Panel: Detroit water, sewer department should cut 81% of workers to slow soaring rate

[corktownyuppie]

My father worked for the DWSD and was a union member. The stories of inefficiency he told me were atrocious. What's interesting is that:

[[1) There are too many job classifications
[[2) The people they will be hiring will actually be getting *higher* pay, not lower pay. Doing much more, with fewer, higher paid employees at a lower net cost? Makes you wonder how they ever let it get this bad.

Also makes you wonder how much inefficiency we'd find if we did the same audit for every department in the City.

http://www.freep.com/article/2012080...-soaring-rates

“We found the organization is siloed, with inflexible job descriptions, multiple reporting levels and a lack of training,” said Brian Hurder, vice president of EMA. The reports says the department has 257 job classifications and that number will fall to 31 under the plan. The study found the average cost per employee was $86,135 and by reducing the workforce, the department plans to reduce costs by as much as $138 million annually.

Hurder noted that savings can only be achieved by upgrading technology, outsourcing and retraining of employees for new skills.

McCormick said the department will expect employees to have higher, more diverse skills and it will likely pay them more. Cox’s order exempts the water department from many of the pay grades and other work regulations that other city employees fall under.

[internet_pseudopod]

How can I trust any company that cant produce a proper report in pdf format?

[D_Town]

How can I trust any company that cant produce a proper report in pdf format?

LOL!!! I can't with that photocopied sheets turned landscape

[antongast]

The city civil service bureaucracy is a mess for sure. I think every department would benefit from a more streamlined set of job descriptions, and I also think it needs to be easier to hire from outside the system for jobs that require specific skillsets instead of just promoting existing city employees.

In this case, it seems like the main benefit of outsourcing a lot of these jobs is that you can bypass the city bureaucracy, but if you fixed the bureaucracy you wouldn't need to outsource as much. It seems really inefficient to have vendors skimming money off employees' paychecks just so the city can avoid having to follow its own rules, although I'm sure the vendors have no complaints about the arrangement.

[Detroitnerd]

I wish just once they would send an efficiency expert to a large New York bank. Just once.

[HistoryNotHisStory]

DWSD needs to eliminate all of it managers and hire and re-hire new ones according to expertise and ability.

The present and existing managers have been there too long.

[bailey]

DWSD needs to eliminate all of it managers and hire and re-hire new ones according to expertise and ability.

The present and existing managers have been there too long.

I would imagine that could be said about every single operational unit of the CoD. Only way it's happening is through EFM or BK though.

[Lowell]

DWSD needs to eliminate all of it managers and hire and re-hire new ones according to expertise .

How do you propose to run the system in the meantime?

[corktownyuppie]

The city civil service bureaucracy is a mess for sure. I think every department would benefit from a more streamlined set of job descriptions, and I also think it needs to be easier to hire from outside the system for jobs that require specific skillsets instead of just promoting existing city employees.

In this case, it seems like the main benefit of outsourcing a lot of these jobs is that you can bypass the city bureaucracy, but if you fixed the bureaucracy you wouldn't need to outsource as much. It seems really inefficient to have vendors skimming money off employees' paychecks just so the city can avoid having to follow its own rules, although I'm sure the vendors have no complaints about the arrangement.

I, too, would rather fix the bureaucracy rather than outsource as much. It is inefficient to have vendors taking a profit off of employees' paychecks if we could just institute the changes without the vendor.

The problem is that the bureaucracy is not designed or incented to self-correct. Look at AFSCME's response. Rather than say, "We recognize that many efficiency gains are long overdue, and that we have much room to streamline our operations when we make some much needed changes. We, of course, disagree about the conclusion that we could get rid of 4 out of every 5 employees. But message received...we can do better with less, and we must."

No, instead we got..."Hell no, we won't go."

The whole system just needs to be re-designed. And if the fear is that vendors will be profiting off the back of employees, then every union should be allowed to match the winning bid. Then the union can split the "profit" among itself, like a co-operative.

[corktownyuppie]

I wish just once they would send an efficiency expert to a large New York bank. Just once.

Once? It happens multiple times per year at every single bank. That's how Detroit Bank and Trust got bought by National Bank of Detroit which got bought by Bank One which then got merged with Chase Bank which got merged with JP Morgan...at each step, fewer and fewer employees were required to produce the same output.

