Q2 2015
The Official Publication of AMCTO – The Municipal Experts
Municipal Management & Leadership
THE NEW CMO
Accrediting Municipal Management & Leadership
ALSO • Juggling Act – The Evolving Role of the Municipal Treasurer • Entrepreneurial Revenue Generation in Kitchener • Change Driving Organizational Design
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Q2 2015
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FEATURES New CMO 8 The The re-launch of Ontario’s most valuable municipal management and leadership designation
DEPARTMENTS MESSAGE 4 PRESIDENT’S Thanks to All of You I Lived
6 VIEWPOINT It’s a Matter of Ethics
Act – The 14 Juggling Evolving Role of the Municipal Treasurer Today’s municipal treasurer isn’t just a bean counter – they’re a financial strategist and business partner, too
Revenue 18 Entrepreneurial Generation in Kitchener One municipality embraces an entrepreneurial approach to revenue generation
Q2 2015
The Official Publication of AMCTO – The Municipal Experts
Municipal Management & Leadership
THE NEW CMO
Accrediting Municipal Management & Leadership
Driving 21 Change Organizational Design Study finds municipal organizational systems built around preparing for and coping with shifting priorities
ALSO • Juggling Act – The Evolving Role of the Municipal Treasurer • Entrepreneurial Revenue Generation in Kitchener • Change Driving Organizational Design
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CONTENTS
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MUNICIPAL MONITOR
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P R E S I D E N T ’ S M E SSAGE
Board of Directors Michelle Smibert, CMO President Municipality of Middlesex Centre Cahl Pominville, AMCT Immediate Past President Municipality of North Grenville Christopher Wray, AMCT Vice President / Director at Large Municipality of Wawa John Hannam, CMO Director at Large City of Thunder Bay Lois O’Neill-Jackson, CMO Director at Large Municipality of Trent Lakes Yvonne Robert, CMO, AMCT Director at Large Township of Elizabethtown-Kitley Michelle Casavecchia-Somers, CMO Zone 1 Board Director Township of Malahide Mark Gaynor, CMO Zone 2 Board Director Municipality of Brockton Angela Morgan, CMO Zone 3 Board Director City of Burlington Stephen Huycke Zone 4 Board Director Town of Aurora Candace Thwaites, CMO, AMCT Zone 5 Board Director Town of Gravenhurst Brenda Brunt, CMO Zone 6 Board Director Township of South Dundas Carol Trainor, AMCT Zone 7 Board Director Township of St. Joseph Stephane Palmateer, AMCT Zone 8 Board Director City of Timmins Marcella Vallelunga Zone 9 Board Director City of Thunder Bay
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Thanks to All of You
I Lived E very time I listen to the song I Lived by OneRepublic, it brings to life all of the wonderful opportunities that I have had and all of the awesome people in our great association that I have worked with over the last year. The first part of the song says “Hope when you take that jump, you don’t feel the fall.” To be honest, when I started my responsibilities as president, I felt that I was taking a bit of a jump into the unknown. I was attending zone meetings outside of my zone, being the guest at conferences with other associations, spending time away from the office, travelling to parts of the province that I didn’t know existed. Because of the great support of the staff at the AMCTO office and fellow board members, zone executive members and the great members of our association, I felt that the fall was cushioned, if not averted altogether. I survived without any scrapes or bruises and I attribute that to all of you.
By Michelle Smibert, CMO AMCTO President
Later on in the song, you can find the following lyrics: “I owned every second that this world could give, I saw so many places, the things that I did.” Kapuskasing, Malahide, Adjala Tosorontio, North Grenville, Thunder Bay, Tokyo and Amagasaki City, Japan are just a few of those wonderful places travelled by bus, train, planes (both big and not so big) and automobiles. And the things that I did were absolutely amazing – playing euchre “Northern” style, eating interesting things with interesting utensils, getting to know people and customs and understanding the unique opportunities and challenges of each zone. So, my question to you is, “Do you want to live, like really live?” If your answer is yes, then please give some consideration in getting involved at any level of our awesome association. AMCTO has so many great people – you need to meet every single one of them.
