Commentary: Denver's Move to a Merit-Based System Is a Common-Sense Change for Layoffs

Slim budgets and tough decisions are nothing new for local governments, and Denver for decades has navigated through boom and bust cycles. As former leaders respectively of two of Denver’s largest city agencies (the Department of Parks & Recreation and the Department of Transportation & Infrastructure), we know how challenging it was to lead city teams through hard times.

Denver’s government grew during the last decade of boom times. Mayor Mike Johnston and agency directors are now managing through this economic downturn, and they need to prioritize both caring for the city’s public servants who keep the city running and delivering great services for residents. It isn’t easy to do both with shrinking revenues, but our city’s leaders have to find the way.

Given the significant budget deficit facing the city, the city’s leaders sadly have to consider employee layoffs. For decades, city employees have operated under a complex layoff system that placed a heavy emphasis on seniority, using a “last in, first out” method of making layoff decisions. While well-intended to protect long-term employees with institutional knowledge, this legacy system can overlook other critical factors like performance and expertise of more junior employees. Employees are the heartbeat of this city, and we should be doing everything we can to attract and retain the best and brightest.

The city this past week took a huge step toward that goal when the independent Career Services Board voted to change the seniority-based layoff rule towards a merit-based system. That system will still consider length of service as part of the layoff criteria but will weigh tenure along other critical metrics including performance history, skills and abilities.

As former leaders of two of Denver’s largest and most complex agencies, we applaud this rule change and the leadership of Mayor Johnston who supported this effort. We experienced firsthand the consequences of the city’s seniority-based system that resulted in the convoluted “bumping” process. Under that process, if two employees currently have the same title and layoffs are required to meet budget needs, the employee with more seniority will retain that title – regardless of performance – and the more junior employee could get “bumped” or demoted to a lower title with lower pay. That process was cumbersome, unfair to employees who were outperforming their more senior peers, disruptive to the cascading number of “bumped” employees, and negatively impacted residents counting on city services.

Denver may be breaking new ground in municipal government with this merit-based rule change, as we’re not aware of any other major U.S. city in recent history that has adopted a comparable system that subordinates seniority in favor of weighted performance metrics. But while novel, this new rule is a common-sense change that will make it easier for the city to keep top performers.

We were glad to see that along with the rule change, the city is also working to create appropriate severance packages and new outplacement and transition resources for employees who could be impacted by layoffs. City employees who have given so much of their time, passion and service deserve nothing less.

As the city navigates a chaotic national political climate, economic uncertainty and unenviable decisions ahead, our leaders should be able to make the best decisions possible – and that starts with retaining our most dedicated, highest-performing employees. Working as a public servant isn’t easy. It’s a calling, and it is a calling that should come with the assurance that merit and performance matter.

Adam Phipps is the founder and CEO of Infrastructure Strategies LLC, a national advisory firm specializing in program delivery, business strategy and business development. Prior to founding infrastructure Strategies, he served as the executive director and city engineer of Denver’s Department of Transportation & Infrastructure, acting as deputy mayor for Mayor Michael Hancock as required.

Allegra “Happy” Haynes retired in October 2023 after serving for eight years as executive director of Denver Parks & Recreation, three of those years as the deputy mayor. During a 48-year career in state and local government, she was the first African American woman elected to Denver City Council, where she served from 1990 to 2003, including two years as president; she was elected at-large to the Denver Public Schools Board of Education in 2011.

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