Review of Organisational Structure - Wollongong 4... · Extraordinary Meeting of Council Page 24 2 October 2007 Wollongong City Council ITEM 4 REF: CM186/07 LATE BUSINESS - REVIEW

Extraordinary Meeting of Council Page 24 2 October 2007

Wollongong City Council

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REF: CM186/07

LATE BUSINESS - REVIEW OF ORGANISATIONAL STRUCTURE Report of General Manager (DF) 27/09/07 File No. 04.06.01.001

PROGRAM City Leadership

FUNCTION Corporate Strategy

PRECIS

This report is a result of the deliberations of a working party established by Council in June 2007 to review the structure of the organisation and the meeting structure of the Council. This report considers the organisational structure of Council with the meeting structure to be considered during a further report expected to be presented at the Council Meeting to be held on 16 October 2007.

RECOMMENDATION

1 Council adopt the attached organisational structure with a phased implementation to be directed by the General Manager.

2 The positions of General Manager, Executive Manager Operations and Executive Manager

Governance and Planning be classified as senior staff as per s332(1) of the Local Government Act 1993.

3 A progress report on implementation, including any minor adjustments, be presented to

Council within four (4) months. BACKGROUND

At the Council Meeting held on 18 June 2007, Council resolved to establish a working party to review both the structure of the organisation and the meeting structure of Council. The working party was to consist of Councillors Gigliotti, Griffiths, Jonovski and Kershaw. Additionally it was to consist of the General Manager and an independent person nominated by the General Manager and approved by the Councillors on the working party. This person was very experienced Local Government Specialist, Mr John Kleem. As part of the process the working party requested input on the structure from staff and 34 submissions were received. These came from individual staff and groups of staff, with two Councillors also making submissions. The working party has met on three (3) occasions and worked through this complicated issue to come to a unanimous recommendation. In line with the recommendation of Council, the working party considered the structure of the organisation and also the structure of Council and standing committee meetings. This report considers the structure of the organisation. The report of the working party on the meetings and committee structure of Council will be presented to the Council Meeting to be held on 16 October 2007. PROPOSAL

The working party has developed a structure which is shown as Attachment 1. The previous structure is shown as Attachment 2.

Underlying the philosophy of the proposed new structure are two key themes:

• An increased focus on delivery of our core organisational services in cohesive units.

Extraordinary Meeting of Council 2 October 2007 Page 25


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• A streamlining of senior executive management numbers and a resultant saving in salaries. In light of the organisation’s ongoing operating deficit and the massive shortfall in infrastructure funding highlighted in the Review Today report, it is important that a clear signal be sent from the leadership of the organisation that we are very serious about reducing operating costs to allow increased spending on renewal and replacement of the infrastructure that the community uses on a day to day basis as it lives, works and plays..

The restructure involves a number of key proposals:

Reduction in the number of executive management positions from 4 to 2.

These will be the Executive Manager Operations and Executive Manager Governance and Planning. With the reduction of numbers at this level by 50%, the roles will change by necessity. A large Council like Wollongong operates over 40 separate services from road construction to animal control to environmental education. With four executive staff, the roles were more “directors” with an expectation that they would have a reasonably detailed knowledge of the activities under their control. If you reduce this amount by 50%, this effectively doubles the span of control and changes the detail of control exercised. Effectively you are creating key leadership and facilitative roles which have a focus of creating strategic direction and improving cooperation and removing bottlenecks. The nett effect is to push greater day to day responsibility and authority to the management level below. While the two executive management roles have clearly defined areas of responsibility, the key focus will be for the three person Executive Management Team to ensure development of strategic direction and the effective cohesive operation of the organisation.

The position of Executive Manager Operations is not dissimilar to the role which exists in the current structure. There will be some minor changes in responsibility which will be outlined more clearly when the roles reporting to it are described below. It is effectively responsible for almost all of the direct service delivery of the organisation.

The position of Executive Manager Governance and Planning is a new role which combines the entire span of the previous Chief Financial Officer and Group Manager People and Culture roles together with parts of the Group Manager Sustainability role. It oversees the corporate services activities of Council, the income generating division of Commercial Projects and Property as well as the regulatory roles surrounding development control, plan making, development and all the compliance type roles of the organisation.

