An Employee Challenge."

And how.

Because come July, after Mayor Wellington Webb and his political appointees -- those who haven't already been absorbed into the ranks of the city's 5,000-plus Career Service Authority jobs, that is -- leave City Hall, it will be a challenge for some city jobs to survive, much less thrive. And all city employees will inevitably take a hit.

John Hickenlooper, the first mayoral candidate to take a long, hard look at the city's budget, realized that unrealistic, outdated Career Service policies were part of the financial problem -- and said so. So did former city councilmember Sue Casey. "With such a high percentage of the city budget being personnel costs, it is inevitable that one must look to reducing those costs during down times in order to balance the budget," she warned back in January. "Yet, just as it did in the late 1980s, the charter language mandates broad pay increases across the board at a time when containment or even reduction in personnel costs is necessary. These charter provisions place decision-makers in the difficult position of considering other, more burdensome options, including forced unpaid leave, furloughs or layoffs."

In February, though, a joint Mayor/Council committee deferred action on several proposed changes to the city charter on setting pay for city employees and elected officials, saying there wasn't enough time to do the work before the May election. "Policy goals for the committee will include maintaining a competitive workforce, as well as providing more flexibility to rein in salary costs during economic downturns," councilmember Kathleen MacKenzie, the committee's chairwoman, said at the time, offering public hearings as a consolation prize.

So far, none have been held. But behind the scenes, a few city officials are scrambling to push for Career Service changes that could help the ultimate winner of that May vote, the new mayor who will have to find a 7 percent solution to the budget shortfall. They plan to urge department heads to limit merit raises to that percentage of their employees who truly rank above average -- a number that can't rise above 49.9 percent, for obvious statistical reasons. And they're paving the way for some reconfiguration of city employee benefits, which now account for 43 percent of the total compensation package. Private-industry compensation averages about 10 percent below that. At $5 million for every 1 percent, that's $50 million in savings right there.

But it would all be coming from employee pockets. And so they're also asking city employees to come up with cost-saving solutions, creative ideas that could turn merely surviving 2003 into "Thriving in 2004."

"In a time of transition like this," explains city finance director Margaret Browne, who's pushing the project, "it's important to keep people focused on the positive and keep them working."

And so employees are asked not just how the city can cut costs, but how it can raise money and encourage economic development. "Describe to me a time that you were proud of, when during a period of financial belt-tightening you were able to implement some sort of system or process or change that enabled your organization to thrive...financially and in spirit, despite overwhelming challenges," reads one question. "What changes did you make? What was the impact? What was it about your attitude; your relationships; inter-departmental support; the systems and the structure that supported this in happening? What kinds of communication and coordination were required to support this effort?"

On Monday, Browne says, the project's facilitator will gather "Thriving" workers together and summarize key ideas.

But a touchy-feely project like this requires more than inter-departmental groping, and so the city is reaching out. Even as Denver conducts its second annual Citizen Survey, polling 3,000 households on city services and community characteristics -- "an invaluable tool for planning and preparing for the future," Webb calls it -- "Thriving in 2004" is tapping into residents, too, asking a target list of non-city employees (on which my name appeared) much the same questions. They end with this: "It is five years from today. The economy has turned around significantly, resources are no longer pinched, and the City has been written up as being a model of cost-effective government. What does the article say?"

It says: What the hell was Denver thinking, waiting so long to deal with the post-boom bust?

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