At our Audit Committee meeting on Friday, September 18th, I made the following motion,

That Audit Committee recommend to City Council that Administration return to the fall Supplemental Operating Budget Adjustment (SOBA)/Supplemental Capital Budget Adjustment (SCBA) deliberations as appropriate with two scenarios to reduce supervisor full-time equivalents (FTEs) by 5% (up to 92 FTEs /$13.2 million) and 10% (up to 184 FTEs/$26.4 million), aligning with page 18 of the September 18, 2020 Office of the City Auditor report OCA00035.”

Cost Reduction Scenarios

This motion was not made lightly as it is expected to result in a reduction to the City of Edmonton’s workforce. Therefore, I’d like to provide a detailed explanation of why I brought forward this motion.

Early this September, the Office of the City Auditor released the first part of our City Productivity Audit. I would highly encourage you to review it in full as it provides a thorough analysis of the City of Edmonton’s workforce, organizational structure, supervision, and management. This audit was originally approved by the Audit Committee in late 2019 to be a part of the City Auditor’s 2020 work plan.

For reference, every year, members of the Audit Committee get the opportunity to sit down with our City Auditor and offer suggestions about what we want to see included in the annual audit work plan. I have had the opportunity to serve on our Audit Committee since I was first elected and I now serve as the Vice-Chair of the Committee.

I first raised the idea of completing an updated City Productivity Audit in 2018. This was informed by a few different factors. The first was that the City Auditor’s previous City Productivity Audit was five and a half years old and I felt it was time for a refresh. The second reason was a letter we received from one of our civic unions. CSU 52 provided council with a letter in 2018 identifying concerns with staffing levels and felt there was an opportunity to provide better value for money.

The latest audit raised concerns about the growth of middle management (22%) and front-line supervisor (19%) positions since 2017. The recommendation from the Office of the City Auditor was to Administration review supervisor responsibilities in the organization in order to reduce costs and layers of supervision. Our City Administration accepted the recommendation and stated in their presentation that this review was already underway.

While the review is already underway, I felt it was important to bring this motion forward because as we all know, these are incredibly challenging economic times. Therefore, it is important for council to provide clear direction to help manage our expenses.

I believe that no tax increase will be acceptable for 2021 and in order to achieve that outcome, we need to offset the budgetary impacts of COVID-19 and reduce some of our regular operating expenses. This audit has provided us with the necessary detail to take specific actions to address our costs.

The chart in the image above provides different scenarios for reductions. The reason I didn’t include the 15% scenario was that I wanted to have the additional parts of the City Productivity Audit to be completed to help guide additional actions. The additional parts provide benchmarking and a specific productivity analysis throughout the organization. I expect that further changes will be made in 2021 but they will be done with the benefit of the other parts of the audit.

We also learned during the discussion that there are currently 146 vacant middle management positions and while that is still less than the 10% scenario, with the current vacancies we could make the necessary changes with limited impact to people. While I’ve seen some comments online that suggest that City employees aren’t providing value, in my experience almost every person working with the City of Edmonton is working very hard every day to serve all Edmontonians. This means that any changes will impact the services and programs that are provided by the City of Edmonton.

For any staffing changes that might occur, I would hope we look to early retirement options for those who might be interested before taking other actions. City Council will vote on the motion at the next council meeting (September 21st, 2020) and then the scenarios would come forward in a few months during our budget deliberations. To be clear, I think we will likely need to choose the 10% reduction scenario in order to achieve a 0% tax increase for 2021.

As noted at the beginning of this post, I did not make this motion lightly. Anytime we are discussing changes within the organization that can impact people, we need to be thoughtful about how those changes are made. As we continue to deal with one of the greatest economic crises in decades, council needs to be willing to make difficult decisions about our budgets. There will be more challenging decisions in the coming months but they need to be made in order to provide financial stability for all Edmontonians.

10 Comments

  1. KEN on September 20, 2020 at 7:50 am

    This doesn’t go far enough, the same union that brought up these concerns was also the one that received 9 plus percent raise of 4 years as well. There needs to be that reduction of salaries across the board. When the city economist had said the continued spending and debt serving costs were going to be problematic for the city’s budgets going forward. With the constant double the inflation tax increases which also are unsustainable. This would be a good start to a financial reckoning for the city to help taxpayers from these tax increases.

    • Claire Ashton on September 20, 2020 at 2:50 pm

      agree with Ken

    • Andrew Knack on September 22, 2020 at 2:00 pm

      Thank you for the message Ken. This motion is just one body of work that needs to occur but as noted in the blog post, there are many other areas we will be working through. The additional work will be informed by the additional parts of the City Productivity Audit.

      I would also note that over my time on council, I don’t believe there have ever been any tax increases double the rate of inflation. Since 2017, I believe three of the four increases have been at or below inflation. I know that in 2017, that was the lowest tax increase in a decade. In 2019, that became the new lowest increase in a decade. For 2020, we had the lowest increase in 23 years. I believe 2021 will be the first time in 24 years that there will be no tax increase. So we certainly have work to do but the record over the last number of years has been trending in the right direction. Thanks again for the message and have a great day.