Almost all submissions supported a reduction in the numbers of executive management, though most did contemplate three group manager/director type roles.

The “externalising” of Manager City Centre and Wollongong Office of Economic Development.

At the moment WCC Ltd receives the mall and CBD security levy and pays for the expenses of the City Centre Office and its activities. WCC Ltd currently employs all staff with the exception of Manager City Centre who is currently an employee of Wollongong City Council. This creates unclear reporting relationships, and it is considered appropriate that the role would be better located with the rest of the staff being employed by WCC Ltd. The Board of WCC Ltd have discussed this issue and have resolved to employ the current employee as a transfer of business on his current terms and conditions. The staff member has been consulted and is supportive of this direction.

Council has resolved in principle to establish a separate company tentatively titled “Advantage Wollongong” to coordinate economic development activities within the City and to some extent in the region. It is envisaged that the staff of the Wollongong Office of Economic Development would also transfer over to employment with the new entity. As the start up for the new entity is planned for 1 July 2008, this Division will stay within Council’s structure for the interim period with a note that it is intended to be externalised.

Given the publicity of this proposal many submissions supported this move.



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Technology and Administration to include Integrated Customer Service

This Council is one of the few large Local Authorities in Australia which does not operate an integrated customer service centre or “one stop shop”. These services utilise a multi-skilled workforce to operate an integrated call centre, personal service centre and internet inquiry facility.

This approach involves use of specialist customer relationship management software which integrates with the rest of Council’s systems to ensure that requests are recorded and tracked and easy feedback is able to be provided to anybody wishing to enquire as to the progress of a matter. The integration of this with Council’s other systems will also allow the request to be tracked through to an individual, resident, property or asset depending on the request. Council currently has a project team in place planning the development of this facility. It is anticipated that this team will be in place in the final quarter of the 2008 calendar year and will largely involve the transfer of existing staff distributed throughout the building. It is proposed that the Division of Technology and Administration take control of responsibility for this service.

Additionally the Manager of Technology and Administration is Council’s Public Officer and it is intended that within this role is the coordination of Council’s role liaising with investigative bodies such as the Ombudsman, ICAC and potentially the Department of Local Government.

Finance largely unchanged

The Finance team as it currently stands will be largely unchanged. The one variation is that we will see an increase in “consulting” capacity whereby Finance professional staff will provide specialist advice on a project or term basis to other Divisions. For periods this may mean staff are embedded in the other Divisions. This allows for development of staff in a variety of operational areas of Council while maintaining core financial division standards and protocols. Additionally it is planned for asset accounting staff responsible to Finance Division leadership to be located within Infrastructure Division to oversee the Asset Accounting function. This will ensure appropriate standards are kept for preparation of financial statements etc. whilst focusing on the core role of providing useful information for making asset lifecycle decisions such as maintenance, replacement or refurbishment.

Commercial Projects and Property unchanged

This Division will stay largely unchanged, though it will take responsibility for finalising all tenancy agreements across the organisation as opposed to the current situation where there is some distribution of this task.

Additionally, should the recommendation to establish the Commercial Investment Fund be approved at the Council Meeting of today’s date, this Division would have the prime responsibility for administering and investing the assets of this Fund.

Human Resources and Industrial Relations to be renamed Human Resources – organisational development activities centralised

The working party wished to create simple meaningful titles so recommend that the title of this Division be reduced simply to Human Resources. Currently Council operates most of its organisational development activities within Human Resources but the currently latent Business Excellence activity is located within Corporate Planning and Business Improvement. It is proposed that this responsibility be located with the rest of organisational development activity in Human Resources.

Additionally, staff recognition and reward activities which are currently located within the Corporate Planning and Business Improvement Division logically also fit within the organisational development arm of Human Resources Division.