PRESID ENT’S ME SSAGE
“Because of the great support of the staff at the AMCTO office and fellow board members, zone executive members and the great members of our association, I felt that the fall was cushioned, if not averted altogether. I survived without any scrapes or bruises and I attribute that to all of you.”
Angela Morgan – Zone 3
Stephen Huycke – Zone 4
My relationship with AMCTO began after I graduated from university and was a municipal intern in the former City of Etobicoke. It was there that I was encouraged to enrol in the Municipal Administration Program (MAP). I secured a full-time position in the clerk’s department in the City of Burlington. Being nominated as the Zone 3 representative was one of the most valuable experiences of my career. I made some wonderful friends who were mentors to me through my career. I returned to AMCTO when I became the Manager of Licensing and Enforcement in Burlington and once again, AMCTO was invaluable to my success in this position. The licensing and enforcement project team got me up to speed on the technical requirements. I had no experience in that area and had to quickly familiarize myself with the technical aspects involved in that field. I have now come full circle and I’m back in the clerk’s department. I hope to be able to share my knowledge and expertise to help others starting out in the career.
I began working in municipal government about five years ago for the Town of Markham. Joining Markham was a significant career change for me having spent most of my post-university career working in the management and protection of intellectual property. During my first year in Markham, I was exposed to a lot of new and challenging areas of responsibilities (elections, access and privacy, etc.) that I had never worked in before. I was encouraged to join AMCTO within weeks of starting work and quickly learned what a great resource the association is for municipal professionals. A little over a year ago I became Aurora’s Town Clerk. In addition to the great mentors I had at Markham, I believe that my active participation in AMCTO, whether at the zone level and as a member of the Legislative & Policy Committee, or on the Board of Directors, helped prepare me for the increased responsibility. I see my participation in Zone 4, the Legislative & Policy Committee and
Board of Directors as a small way to give back to an association that has been an important part of my career development.
John Hannam – Director at Large My involvement with AMCTO was simultaneous with my starting with the City of Thunder Bay, the MAP being a requirement of my being hired as the Assistant City Clerk. That was soon followed by my first zone meeting and in 2001, joining AMCTO’s Legislative Committee, a group that I would spend many years with and was invaluable in growing my knowledge and understanding of municipal legislation, how it was applied and affected the work of municipal professionals in Ontario. Learning my craft has been much influenced by the interaction with AMCTO members in Zone 9, on committees, at conferences and workshops and the Board of Directors. I am a municipal professional because of AMCTO.
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Meet your Board Members
V I E WP O I N T
AMCTO Staff Andy Koopmans, CPA, CMA, CMO Executive Director Craig Wellington Director, Programs & Services Rick Johal Director, Member & Sector Relations
It’s a Matter of Ethics
Nadeem Dean, CPA, CMA Manager, Finance & Administration Anubha Meta, Ph.D. Manager, Education & PD Program Development Brenda Armstrong Johnston Specialist, Membership Services Michelle Sampson Executive Assistant Kathleen Barrett Coordinator, Communications & Marketing Lynda Staples Project Manager, Municipal Accessibility Debra Bellamy Coordinator, Accreditation & Coordinator, Municipal Accessibility Jeanne Moon Coordinator, Programs & Services Rosita Bourke Coordinator, Programs & Services Manjit Badh Coordinator, Programs & Services Eric Muller Coordinator, Legislative Services
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By Andy Koopmans, CPA, CMA, CMO Executive Director, AMCTO
O
ver the years I suspect that we’ve all read or heard the stories of municipal professionals caught up in questionable (and sometimes illegal) situations. While these situations have sometimes resulted in terminations or even criminal charges, in my mind the greater problem is the fact that such instances are often used as a generalized example of how the municipal profession functions. Although I certainly don’t believe that such a generalization is even remotely true, I do have to wonder how, as municipal professionals, people can find themselves in such situations in the first place. I think the answer to the question is, in part, the fact that the environment in which you are operating has changed dramatically over the years. As was noted in a recent staff report to the AMCTO Board of Directors, “[t]he world of municipal government is increasingly complex in part due to a growing list of rules, regulations and procedures. The environment