Standard Federal combined with LaSalle Bank which was bought by Bank of America which merged with Merrill Lynch...at each step, fewer and fewer employees required.

At Hartford Life, efficiency experts hired by the company determined that the life insurance and annuity business -- which they've been doing for over 200 years -- was no long profitable enough to justify all their employees. They laid off their entire marketing force -- thousands of employees -- all at once earlier this year.

No, the reason why this is news? Well, when you decide to hold off on making needed cuts for over 30 years -- and then are forced by technology and market forces to make 30 years of delayed cuts all at the same time? Well that's gonna make the news.

The other reason why this is news? It's because it's the public sector. Efficiency experts come in all the time to Fortune 500 companies and shift the strategic aims of the companies. The difference is that in the private sector, this is our way of life. In the public sector, it's like a foreign language.

[rb336]

There is always room for improved efficiencies, but Detroit's water rates are NOT rising any faster than others around the country:
http://www.circleofblue.org/waternew...or-u-s-cities/

Further, DWS produces some of the best water in the country, and its sewage treatment has had fewer issues than, say, Chicago's or, even worse, Milwaukee's. The soaring rates are not the fault of the DSW, but rather of the municipalities who buy the water at a lower wholesale rate and jack up what they charge their citizens

[Detroitnerd]

Once? It happens multiple times per year at every single bank. That's how Detroit Bank and Trust got bought by National Bank of Detroit which got bought by Bank One which then got merged with Chase Bank which got merged with JP Morgan...at each step, fewer and fewer employees were required to produce the same output.

Standard Federal combined with LaSalle Bank which was bought by Bank of America which merged with Merrill Lynch...at each step, fewer and fewer employees required.

At Hartford Life, efficiency experts hired by the company determined that the life insurance and annuity business -- which they've been doing for over 200 years -- was no long profitable enough to justify all their employees. They laid off their entire marketing force -- thousands of employees -- all at once earlier this year.

Oh, did I say efficiency expert? I'm sorry.

I meant the police.

[Wesley Mouch]

...<snip>...
Look at AFSCME's response. ...<snip>...."Hell no, we won't go."

The whole system just needs to be re-designed. And if the fear is that vendors will be profiting off the back of employees, then every union should be allowed to match the winning bid. Then the union can split the "profit" among itself, like a co-operative.

I like your idea.

The core ideal to be pursued is to reduce the burden to the taxpayer/ratepayer. If the costs go down, why is it a problem if it goes to a vendor who will 'profit off the back of employees'.

However it clearly would be better to allow workers who are progressive, skilled, needed, and flexible to be better paid. But that's not the Union way, as evidenced by AFSCME's knee-jerk response.

Much more than wages, the problem with the structure of union law is 'siloed' jobs. Work changes. Needs change. There's no incentive to the Union to allow change. They should NOT be able to stand in the way of progress.

Why do you think the Japanese imports often pay MORE than union wages? Because they have the flexibility to build their cars will the needed amount of labor. No need to staff a machine designed for two workers with six.

So these consultants are crafting a solution that is all that's left. Reduce the workforce -- but increase individual pay in exchange for work rule relaxation.

Because the Union refuses to do what's best for itself and its workers in the long run, but holds dearly onto it inefficient ways of the present.

A new way of thinking is required. Your solution is elegant. Find a way to let the workers [[all of them by the way, not just the senior workers) share in savings. Let those laid-off keep some savings coming to them in the future, in exchange for leaving and finding other productive work.

[[Not sure if its still true, but a few years ago, every crew on the water board had a guy who did nothing except watch the work to 'certify' that the fire hydrants still worked right. No real work. That's just absurd.)

[antongast]

I, too, would rather fix the bureaucracy rather than outsource as much. It is inefficient to have vendors taking a profit off of employees' paychecks if we could just institute the changes without the vendor.

The problem is that the bureaucracy is not designed or incented to self-correct. Look at AFSCME's response. Rather than say, "We recognize that many efficiency gains are long overdue, and that we have much room to streamline our operations when we make some much needed changes. We, of course, disagree about the conclusion that we could get rid of 4 out of every 5 employees. But message received...we can do better with less, and we must."

No, instead we got..."Hell no, we won't go."

The whole system just needs to be re-designed. And if the fear is that vendors will be profiting off the back of employees, then every union should be allowed to match the winning bid. Then the union can split the "profit" among itself, like a co-operative.