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Strategic Planning land use planning and Development Assessment to be located within an integrated City Planning Division

Council created the City Strategy Division some time ago to progress a number of strategic initiatives which had stalled. However recently the majority of these big ticket items have either been finalised or are close to completion. These include the City Wide LEP (including the Escarpment planning issues), the City Wide Residential DCP, the City Centre LEP and the West Dapto LEP. This period of intense major policy development is now nearing its end. There will be ongoing work in bedding down and refining these new planning instruments as well as numerous planning studies into various locations. However for this phase, there is merit in having the strategic planning staff working closely with staff doing the development assessment work to ensure that any bugs in the instruments can be taken out as quickly as possible. For this reason it is proposed to create an integrated Division dealing with town planning issues. It also presents an opportunity for staff rotation between strategic planning and development assessment roles allowing greater career development opportunities for professional planning staff.

This was a common theme in a large number of submissions received.

There will always be arguments for dedicated or integrated strategic planning functions and the working party felt it is entirely dependent on the phase the organisation is in. At this point we are in the implementation phase, so an integrated solution is most suitable for the medium term.

The City Planning Division also takes responsibility for Tree Management orders which were previously the responsibility of the Environment and Health Division. This is effectively a development assessment role and this move was suggested in a number of submissions from staff.

It is also intended to develop an integrated development assessment service within the City Planning team. It is envisaged that resources employed by the Infrastructure Division will be embedded within the planning team to allow integrated planning assessment while also recognising the need for professional support and guidance from an engineering division. This recognises that a key outcome of their work is ensuring the quality of assets to be donated to Council by developers such as roads or drains or footpaths. A failure in this process means that Council is left with assets that are either not fit for purpose or have high maintenance needs.

An increased focus on regulatory and compliance issues

The working party felt that Council currently did not have a strong enough focus on compliance issues and planning compliance in particular. Whilst resources to perform these tasks exist within the organisation, they are distributed within the current Divisions of Development & Compliance and Environment & Health, and the working party felt that they are not strongly enough focused upon. This Division takes the Ranger type areas, animal control, parking enforcement, protection of the environment and adds the enforcement of development activities such as building and planning compliance.

The establishment of an integrated compliance area was suggested in a number of submissions.

Library integrated into Community and Cultural Services

This move has been foreshadowed by this occurring in a temporary manner for the last couple of months. The underlying logic in this change is Council’s long term strategy of integrated library and community centres as is currently in place at Corrimal and Dapto, under construction at Thirroul and planned for Warrawong. These facilities have been very successful to date, and the change in structure allows both an opportunity for further integration of library and literacy into broader community activities, and also to streamline management of this function and particularly these facilities.

The rise of the Internet is reshaping the traditional library service delivery model and the broader focus of its melding into the social and cultural activities of Council and the community will assist in redefining the future of the City’s library service.



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There will also be an opportunity to seek synergies in the community volunteer activities operated out of the two previous divisions.

Several submissions suggested this integration.

In addition the community engagement function which currently sits within Community and Cultural Services Division will be moved to integrate with the Media and Public Relations area with which it is closely aligned. This will require some transition as this role is currently integrated into the social planning function which will remain in Community, Cultural and Library Services.

Infrastructure Division created to manage the entire asset life cycle

Council tonight considers the Review Today report which looks at Council’s long term financial sustainability and in particular its capacity to repair, refurbish and replace its assets as they become due. This is no doubt the single most significant challenge for this Council over the next ten years. In order to do this more resources need to be directed to our assets but we also need to apply much more attention to what we do and when we do it with these assets be they roads, pools, footpaths, buildings, drains or playground equipment.

Currently Council’s asset management responsibilities (in the broadest terms) are distributed throughout the organisation in an uncoordinated and incoherent manner. Major assets are constructed by many Divisions and without a focus on the ongoing lifecycle implications of the assets. Strategic plans are developed by City Strategy without a close focus on deployment into future capital works programs and eventual construction. Works capital planning and project management in the past was undertaken by a number of Divisions. The emergence of the need for asset management planning and use of data from Council’s recently introduced Asset Management System means that the shape of work in this critical area will change dramatically.

