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Reinventing Phoenix’s Departments: Starting From Square One

By Ed Zuercher 

It has been 132 years since Phoenix, Arizona was incorporated as a city. Since then, the city has grown in so many ways. Population has increased from 2,500 to around 1.5 million. A town that was once, one mile long, is now more than 500 square miles. And it’s hard to believe that Phoenix’s first horse-drawn streetcar made its debut in the late 1800’s. Today, the city’s expanding light rail system is at the heart of a mecca of multimodal transportation.

Ed Zuercher 4321 9-18-13

Acting City Manager Ed Zuercher

With growth comes stability. Phoenix’s 30 city departments are well managed and operate at a high level of consistency. So, why mess with a good thing? The recession. It left Phoenix with a $277 million deficit and forced city management to step back from what felt comfortable and reconsider how some departments were organized from a different perspective. This led to a reawakening of sorts in some departments and serves as a model for success for the future.

One of those departments is finance. In an effort to turnaround the looming deficit, all departments were asked to make equal reductions. Chief Financial Officer Jeff DeWitt noticed that some areas of operation were becoming too lean which was crippling how the department functioned. Instead of simply accepting this fate as a product of a down recession, DeWitt approached city management with the idea of reinventing his department.

It started with a three-day workshop. Employees were asked to explore what they did each day and how they could do it better. They also took a comprehensive look at similar departments across the country, trying to understand what worked well for others. The results were remarkable and led to sweeping changes in four areas.

Strategic Reductions

While some areas were too lean, others were too staff-heavy and could operate more efficiently through consolidation. Instead of implementing across-the-board reductions, DeWitt decided to try something different. He made reductions only in areas that made sense, and in many cases, those reductions were greater than what city management had asked for to begin with. As a result, this led to higher levels of efficiency in a way that did not harm the department.

Reclassifying Employees

It also became clear that several employees were working in the wrong classifications. For example, the department was in the process of transitioning from a manual to digital data system. This called for two technology specialists instead of the five existing account clerks. Overall, what the department needed was not more staff, but the right kind of staff in the right kind of positions. In all, more than 70 positions were identified for reclassification through attrition.

Restructuring the Physical Layout of the Department

As the department grew, new positions and functions were added in layers, similar to a storage unit that is in need of reorganization. As more layers of boxes are stacked where there is room, it may be easy but not practical in the end. In the case of the finance department, staff with similar responsibilities was moved to the same area, increasing productivity.

Cultural Shift

These changes called for a cultural reorganization. How would employees feel empowered to embrace these changes, especially if it meant handling more responsibility with fewer resources?

Staff was asked to submit ideas about how to make the workplace better and put it into action, a process consisting of four simple ideas: see it, own it, solve it, do it. An intranet system was created, encouraging employees to submit suggestions. From there, a team was assigned to look into the suggestions and find a way to implement changes, if possible.

For example, this process led to a new eProcurement system which Phoenix will launch in January. It was an idea generated by a group of finance department employees. The procurement process will soon be handled electronically from start to finish, saving the city money in the long-term, reducing error, improving efficiency and increasing competition.

finance values statementEmployees also developed the department’s new values statement that is visible on many signs placed throughout the department. Overall, staffing levels in the finance department have gone down from approximately 325 to 235 since 2009. Within the next five years, that number will be reduced to 200 as technology and position reclassifications take place through attrition.

More does not always mean better. Survey results show that the department’s customer service ratings are higher now than ever before and efficiency levels have increased.

Like many cities, Phoenix is on the rebound since the dark days of the recession. We have maintained our high credit ratings. We will soon surpass our 2015 innovation and efficiency savings goal of $100 million well ahead of schedule. Phoenix’s contingency fund is at the highest level in the city’s history. Our reductions in staffing levels have led to the smallest government in 40 years. It is making a difference. A recent survey indicates that more than 9 out of 10 residents, or 93 percent, say that Phoenix is a good place to live, the highest rating level in the history of the survey.

Will the pre-recession days of our city government structure and culture ever return? No, and they should not. We must continue to find ways to maximize our resources by being as efficient and creative as possible. We are a stronger city today because of the challenges we faced, the sacrifices that were made and the employees who were committed to the mission because they were part of it and believed in it.


Ed Zuercher was appointed as acting city manager effective October 17, 2013.  Mr. Zuercher acts as the Chief Operation Officer for the City of Phoenix and oversees the largest Council-manager form of government in the United States, with 14,500 city employees, including 7 employee unions and associations. Working with the Mayor and City Council, he is responsible for a city budget of $3.5 billion, including airport, water/wastewater, solid waste, convention center and hotel, transit system and general city services. Zuercher’s career with the city started as a management intern and grew to include management assistant, assistant to the city manager, public transit director, executive assistant to the city manager, mayor’s co-chief of staff, and assistant city manager. He received his Master of Public Administration from the University of Kansas and his B.A. English/secondary education from Goshen College in Indiana.  He can be reached at [email protected].

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One Response to Reinventing Phoenix’s Departments: Starting From Square One

  1. Pingback: Public workers and union push back against city salary cuts in budget debate | Downtown Devil

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