  2. David R Hunt on September 21, 2020 at 9:48 am

    No tax increases for 2021? How about a tax reduction? This council has been spending unsustainably for years. Lower taxes, get rid of photo radar and do what cities are supposed to – maintain infrastructure (snow removal, grass cutting and pothole repairs). Look at this city. It is a disaster. Downtown is destroyed, chronic construction congestion, unlawful campgrounds and urban sprawl. Worst council in Edmonton’s history.

    • Andrew Knack on September 22, 2020 at 2:04 pm

      Thanks for the question David. We did have a chance to discuss the idea of a tax decrease during yesterday’s virtual town hall which I will link to here. During yesterday’s discussion, we also discussed the new City Plan which would begin to address the outward growth of our city. Once you have a chance to review that discussion, please feel free to reach out to me at (780) 469-8122 and we can discuss this further. Thanks again and have a great day.

  3. Alana on September 21, 2020 at 1:07 pm

    I agree with the above statement from Ken. The 10% reduction in middle management is a start but salaries need to also be looked at across the board from our mayor to city council and any other higher salaried staff. Unfortunately, this is necessary so that those blue collar workers aren’t responsible for shouldering the majority of the financial burden.

    Cut unnecessary programs and delay new projects. Maintenance of current parks and roadways, snow removal and essential services are where $$$ should be directed. Looking at the efficiency of projects. I cant tell you how many times I’ve seen roads freshly paved and new curbs poured only to be torn up 2 weeks -1 month later. The wastefulness and lack of efficiency is costing this city and subsequently tax payers a substantial amount of money that could be prevented. Andrew has an audit been done to factor in these such costs as well????

  4. Stephen Poole on September 21, 2020 at 5:22 pm

    I experienced a staffing review with Capelle: https://www.capelleassociates.com/. Website is worth a look. Some of their resources / services might be of interest.
    Here are a few pointers: No supervisor or manager should have fewer that 3 direct reports. Ideally they should have 4 – 6. Front line supervisors overseeing workers doing routine basic tasks may supervise a group of 20 or more. E. g. for custodial services: 120 Custodians could report to 6 Supervisors who report to 1 Manager. For an accounting operation, 6 Accountants (Professionals) could report directly to 1 Manager. For an engineering office: 20 Drafting Techs could report to 1 Supervisor. That Supervisor, plus 4 Professional Engineers and 1 Senior Engineering Technologist could report to one Manager. 4 – 10 Engineering technologists could report to the Senior Engineering Technologist. Project teams could be set up within this structure on a dynamic basis depending on the scope and complexity of each project. (All staff numbers are FTE’s, not head count) For routine work: crews or teams might have a crew or team leader who is not classed as a supervisor. Do not create unnecessary levels in the organization. CoE should probably have 6 levels: 6. City Manager, 5. Deputy City Manager Manager (dept. head), 4. Director/Branch Manager, 3. Manager/Professional, 2. Supervisor, 1. Worker. A reduced number of depts/brances (6?) could have a huge compound effect on numbers in the middle levels. Make sure Supervisors actually have a supervising function and Managers are actually managing, and that these are not just positions created artificially in an org chart.

    • Andrew Knack on September 22, 2020 at 2:07 pm

      Thanks for sharing that Stephen, I appreciate it.

  5. COE Employee on September 22, 2020 at 10:17 am

    Hi Councillor Knack. I want to first thank you for fighting to cut middle management that has become so bloated and unccessary at the City. I have a unique insight into this because i have been working in the CIty for the past 15 years across different groups and departments and have seen the ridiculous growth of government and bueracracy since 2017’s disastrous re-organization. Because of what i see as a constant waste of tax payers dollars i no longer believe in government and have become jaded. The amount of middle managers is astounding. I have seen managers manage one person and make more than $20K than the person who they are managing who is literally doing the same job.

    Prior to 2017 things went reasonably well. Our teams were well equipped and well staffed to deliver services and projects to the public, but the re-org of 2017 destroyed everything that worked and created more red tape. In addition to that public engagement has cost us a lot of money and a lot of the time it is not needed on certain things we are working on. I read the audit regarding middle management and while i am happy with it’s findings it fails to address the actual difference these middle managers make. IN reality these middle managers don’t add any value as I see it. If you were to ask most frontline staff what directors and general supervisors do they couldn’t tell you. I certainly can’t. Our teams have become so bloated with middle management and having too many cooks in the kitchen that things cost more, take longer and deliver the same if not worse level of service. I am only speaking from my own experience but frontline staff don’t trust the leadership team to do the right thing. The 2017 employee engagement survey is a perfect example of this. Many of the people appointed to director and branch manager roles are yes people and as far as i am concerned it will be frontline staff who actually make a difference who will be layed off.

    • Andrew Knack on September 22, 2020 at 1:46 pm

      Thank you very much for sharing this with me, I really appreciate it. I believe the next parts of the audit will inform the additional work we will need to take in order to address the concerns you have raised. To your last point, the motion would not change the frontline staff. Thanks again for the message and please feel free to reach out (anonymously or directly) if you want to chat further.

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