The Infrastructure Division will take the majority of the existing Design Division, the engineering expertise of City Strategy and some professional staff from Works and Services Division. This new Division will take responsibility for whole of life management of assets including:

• Developing Strategic Infrastructure plans with clear linkages to other strategic documents such as such as traffic management plans or drainage plans;

• Asset Management Planning including the use of data to determine optimal timing for preventative maintenance, refurbishment, renewal, replacement or non replacement of assets;

• Development of an integrated Council wide 5 year capital works program largely fed from the two points above;

• Development and ongoing management of the annual Capital Budget, including project timing and budgeting;

• Development of ongoing asset operating and maintenance costs for inclusion in the forward financial plan and operating budget for projects within the Capital budget;

• Preconstruction for capital projects based on the five year capital program including ensuring client liaison, design, environmental acceptability, third party approvals and consultation;

• Project Management of construction including, tender management /budget agreement with City Works, project superintending, cost control, hand over to the client where appropriate and defect management.

• Specification of maintenance standards and service levels.

Infrastructure will also have the maintenance of Council’s Land Information Systems, Asset Management System and Geographical Information Systems which are key to the support of ongoing management of assets and land related activities.



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A number of submissions raised concerns relating to the lack of coordination of the planning, project, capital works and asset operations cycle. This structural change is a specific response to ensure that this is improved.

City Works to include Parks Maintenance and Waste and to have a strong focus on efficiency of operations

The reshaped City Works is to have a core focus on operational efficiency, understanding its costs and outputs and in particular management of logistics and staff. For this reason we see a concentration of Council’s “outdoor workforce” activities of operation and maintenance of roads, drains, parks, buildings as well as the operation of our waste management activities.

It is intended to bring routine parks maintenance under the control of the renamed City Works. This is to have all crews working out of a single depot under the one control, and to allow easy transfer of staff between parks tasks and other asset work to cope with seasonal fluctuations. Special high level botanical services will be provided out of the Botanic Gardens team within Environment and Recreation when required.

Waste Management activities such as management of our major contracts as well as street-sweeping, public toilet cleaning and the operation of our tips will also move to City Works. Much of these activities are based on the efficient deployment of staff and plant to perform scheduled tasks and have similarities in approach to programmed road or park maintenance.

It is envisaged that depots will initially be allocated block funds to undertake maintenance and minor capital tasks, however over time as asset information becomes more sophisticated, funding and expenditure will be allocated according to identified need, and resourcing will follow those funds.

In terms of capital projects, the Infrastructure Division will be charged with determining the best value for money way to deliver capital works. In doing this it will, on occasions, contract City Works to perform works and for other projects have the assets delivered by contract or a combination of in house resources and contract. Over time, as City Works understanding of both its costs and its strength and weaknesses grow, it is envisaged that City Works will be providing firm quotes to the Infrastructure Division for capital works either via preferred provider status or on some occasions, competitive tender. Additionally it is intended that City Works will over time “reshape” into certain specialisations delivering more service in areas where it can provide value for money to the community and withdrawing from those areas where it is uncompetitive.

This is a major change in approach for this area and will require a significantly greater focus on resources and costs, however over time the potential for efficiency gains are huge. It also has the potential to make Council’s outdoor workforce’s employment more secure by increasing their competitiveness and importantly allow this to be shown. This will be a challenging time for many in the organisation, however it is the only way in which we can effectively address our infrastructure crisis while still retaining a core service delivery workforce in this area.

Several submissions suggested the creation of a Division with a strong “doing focus”.

New Division of Environment and Recreation formed

A strong focus of submissions from staff was the duplication of roles and responsibilities between Recreation & Natural Resources and Environment & Health. With Waste and the Regulatory services areas being taken out of the Environment & Health Division, this only really leaves the environmental policy and educational components. It is recommended that this be merged with what is now known as Recreation and Natural Resources (less Parks Maintenance) to form a new Division known as Recreation and Environment. This will allow more effective interface in the management of lands under Council control which are held for environmental purposes but which are used for recreation purposes also. It can also raise the focus on “Healthy ecology – healthy community”. Many of our recreational assets are or directly interface with significant environmental assets. These include beaches, ocean pools, playing fields and walking tracks.



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Over recent years Council’s involvement in environmental activities has burgeoned and this change in structure will also provide an opportunity to review the needs, effectiveness and markets gaps for these services.

