Calhoun: Wake-Up Call

The 7 Percent Solution

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Hickenlooper, the first mayoral candidate to take a long, hard look at the city's budget, realized that unrealistic, outdated Career Service policies were part of the financial problem -- and said so.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?

Eight years ago, just a term into Wellington Webb's reign, the city commissioned a big, fat report pointing out flaws in the Career Services system. But the economy was big, fat and happy then. Thriving was no challenge at all, and so the report languished. No one wanted to remember that Denver had enjoyed a big, fat, happy economy right before Federico Peña was elected mayor, until all the oil money evaporated seemingly overnight. And today, no one wants to remember how long it took the city to climb out of that slump. No one wants to remember that it took the better part of a decade, as well as a new convention center and a $5 billion airport project.

No one wants to remember. Because today the city is in a world of hurt, and everyone knows they'll soon feel the pain.

The More Things Change...

The Career Service Authority's Web site offers a list of frequently asked questions, including this: What should I know about successfully managing change?

"There are three general responses to change: ignore it & hope it will go away, suspend action until the new way has been proven, or jump in enthusiastically," the CSA site answers itself. "Each of those responses may be effective, depending upon the circumstance. In other words, there may be situations in which it is absolutely appropriate to ignore the stimulus, because it will go away. Unfortunately, those situations are becoming rarer as the general pace and scope of change quickens. Since taking action is empowering, waiting around for change to disappear or for someone else to handle it can lead to a paralyzing victim syndrome."

How, the site next asks, did having a change-management resource for the city come about?

Why, Jim Yearby brought it with him to the Career Service Authority when he became its director several years ago.

These days, Yearby could tell you all about change. Last week, he was temporarily suspended from his CSA post. And while he was back for Tuesday's Mayor/Council meeting, where the latest bad budget news was delivered, change is in the air.

The Career Service Authority is managed by a board whose five members are all mayoral appointees. Like most city workers, however, the CSA's director is a CSA employee, and so protected by a different set of rules than those that guide political patronage. But Yearby also happens to be rubbing some important people the wrong way -- among other things, there's the matter of a $146,000-per-year Chief Information Officer job being posted before the position was even approved by the CSA board -- right when the city's fiscal crunch is putting the squeeze on Career Service, whose payroll accounts for a huge chunk of Denver's budget.

"The trick to successfully managing change is to perfect your analysis capability so you can make accurate assessments about which category is real just as quickly," the CSA site advises. "It's also helpful to know that all change starts on a personal level -- our reactions, feelings, judgments and needs. So start the analysis on that level and you'll be ahead of the curve."

Even if you're halfway out a revolving door.

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Patricia Calhoun co-founded Westword in 1977; she’s been the editor ever since. She’s a regular on the weekly CPT12 roundtable Colorado Inside Out, played a real journalist in John Sayles’s Silver City, once interviewed President Bill Clinton while wearing flip-flops, and has been honored with numerous national awards for her columns and feature-writing.
Contact: Patricia Calhoun

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