is subject to intense media scrutiny, which is leading to an escalation of public scandals – which may appear political in nature but often has a direct impact on the integrity and perception of professionalism amongst municipal staff. Couple this with the increasing financial and political pressures that weigh on senior administrators and it becomes important that AMCTO provide straightforward and effective guidance to assist municipal professionals in the execution of their duties.” So what do you need to do? First and foremost, I believe (as do many others) that the best guidance must come from your own internal moral compass, which should help you in determining an appropriate course of action to follow when faced with the “grey areas” that are an accepted part of working in a professional, political and public environment. Using this internal compass, you must assess your possible courses of action and determine which one ensures that
VIEW P OI N T
“Using this internal compass, you must assess your possible courses of action and determine which one ensures that you are not compromising not only your personal ethics but also the professional
you are not compromising not only your personal ethics but also the professional ethics that are central to being a trusted municipal official. To start, it is important to first recognize and accept a set of ethical tenets that establish the parameters against which you can assess the issues that you are facing. These ethical tenets, which a dictionary would define as “rules of behaviour based on ideas of what is morally good and bad” are a necessary element of good municipal governance and administration because, as noted by
Potter Stewart, a former Associate Justice with the U.S. Supreme Court, “Ethics is knowing the difference between what you have a right to do and what is right to do.” Not only do ethical tenets provide guidelines for municipal professionals, they are also critical in maintaining public trust in local government. As an organization focused on addressing the management and leadership needs of both new and experienced professionals working across the municipal sector, the matter of professional ethics is
critically important to AMCTO and its members. As municipal professionals you, our members, are employed in positions of trust. For this reason, we have proposed the adoption of a code of ethics and values to assist you in maintaining the level of trust and respect that you rightfully deserve. We hope that all of you will embrace the overall purpose of this code, which is to remind you of your responsibilities to your community, your elected officials and your colleagues in the municipal profession. MUNICIPAL MONITOR
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ethics that are central to being a trusted municipal official.”
The New CMO
RAWPIXEL/SHUTTERSTOCK
“ The newly refocused mandate on management and leadership, with the relevant knowledge and skill competency framework, and refined application process, will ensure the success of the CMO designation for years to come.”
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The re-launch of Ontario’s premiere municipal management and leadership designation
THE NEW CMO
By Garth Johns
A
MCTO recently announced its plan to re-launch the Certified Municipal Officer (CMO) accreditation in June 2015 as a management-and-leadership-focused designation for municipal professionals. The new CMO will be Ontario’s only municipal management designation that maps onto and accredits the specific professional skills and knowledge required to be a successful local government manager, regardless of operational area.
Why should we care about the new CMO? There has been a great deal of confusion over the past few years regarding the many municipal professional designations available in Ontario. What is the perceived value of each in the sector? Which one will best help to advance my career? One of the professional designations in question is the CMO. AMCTO’s current CMO program has been in place since 1998, and of AMCTO’s roughly 2,200 members, 300 have attained the CMO. That’s a reasonably healthy percentage for a designation that’s not a mandatory requirement for membership. But you would expect more uptake for an accreditation that has been with us since 1998, especially one that is consistently recognized as the most highly regarded municipal professional designation in Ontario. In addition, consider that there are approximately 300,000 municipal professionals working in Ontario, and, using a factor of 10 per cent, approximately 30,000 are tasked with management responsibility. That is the total potential market for the CMO.