The duplication of the environmental activities of the current Divisions of Environment & Health and Recreation & Natural Resources was a consistent theme in a large number of the submissions provided.

Communications teams merged and combined with Corporate Planning

The report proposes the integration of Media and Public Relations, the community engagement function which is currently located within Community and Cultural Development and the Corporate Planning and Business Improvement Division into one team which reports to the General Manager.

Community engagement and media and public relations are a natural fit with blurry edges in their roles in the first place. Additionally, effective community engagement causes reactive work in the public relations team to decrease. Corporate Planning is a natural fit with the Executive and is effectively the codification of the work and the direction set by the Executive.

A number of submissions question the need for Corporate Planning and Business Improvement to stand alone, additionally some mentioned the advantages of integrating community engagement with the public relations arm of Council.

Staged implementation to be directed by the General Manager

The restructure as proposed has little or no change in some areas, but reasonably dramatic change in a few areas. Consequently, the implementation will need to be staged across the organisation and run at different speeds. For example the movement of the customer service project to Technology and Administration can occur very quickly, but the development of structures and roles within the Infrastructure and City Works teams will take some time to implement, and will take a significant amount of thought and negotiation.

The final “externalising” of Wollongong Office of Economic Development will not occur until the entity becomes operational on 1 July 2008 and this needs to be formally ratified by Council.

It is proposed that an implementation timetable is developed in conjunction with the Executive staff members and this is deployed at the appropriate speed in each Division.

Additionally many of the changes will need to be fully workshopped with staff to determine the best possible way to achieve an effective outcome. Following this process there are a likely to be a number of fine detail refinements in the structural diagram as presented. For that reason it is proposed that an implementation report be presented within 4 months that would outline progress of implementation as well as any changes that are recommended following the detailed analysis the proposal.

Process for placement of Staff

The changes in structure have no change on operation for the vast majority of staff though their reporting lines may change. There will however be change in the roles to be performed by a number of staff. In regard to contracted staff, the majority will be able to be best fitted into their roles as they will be largely unchanged or they are not combining a large number of functions from another area. While there is a large reduction in the number of contract managers positions, there are also a number of vacant roles filled by people acting in higher roles. This provides the opportunity to implement the structure with relatively low amounts of staff displaced and consequent cost.

There will, however, be some cases where roles have effectively been combined and there are more than one contracted staff member who would have a claim on the role in terms of terms of responsibilities and experience, or where there are very major changes in responsibility. In these cases there will be internal merit based selection in the first instance for Manager level roles. The Local Government Act requires all roles which are designated as Senior Staff however, to be



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externally advertised. The position of Executive Manager Operations has undergone little change, however the Executive Manager Governance and Planning combines major new responsibilities, and should be advertised externally.

In terms of non-contract staff, the vast majority will be directly unaffected, though their ultimate reporting relationships may change. Some managers however, may choose to change the structures within their Divisions to deal with the change in their responsibilities. Some Divisions will by necessity require structural change. In these circumstances staff will either be best fitted, or where there is no best fit there will be internal merit selection. It should be noted that under the terms of the current enterprise agreement there are no forced redundancies for non-contract staff. CONSULTATION AND COMMUNICATION

This report was prepared under the guidance of the Council Structure working party consisting of Councillors Gigliotti, Kershaw, Jonovski and Griffiths as well as independent John Kleem and the General Manager. All Staff and Councillors were asked to provide input and 34 submissions were provided. An offer was made for Councillors to discuss the directions of the working party during the process. Conversations were had with a number of Councillors over this period outlining the general directions being taken. A restructure is a difficult process as it potentially changes people’s roles and in some circumstance may impact on their future in the organisation. In those circumstances there has been limited discussion with some staff about the implementation and directions of discussions. There was a Councillor Briefing Session held on Wednesday, 26 September 2007 to consider the draft proposal. Following the adoption by the Council of the updated structure there will be extensive consultation with impacted staff in order to allow the most effective transition. There may be minor changes to the proposal following this process and this will be put to Council for consideration in the implementation report.