I agree with pretty much all of this. I think the blanket intransigence of the AFSCME locals around here is both completely understandable given what's happening to organized labor in this country, and also really frustrating and counterproductive. I wish the locals would get some more progressive and dynamic leadership that doesn't have the knee-jerk adherence to established ways of doing things, and I also wish the free-market think tanks and deep-pocket right-wing donors would stop trying to destroy organized labor long enough for the rest of us to actually engage productively with union leaders about some of these real issues.

As for the vendors, I imagine they're profiting more off city taxpayers than their own employees, since it's easier to bill the city for the surplus than to try to attract qualified workers at below-market wages, but that's just a gut feeling, not a factual argument.

[Wesley Mouch]

...I also wish the free-market think tanks and deep-pocket right-wing donors would stop trying to destroy organized labor long enough for the rest of us to actually engage productively with union leaders about some of these real issues...

I think the rhetoric in our debates is destructive. [[I suspect you could find some in my posts too.)

Sure, there are some who want to 'destroy organized labor'. But I hope many more that just don't see any progress. I see little evidence of labor reforming itself. My compliments to the SEUI. They seem to get it. They care about workers -- from what I see. Maybe because they represent many at the bottom end of employment, they do better than most at really trying to make life better for workers.

AFSCME. Just defending their above-average gains on the backs of the taxpayer. Not so much a union as a private club, keeping undesirables out.

[antongast]

Sure, there are some who want to 'destroy organized labor'.

Not just "want to." They've already destroyed private-sector unions, and public-sector unions are now in the crosshairs. AFSCME leaders feel embattled because they are embattled, and it's hard to get people interested in mutually-beneficial bargaining when they're fighting for survival against better-funded opponents with lots of political momentum. I don't think what they're doing is smart, I don't think it's good for either the cause of organized labor or the people of Detroit, but I completely understand why they're doing it, and it's not because they're greedy and evil.

[rb336]

The core ideal to be pursued is to reduce the burden to the taxpayer/ratepayer. If the costs go down, why is it a problem if it goes to a vendor who will 'profit off the back of employees'.

in the end, you would get a situation where service is reduced, employee wages are reduced, your water bill still goes up, but the increase goes into some fat cat's wallet because he's not interested in providing good, clean water, he's interested in sucking as much money out of the system as possible. Remember when they outsource sludge hauling to Synagro?

[corktownyuppie]

Oh, did I say efficiency expert? I'm sorry.

I meant the police.

I could get on board with that.

[Kevgoblue]

The whole system just needs to be re-designed. And if the fear is that vendors will be profiting off the back of employees, then every union should be allowed to match the winning bid. Then the union can split the "profit" among itself, like a co-operative.

Sounds good. However, the cynic in me questions whether this latest attempt at the privitization of publically funded services can actually be performed with only 19% of the current workforce.

Put a clause in the contract that service levels and water quality must remain at their current levels. And while maintaining this service level, the city will not pay for any overages to the contracted cost. All too often these outsourced jobs wind up coming in at 300% of the original contract cost at the end of the day.

[Motor City Sam]

I'd like to know a bit more about this consulting firm and about what they were tasked to do before accepting their recommendations as gospel. Have they done this type of analysis for water systems before? What methodology did they use to come up with their suggestions? How did they get the contract to do this? Do they have connections to anyone in the area?

Of course, given the state of our local media, I have no expectation of having these questions answered.

According to a quote from the director, "these changes are needed to slow water rate increases." I'd like to know if that was the focus of the study: Find ways to cut water rate increases. If so, I wonder if the consulting firm took into account the ability of the Water Department to maintain a level of service, provide clean water, and conform to the Clean Water Act after cutting 81% of it's workforce.

I have worked for three consulting companies in my lifetime. I know that with some you can get them to produce a report that says what you want them to say. That is why we had widely diverging reports from firms on the impact of the film industry incentives in the State.

I'll adopt a wait and see attitude before I accept the validity of these conclusion. I will say I find it hard to believe that any organization can cut 81% of it's workforce and still do the job it is tasked to do.

And, just once, I'd like to see an idea for fixing an organization that does not include taking away jobs, income, and benefits from the working class as it's main tactic.

[eno]

When city departments closed down, i.e. the housing department or Detroit General Hospital, the employees from those departments were absorbed by the water department.

