An Assessment of Oakland City Council’s Mandate to Reorganize Human and Recreation Services

By Ana Reidy, BA Public Policy,  2012

In January 2012, City of Oakland employees were in a state of uncertainty and anxiety after learning that the California Redevelopment Agencies were to be dissolved, costing Oakland nearly $29 million. Up to that point, the City of Oakland used Redevelopment Agency funding to help support eleven city departments and 170 employees. In response to the dissolution, the City fired 50 employees and City Council mandated that the Department of Human Services (DHS) and the Office of Parks and Recreation (OPR) reorganize into a single Community Services Department. The City Administrator expressed that the City intended for the department reorganization to create operational efficiencies meant to enhance service delivery and save money.

The reorganization was originally set to begin in June 2012. However, as of September 2013, the departments remain independent and the City of Oakland has not released a formal reorganization plan, leaving employees wondering about the fate of their programs and their jobs. Although no details have been released about what the reorganization will entail, the 2013-2015 Budget confirms that the City will move forward with creating a new Community Services Department, which will house both DHS and OPR.[1]

This article is a summary of my assessment completed in May 2012 of the proposed reorganization’s effectiveness at enhancing service delivery, and recommends strategies that should lead to the best possible outcomes for both personnel and the public.  Given that no formal reorganization plan has been released, this assessment can help inform the City of Oakland as they determine how the new Community Services Department will function.  My assessment surveyed organizational change literature and analyzed four case studies of cities with department functions similar to what the new merged department would have. The case study cities were:

  • Sacramento, CA
  • San Jose, CA
  • Emeryville, CA
  • and Orlando, FL.

Anonymous survey data from 14 upper level staff, interviews with personnel, direct observations from my time as an intern for both DHS and OPR, and government documents were used as the basis to assess Oakland. DHS and OPR staff should be re-interviewed or surveyed to determine if their opinions and behaviors have changed since May 2012.

Factors of a Successful Reorganization

Department reorganization is often termed a “merger” or “administrative consolidation.” Department reorganization is the consolidation of several offices or agencies into a single office where “useless and obsolete offices and agencies are abolished, and related functions are grouped under the same departmental management.”[2] The predominant literature on organizational change cites quality of leadership, level of support, degree of effort, and complementary organizational structures to be the strongest indicators of a successful merger. At the time this assessment was completed (May 2012), Oakland lacked three of the four key indicators of a successful merger.

Quality of Leadership

Successful mergers have a strong, visible, and committed leader who takes charge of the change effort and sees it through to completion[3]. Leaders are most successful when they communicate realistic outcomes.[4] Leaders that merge to build their own personal empire or merge as a political move are generally unsuccessful.[5] The reorganization in Oakland does not have a strong, visible, and committed leader because it resulted from a City Council mandate. To date, a new director has still not been determined. At the time of my assessment, both current Directors were making strides to not overstep their bounds until an official director was placed. Both Directors had communicated realistic outcomes to their staff, expressing uncertainty of the effects of the reorganization and were looking for ways to make the best of the situation.

Level of Support

Organizational change literature suggests that successful mergers have strong, pervasive support for the reorganization. Opposition to reorganization is common and understandable among public officials whose agencies are threatened by proposed change.[6] At the time of my assessment, there was not strong support for this reorganization from staff from either department. Survey data from six OPR and eight DHS upper level staff, showed that only 36 percent are in favor of reorganizing. Of those in favor, only half believed it would lead to enhanced service delivery for their clients. Fear, uncertainty, irritation, and anger were expressed in interviews. The most common comments were not understanding the need for the reorganization, lack of direction from the City Administrator, and not agreeing that merging will lead to a meaningful cost-savings. But despite these feelings, almost all expressed a “let’s make the best of it” attitude.

Degree of Effort

Banal-Estanol and Seldeslachts explain in the report, “Merger Failures,” that if both departments exert effort in the merger, synergies can be realized resulting in greater odds of a successful merger.[7] But there can be a temptation to free-ride because it is difficult to track and measure effort. For Oakland, given the resistance cited above, there was a perception that the merger costs would be high. However, OPR and DHS were both driven by the needs of their community and had built relationships with the clients and communities they serve. Neither department would risk not putting in effort if it meant their clients would suffer.

Organizational Structure

When pre-merger units share complementary functions (similar philosophical underpinnings, similar processes for completing work, and a common knowledge base) the more successful the merger will be.[8] When these traits are lacking, post merger coordination problems are likely.[9] If the pre-merged departments lack common knowledge bases and common operating systems, keeping each department structurally separate is recommended.