PLANNING AND POLICY IMPACT

The restructure places the Corporate Planning function as part of the Executive Team reporting direct to the General Manager. This reinforces that the Corporate Plan and the long term financial plan that accompanies it, are the codification of the direction set by the Council in consultation with the General Manager. The creation of Infrastructure Division is a clear attempt to improve the focus and effectiveness of planning and implementing asset maintenance, refurbishment, renewal and retirement. It is envisaged that Council will direct further funds towards this caring for our assets over time and this structure will assist in making sure best value is provided from these increased resources

ECOLOGICAL SUSTAINABILITY

The proposal as outlined has no material effect on ecological sustainability. RISK ASSESSMENT

With any change there is deployment risk, however almost all of the structural settings are based on established structures existing in local governments and other organisations throughout Australia. The three person executive model is reasonably uncommon, however it worked quite effectively in this organisation in the 1990’s. The advantage in the model proposed is that should it be considered that an additional executive/senior staff member be required, (Most probably in a dedicated



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Planning and Environment role) it is easily achieved (though including on-costs and administrative support it would cost an additional $300,000).

FINANCIAL IMPLICATIONS

The structure as outlined will create direct savings of approximately $600,000 in terms of two executive staff members including on costs and administrative support. The costs of administrative support may take time to realise, as these staff will need to be accommodated in the organisation. In addition the reduction of three senior manager’s roles with an allowance for on costs and some administrative support will save in the order of another $550,000. There will be some potential one off restructuring costs and these are unlikely to exceed $200,000. Additionally there may be some additional costs involved in enhanced services which have been identified via integrated customer service and some of the coordination roles of the Infrastructure Division. Both these areas would be expected to be cost neutral in the medium term but may include some one off additional costs as they are bedded down. Additionally there may be a need to review some salaries to take into account increases in responsibilities. This is unlikely to cost more than $50,000 per annum. In summary with all transition costs, in the first full year of operation the new structure would expect to save $500,000 and approximately $1m per year from then on.

OPTIONS

Council may wish to revert to a more traditional structure with three executive staff. In that case you could create a position of Chief Environment and Planning Officer and have the Divisions of Environment and Recreation, City Planning and Compliance and Regulation reporting to this position. This would have a net additional cost, including on costs and support, of approximately $300,000 per annum. CONCLUSION

The structure proposed streamlines Council’s senior management, providing a substantial reduction in ongoing cost to Council. It provides a simpler structure with a philosophy of “let the managers manage”. There have been attempts where possible to make organisational titles straightforward to assist in a better understanding of roles and teams. A number of areas of concern which were raised in staff submissions have been addressed. One major focus in the new structure will be on better coordination on the asset cycle from strategic planning into out years of the corporate plan, having design and preconstruction done in anticipation, so that when Council firmly commits to a project it is ready to be implemented. Additionally a centralised expert capital coordination team will reduce the chances of time, cost and functionality problems with projects. Another significant focus will be on an increased level of internal charging of services to more fully reflect the total costs of services to the community, but also to focus internal service delivery teams on the cost and quality of their services. The revised structure should increase customer service by creating a better aligned and more intuitive structure such as an integrated compliance area, the establishment of an integrated “one stop shop” customer service facility offering longer hours, and by better coordinating activities in our integrated library and community centres. All in all, this restructure has the potential to commence the long term positioning of Council as a lean and cost effective organisation that better understands the services it delivers and the costs of these. Flowing from that, will be greater opportunities for the community via its elected Council to over time prioritise the type, quality and quantity of services it is willing to pay for.



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All other headings have been considered but are not relevant.

Name Position Title Date Signature This report provides Councillors with all the relevant information and is correct at the time of writing.

This information has been relied upon in preparing the report and its recommendations. Signed by:

D Farmer General Manager 27/09/07

ATTACHMENTS

1. Proposed Organisational Structure2. Current Organisational Structure

Page 34 ATTACHMENT 1 - Proposed Organisational Structure


ATTACHMENT 2 - Current Organisational Structure Page 35


Documents

Review of Organisational Structure - Wollongong 4... · Extraordinary Meeting of Council Page 24 2 October 2007 Wollongong City Council ITEM 4 REF: CM186/07 LATE BUSINESS - REVIEW