[bailey]

I'd like to know a bit more about this consulting firm and about what they were tasked to do before accepting their recommendations as gospel. Have they done this type of analysis for water systems before? What methodology did they use to come up with their suggestions? How did they get the contract to do this? Do they have connections to anyone in the area?

Of course, given the state of our local media, I have no expectation of having these questions answered.

According to a quote from the director, "these changes are needed to slow water rate increases." I'd like to know if that was the focus of the study: Find ways to cut water rate increases. If so, I wonder if the consulting firm took into account the ability of the Water Department to maintain a level of service, provide clean water, and conform to the Clean Water Act after cutting 81% of it's workforce.

I have worked for three consulting companies in my lifetime. I know that with some you can get them to produce a report that says what you want them to say. That is why we had widely diverging reports from firms on the impact of the film industry incentives in the State.

I'll adopt a wait and see attitude before I accept the validity of these conclusion. I will say I find it hard to believe that any organization can cut 81% of it's workforce and still do the job it is tasked to do.

And, just once, I'd like to see an idea for fixing an organization that does not include taking away jobs, income, and benefits from the working class as it's main tactic.

I'll wait and see too, but with this:

The department's outdated job classifications still include "horseshoer," said Brian Hurding, vice president of the consulting company EMA. There is one staffer in that classification,but the employee also is classified as a welder

From The Detroit News: http://www.detroitnews.com/article/2...#ixzz233sd1Bec.

From The Detroit News: http://www.detroitnews.com/article/2...#ixzz233rNiuwW

I'm guessing it'll get by with one less "horse-shoer"...who happens to weld too.

And, just once, I'd like to see an idea for fixing an organization that does not include taking away jobs, income, and benefits from the working class as it's main tactic.

And just once, I'd like to see a public employees union suggest a fix that includes aligning costs with service through increased efficiency....instead of threating a strike if anyone suggests that Horse-shoers probably don't need to be employed by the DWSD in 2012.

[Motor City Sam]

I'll wait and see too, but with this:

I'm guessing it'll get by with one less "horse-shoer"...who happens to weld too.




And just once, I'd like to see a public employees union suggest a fix that includes aligning costs with service through increased efficiency....instead of threating a strike if anyone suggests that Horse-shoers probably don't need to be employed by the DWSD in 2012.

The horseshoe anecdote makes for a nice inflammatory example, but in the article I read today it was clarified that the employee was classified as both a welder and a horseshoer and welding is his/her main job. It's not like there is a guy sitting around waiting for a horse to come by to put a shoe on it. He is classified as a welder, his primary job, and so has another, outdated classification. I don't doubt that like most old organizations the WD has too many job classifications, but let's not act like they are employing people to shoe horses.

And public employee unions have been giving back in terms of wage concessions, head count, benefits, etc., for years now. We've seen plenty of 10% pay cuts accepted by unions in recent years, along with converting pensions to 401Ks, increased class sizes for teachers, etc. You say you'd like to see public unions suggest a fix that includes aligning costs with service; I've seen it happen often, especially in recent years.

And please show me where the union for water department workers threatened a strike over the suggestion that horse shoers are not needed. Otherwise, it's just exaggerated rhetoric designed to support the viewpoint that unions are intractable and unrealistic.

[Detroitnerd]

It seems kind of silly to me to put so much blame on the workforce when 40 percent of the water department's expenses are debt service ... but, in this world, workers are always guilty until proven innocent, and bankers can't be touched at all ...

[jpbollma]

It seems kind of silly to me to put so much blame on the workforce when 40 percent of the water department's expenses are debt service ... but, in this world, workers are always guilty until proven innocent, and bankers can't be touched at all ...

Organizations within the government need to be realigned periodically just as in the private sector. I just wish workers who may be in the private sector would stop and think about why there is the largest income disparity in the history of this country right now and why their wages/benefits continue to drop. It is because of the tax breaks and loopholes to the banks/wealthy/corporations. This is not because a clerk in Detroit makes $16/hr or some such nonsense. Private sector pay/benefits have dropped steadily and in line with the drop in union membership. You would think more people would see this. Although government workers do sometimes need to take cuts or have lay offs, this is not going to make the private sector middle class any more wealthy. It's right-wing snake oil meant to knock out one of the last sectors that actually provides decent pay to American workers.