April 21, 1998

To:Strategic Policies and Priorities Committee

From:City Clerk

Subject:Amalgamation and Restructuring 1998 Funding Requirements

Recommendations:

The Budget Committee on April 20, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, that:

(1)the funds in the amount of $2,500,000.00 be approved for the cost of hiring external consultants to assist with amalgamation and restructuring on a one time only basis in 1998 and that such funding be allocated from the Employee Benefit Reserve Fund or other appropriate Reserve Fund;

(2)the Chief Administrative Officer report to the Budget Committee in four months' time with a full update and review on the expenditures and work to be provided; and

(3)the Chief Administrative Officer, in hiring the consultants, utilize as many existing staff as possible.

Background:

The Budget Committee on April 20, 1998, had before it a report (April 16, 1998) from the Executive Director of Human Resources and Amalgamation regarding 1998 funding requirements for amalgamation and restructuring.

City Clerk

Barbara Liddiard/rc/cp

Item No. 26

Attachment

c.Chief Financial Officer and Treasurer

Chief Administrative Officer

Executive Director, Human Resources and Amalgamation

(Report dated April 16, 1998, addressed to the Budget Committee from the Executive Director, Human Resources and Amalgamation

Purpose:

The purpose of this report is to describe the funding for external consulting requirements for amalgamation and restructuring for 1998.

Source of Funds:

The Chief Financial Officer has recommended funding this initiative from the Employee Benefit Reserve Fund.

Recommendations:

It is recommended that the cost of hiring external consultants to assist with amalgamation and restructuring be included in the request to the Province for transition funding.

Background:

At the April 3, 1998, Budget Committee meeting, the Committee had before it a report, A1998 Preliminary Transition Project Requests B Consolidated Listing,@ from the Chief Financial Officer and Treasurer. The report was deferred to the Budget Committee meeting of April 20, 1998, with the respect that staff report on the proposed transition projects.

Approach to Amalgamation and Restructuring:

The amalgamation and restructuring process is being undertaken in three phases. Phase 1 was the establishment of the six departments and the hiring of Commissioners. This phase is now complete. Phase 2 was divided into two parts. Phase 2A entailed designing the organizational structure of divisions within departments and the hiring of senior managers (e.g. executive directors, general managers) reporting directly to the Commissioner.

This phase is at various stages in the organization, with hiring near completion in some departments, while organizational design work is still occurring in other departments. Phase 2B involves the organizational design of units within Divisions and the appropriate management levels below Director. This phase will be complete by the end of May 1998. Phase 3 involves service rationalization including examining a full range of service delivery options. This phase will follow immediately upon completion of Phase 2B and will be complete by October 1998.

Council directed staff to obtain external consulting, to complement in-house knowledge and experience with areas of expertise not available within the Corporation. This approach is also useful for validation purposes.

There has been a two-stage process for the hiring of external consultants for corporate restructuring. The first stage was a Request for Expressions of Interest for pre-qualification of consultants. Fifty-five submissions were received and eighteen companies were qualified to compete for work through a Request for Proposals (RFP) process. The second stage was a Request for Proposals for projects submitted by departments. Sixteen of the pre-qualified companies qualified for twenty-eight projects. This week, interviews with these companies will take place and final decisions made on the successful firms. Decisions will be confirmed within the requirements of the Purchasing By-law.

An overall budget of $5,000,000 has been set for restructuring consulting assistance. Budget Committee approval is being sought for the phase that involves organizational design and restructuring. The estimate for this phase, based on the proposals received is $2,500,000. The funding approval for the next phase, service rationalization, will be sough later this year.

Contact Names:

Claire Tucker-Reid, 397-4149

Roda Contractor, 397-0459