Source: City of Oakland 

DHS Org ChartAt the time of my assessment, DHS and OPR lacked complementary functions and common knowledge bases. These departments approached improving quality of life for Oakland residents in different ways. OPR achieved this by providing opportunities for the community to engage in enriching activities, whereas DHS did so by providing tools for self-sufficiency and health. A second key distinction is that DHS offered very little direct service in comparison to OPR. DHS funds were often “pass-through,” meaning they would fund and monitor other public and non-profit agencies to deliver services. The third key distinction was that OPR received the majority of its funding from General Funds (58 percent) while DHS was primarily funded through grants and parcel taxes (92 percent). Thus, DHS was required to produce data-driven results to be accountable. These distinctions resulted in very different tasks, priorities, language, and culture.

The case study of Orlando, FL showed that when new leadership added data-driven, educational enrichment programs to a department that was similar to OPR, culture clash and change were something the department struggled with and they are still working on, even though the change took place 10 years ago in 2003.

This is significant for Oakland because its own merger lacked quality leadership, support for the reorganization, and complementary functions/knowledge bases. These deficiencies suggested that reorganizing DHS and OPR into a single department would not be successful. The City Administrator and City Council were advised to carefully consider whether reorganization was something they want to continue to pursue.

Recommendations for Oakland

Role of Future Leadership

If the City moves forward with the merger plan, the Council should name a new director immediately. This director must believe in this change and rally others to support the reorganization. To garner support the director needs to emphasize the need for the plan, articulate the plan clearly, and include staff in the decision making process[10]. The more seriously their recommendations are considered, the stronger the support will be for the reorganization. The retention of staff and keeping staff in similar lines of work will help to create support for the merger and morale high.[11] The new Director will need to be intentional about facilitating a cultural shift because OPR and DHS have different tools for accomplishing their goals, different knowledge bases, different priorities, and different procedures.

Streamlining Related Functions

Reorganization, by definition, entails grouping related functions together in order to have a more effective use of resources. Departments in the case studies were organized based off the populations they served or based off the goals of the program.

Senior Services

DHS Aging and Adult Services division’s programs and OPR’s senior classes and activities at recreation centers should be streamlined into a single division and be run through senior centers. All case study cities had senior centers where all older adult services were offered. If there are not enough senior centers to fill the need, a needs assessment should be done to assess which centers should be designed specifically for seniors.

Disability Services

OPR offers day camps, adaptive sports, and activities led by certified therapeutic recreation specialists for people with disabilities through the Inclusion Center. DHS, through the Aging and Adult Services division, offers care management, referrals, and transportation services to adults with disabilities. These programs could be strengthened if Disability Services became its own division. This would make it easier to assess if this population’s needs are being met and offer easier access to services.

Youth Services

Both DHS and OPR offer a variety of direct services offered specifically for youth that could be streamlined into a single Youth Services division. These services include the Summer Food Service Program, the Safe Walk to School Program, Youth Sports, the Discovery Center, and Camps. While OPR offers many other direct services for youth, these services are tied directly to a facility that offer services to the entire community, not just youth.

Administrative Services

Administrative Services from both OPR and DHS could be streamlined. The merging of these functions is where cost savings is usually observed through the elimination of unneeded personnel.  Staff members expressed concern about positions being cut from administrative functions, given that the City has been cutting these types of positions for several years. It is unclear how many positions can be eliminated from this merged division, given that their combined budget was over $85 million dollars.

Grant-Funding

The grant funding and management process should be streamlined amongst all divisions that currently give out grants or contract out services. Grant funders could save time and energy by having a uniform system in place that incorporates the best methods for grant funding. This would make it easier for prospective grantees to apply for grants without having to learn a new set of procedures each time they apply. By widening the potential pool of applicants, the City would be ensuring that the best agencies are selected to deliver services.

Direct Service through Recreation Centers

An interesting feature from the case studies is that almost all direct service was provided through recreation centers. DHS could strengthen the direct service they offer by running the Summer Food Service program, the Emergency Food Distribution program, and the Messenger4Change program through the recreation centers. The centralization of direct services in recreation centers would help fill programming, make it easy for program users to know where they can access services, and help to bring more community members to the centers. It is important to note that survey data indicated that the recreation centers are struggling with lack of staff to run programming and lack of funds to keep up with building maintenance. If all direct service is to be run through the recreation centers and senior centers, this issue will need to be addressed.

