Where is the Real Payroll Waste in the City Budget? Upper & Middle Management

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Readers,

We heard much last week in the media about Mayor Emmanual laying off 625 union workers on the lowest end of the pay scale (call center workers, custodians, CDOT laborers, etc).  This article, written by one of the best political journalists in the city, looks at where real payroll waste occurs - in the ranks of upper & middle management. The article appears in the "Chicago" section of the New York Times.   

July 23, 2011

The City Payroll May Include a Few Too Many Bosses

By DAN MIHALOPOULOS

In City Hall’s Department of Family and Support Services, the relatively small band of employees receive supervision from no less than one commissioner, 14 deputy commissioners, 4 assistant commissioners, 6 assistants to the commissioner and 17 others with the word “director” in their titles.
Budget consultants hired by city-employee unions calculate that the department has more than 200 employees in various supervisory roles and 334 “front line” workers, for a ratio of about 1.6 staff members per manager.

After weeks of remaining mostly quiet during a public relations barrage from Mayor Rahm Emanuel, labor leaders are preparing to respond with cost-saving alternatives to Mr. Emanuel’s decision to lay off as many as 625 city workers. Union officials will urge him to reduce the number of managers in Family and Support Services as well as other top-heavy departments instead of laying off their members, according to a section of the consultants’ draft report obtained last week by the Chicago News Cooperative.
“Fewer workers are actually doing the work and an excessive number of supervisors and managers are overseeing the work,” the consultants contend in the report. “We don’t need to be firing any more of the people actually doing the work — we need to get rid of the excessive number of people watching them do it.”

Leaders of the Chicago Federation of Labor, the umbrella union group that hired the budget consultants, declined to comment Friday. But the excerpt from the draft report indicates that a main thrust of the union’s counteroffensive will be a call for “eliminating unneeded midlevel management and political appointees.”
Mr. Emanuel has used similar rhetoric, although he has not made clear what he envisions as the future size of the city work force. During his campaign for mayor in February, he promised to “streamline the bureaucracy” of city government, partly by doing away with “unnecessary layers of management.” On May 17, the day after he took the oath of office, he announced plans to cut total salaries for “senior management” by 10 percent in every City Hall department, including his office.

“His responsibility is to protect the city’s taxpayers, not the city’s payroll,” a mayoral spokeswoman said Friday. “No part of that payroll is immune, including management.”

Labor activists, many City Council members and other budget watchdogs have long asserted that the administration of former Mayor Richard M. Daley, who retired this year, had too many bosses making too much money. While the total number of City Hall employees dropped during his 22 years in office, the ranks of officials with the fanciest job titles grew steadily for most of his tenure, city budget records show.
There was financing for the salaries of one commissioner, two deputy commissioners and one assistant commissioner in the Buildings Department in 1990, the first year that Mr. Daley proposed a budget. By 2008, the list of Buildings Department honchos with such titles had swelled from 4 to 14. Only the following year, after the recession began to dry up city revenue streams, did Mr. Daley move to eliminate some positions for high-level managers in the Buildings Department and other branches of his administration.
Labor officials and some elected leaders say Mr. Daley’s successor should cut much deeper.

“City government has bloat in its middle-management layers,” Alderman Brendan Reilly (42nd Ward), the vice chairman of the Council’s budget committee, said last week. “Correcting the management-employee ratio will be critical to getting our fiscal house in order.”

The Chicago Federation of Labor’s consultants, Public Works LLC of West Chester, Pa., did not conduct a comprehensive review of the structure of the entire 35,000-member city work force. But in their draft report they say that the Emanuel administration should closely examine the overall proportion of workers to managers, and they point to the organizational structure of three departments, including Family and Support Services, as examples of the problem.

The report notes that the payroll for the city’s Department of Information Technology includes 11 deputy chief information officers, as well as a chief and a managing deputy chief, among 103 full-time department employees. (In his mayoral run, Mr. Emanuel said he would consider folding that department into the city’s budget office.)

The consultants also found that 55 managers are included in the 477 filled positions in the General Services Department, about 7.6 workers for each administrator.
The consultants argue that such ratios are too low and that Chicago should follow the lead of other city and state governments across the country that have achieved great savings by reducing layers of management. A slight increase in the number of workers per manager could save the city tens of millions of dollars, the consultants say.

Similarly, the Civic Federation, a tax watchdog group financed by business leaders, recently analyzed the management structure in city government’s largest department, the police force.

“The Chicago Police Department has more layers of management at the top of the department than police departments of other major cities,” according to a Civic Federation report on the city’s budget released last month.

The authors of that report said the police force had two more layers of supervisors than the Los Angeles and Houston police and one layer more than the New York Police Department. Chicago has four classes of officialdom above the department’s seven deputy chiefs of patrol.

Many upper-echelon city officials command high salaries, including 41 managers who are paid at least $100,000 a year each in the Aviation Department, an agency that Laurence Msall, the Civic Federation president, also criticized for its many layers of bureaucracy.

But Alderman Reilly and Mr. Msall said thinning the flock of city bureaucrats was not a cure-all for a budget deficit that could reach $700 million next year. With 80 percent of city spending devoted to personnel costs and 90 percent of workers in unions, closing the shortfall will also require eliminating many lower-level jobs, according to Mr. Msall.
“They need to reduce at all levels, including management,” he said.

Mr. Emanuel’s most recent public statements have focused on workers represented by organized labor. He called on employee unions to agree to changes in contractually guaranteed work rules, like overtime policies, to help balance the budget. When labor leaders did not quickly agree to those proposals, the mayor carried out his threat to issue layoff notices and announced plans to outsource janitorial work at airports and libraries as well as the administration of employee benefits and the water-bill call center.
Union leaders said Mark Angelson, the deputy mayor, began a closed-door meeting with them Monday by saying, “There’s a new sheriff in town.”
While Mr. Emanuel has promised to scale back overall payroll spending on managers, some of his newly hired aides are being paid more than their predecessors in Mr. Daley’s administration, city records show. They include Matt Hynes, the chief lobbyist; Alexandra Holt, the budget director; Lois Scott, the chief financial officer; Transportation Commissioner Gabriel Klein; and Evelyn Diaz, the new head of Family and Support Services.

The new mayor will not lack for public relations aides to help him frame the debate with unions. Payroll records show that at least 45 management-level officials are engaged in promoting the mayor’s agenda in the news media. The payroll includes dozens of public relations officials in departments across City Hall in addition to the press secretary, deputy press secretary, five assistant press secretaries, two “press aides” and one photographer in the mayor’s press office.

dmihalopoulos@chicago
newscoop.org