Office Parks and Recreation Org Chart

Adopting Each Other’s Systems and Procedures

Organizational change literature indicated that a potential benefit of reorganizations is adopting each others’ system and procedures. In the public sector, this can happen without merging. Staffers suggested that DHS could benefit by adopting revenue generation techniques from OPR. They also suggested that OPR could benefit by adopting DHS’ data tracking systems to assess which of their programs have the largest impact. This tracking could also help OPR receive more grants. It was also strongly emphasized that OPR could benefit from DHS management structure. Most of OPR’s management structure was eliminated due to budget cuts.

These recommendations were made in May 2012 to help inform the City of Oakland as they created a reorganization plan. Over a year later, DHS and OPR remain independent and their staffs have not learned anymore about the reorganization plan. The FY 2013-2015 budget indicates there will be a new Community Services Department, but both Human Services and Parks & Recreation have separate line items.[12] This may suggest that the City adopted the recommendation to keep the departments structurally separate in the new Community Services Department because of the differences in their organizational structure and culture and because most of OPR’s and DHS’ current programs could not be streamlined. As the City continues to work out the details of the reorganization, they should carefully evaluate the academic literature and case studies cited in this analysis to determine the best ways to reorganize services and the best ways to garner more support for the process.

 
blue ribbon
Ana Reidy graduated with honors from Mills College in May 2012. She studied Public Policy with an emphasis in Civic Leadership. She currently works for the Pacific and Asian Affairs Council (PAAC), an international education non-profit in Honolulu, HI. Ana is passionate about advocating for and creating effective policies that better serve marginalized communities. She hopes to continue her education and pursue this passion. 
 
 Sources
[1] City of Oakland. “Fiscal year 2013-15 Proposed Policy Budget.” http://www2.oaklandnet.com/oakca1/groups/cityadministrator/documents/report/oak040606.pdf (2013).
[2] Buck, A.E. “Administrative Consolidations in State Governments.” National Municipal Review (1919): 639-668.
[3] Greenhalgh, Trisha, Glenn Robert, Fraser Macfarlane, Paul Bate, and Olivia Kyriakidou. “Diffusions of Innovations in Service Organizations: Systematic Review and Recommendations.” Milbank Quarterly (2004): 581–629; Isett, Kimberley, Joseph Morrissey, and Sharon Topping. “Systems Ideologies and Street-Level Bureaucrats: Policy Change and Perceptions of Quality in a Behavioral Health Care System.” Public Administration Review (2006): 217–27; Kotter, John. “Leading Change: Why Transformation Efforts Fail.” Harvard Business Review (1995): 59–67.
[4] Banal-Estanol, Albert, Ines Macho-Stadler, and Jo Seldeslachts. “Endogenous Mergers and Endogenous Efficiency Gains: The Efficiency Defense Revisited.” International Journal of Industrial Organization (2008): 69–91.
[5] Banal-Estanol, Albert and Jo Seldeslachts. “Merger Failures.” Journal of Economics and Management Standpoint (2011): 589-624.
[6] Pfiffner, John and Vance Presthus. Public Administration. New York: The Ronald Press Company, 1935.
[7] Banal-Estanol, Albert and Jo Seldeslachts. “Merger Failures.” Journal of Economics and Management Standpoint (2011): 589-624.
[8] Isett, Kimberley, Joseph Morrissey, and Sharon Topping. “Systems Ideologies and Street-Level Bureaucrats: Policy Change and Perceptions of Quality in a Behavioral Health Care System.” Public Administration Review (2006): 217–27; Kelman, Steven. Unleashing Change: A Study of Organizational Renewal in Government. Washington, DC: Brookings Institution Press, 2005.
[9] Kogut, B. and U. Zander. “What firms do? Coordination, Identity, and Learning.” Organization Sciencce (1996): 502-518.
[10] Zald, Mayer, and Michael Berger. “Social Movements in Organizations: Coup d’Etat, Insurgency, and Mass Movements.” American Journal of Sociology (1978): 823–61; Kotter, John. “Leading Change: Why Transformation Efforts Fail.” Harvard Business Review (1995): 59–67.
[11] Thomas, James and R.L. Peterson. “City -county Health Department Mergers.” Public Health Reports (1962) 341-348.
[12] City of Oakland. “Fiscal year 2013-15 Proposed Policy Budget.” http://www2.oaklandnet.com/oakca1/groups/cityadministrator/documents/report/oak040606.pdf (2013).

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