Why aren’t more municipal managers clambering to become certified? At the 2014 AMCTO Conference, President Michelle Smibert, CMO, MUNICIPAL MONITOR
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T H E N E W CM O articulated the association’s newly refined focus on municipal management and leadership support, issuing a challenge to her fellow members: “It is incumbent on all of us to be great leaders and managers within our organizations – whether you are a formal or informal leader.” But we must understand that leadership is not a birthright. It does not come because of our title or by virtue of the number of letters we can put behind our name. Leadership is instead demonstrated by our actions and behaviours and by how we inspire others. Regardless of our position in the organization, be it director of finance, CAO, municipal clerk, planner, IT or HR manager, we have an obligation to be professional. That equates to, amongst other things, enjoying what we do, doing it with excellence and always seeking to improve. But that is not all. Professionals always maintain a customer or client focus. We also must be ethical, great communicators and practice good emotional intelligence. We know our jobs demand results, but we also never forget the importance of forging relationships within the organization and outside. We can never forget the necessity of helping others to grow and develop, but we must also recognize the need for developing ourselves. We need to continuously and intentionally learn and grow. One way to unequivocally demonstrate our professionalism is by achieving a respected designation in our chosen industry. For those of us in the municipal field, there is no designation as highly regarded as the CMO. Achieving the designation is a way of demonstrating competence, professionalism and leadership to your municipality and community. In 2013, to ensure the CMO’s continued relevance to the needs of the sector, the AMCTO Board of Directors requested a comprehensive review
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of the CMO program. To ascertain the perceptions of the CMO and other accreditations in the sector, as well as the actual needs of the sector, AMCTO commissioned an independent research study, conducted by Dr. Zachary Spicer of the Institute on Finance and Municipal Government, Munk Centre, University of Toronto and Dr. Andrew Sancton, Professor of Political Science at Western University. The research study involved surveys, focus groups and interviews with members and Board members of Ontario municipal professional associations, including AMCTO, the Ontario Municipal Human Resources Association (OMHRA), the Municipal Finance Officers’ Association (MFOA), the Ontario Municipal Administrators’ Association (OMAA), the Ontario Municipal Social Services Association (OMSSA) and the Ontario Municipal Tax and Revenue Association (OMTRA). The researchers found respondents generally viewed gaining a professional designation quite favourably and agreed that being accredited can help career advancement. When asked what are the key elements in a successful accreditation system, there was general agreement that a valued accreditation should include a requirement for continued education; a minimum number of years of experience; endorsement by an objective body; and adherence to a code of ethics. Specific questions were asked regarding the recognition and value perception of each of Ontario’s municipal professional designations. The research clearly outlined that while there is a need for better clarity regarding the value and purpose of the CMO, respondents overwhelmingly affirmed that it is the most recognized and valued municipal professional designation in Ontario. The report further identified that there is a gap in the sector for a credible, specifically
focused municipal management and leadership designation. The research also gathered specific feedback regarding the mandate and value perception of the CMO, as well as its accreditation process. There were perceived to be operational issues that needed to be addressed with the application process and also strategic questions about where we needed to go with the program in order to better serve the sector’s needs. The lack of clarity on what is the mandate of the CMO, and whether it is a generalist professional designation or specifically management focused was cited. While a few respondents identified the more rigorous standard of the CMO as compared to other municipal accreditations, as a factor that might discourage its pursuit, significantly more respondents praised the CMO’s rigorous standard as what makes it so prestigious and valued in the sector. With research results in hand, AMCTO assembled an Accreditation Review Task Force comprised of accreditation experts, and managers from various municipal operation areas, many holding multiple technical, specific designations. Membership of the Task Force included: • Garth Johns, CMO (Chair) Business Consultant, Author • Raymond D. Callery, BA, CMO, CMMIII - HR (Vice-Chair), CAO, Greater Napanee • Edward DeSousa, CGA, AMCT, Director of Corporate Services & Treasurer, Halton Hills • Michael Wildman, MCIP, RPP, CET, CMO, CAO, Arnprior • Stephen Pellegrini, CMO, PMP, Supervisor, Business Systems, Brampton, and Mayor, King Township • John Daly, CMO, Director of Corporate Services/Clerk, Springwater • Paul Shipway, CMO, CAO, Bayham
THE NEW CMO
AMCTO staff Debra Bellamy and Craig Wellington ably supported the group. Rick Johal and Andy Koopmans also provided valuable context as needed. This Task Force is to be commended for their hard work, good discussion and contribution to the advancement of this cause. The Task Force reviewed the accreditation research report, as well as a range of local, national and international resources including management competency models from Ontario and Canadian municipalities, and the Ontario Public Service, to develop a Competency Framework for Municipal Management, which identifies the core leadership and management competencies required to be a successful local government manager. This framework was used as a guiding document to identify the core competencies of the new management focused CMO. The Task Force wrestled with a number of key issues. Firstly, the question of “who is a CMO?” The designation purports to guarantee that the holder has attained the highest standards in municipal experience and expertise. However, is it intended to reflect management/leadership excellence, or is it
a measure of general municipal competence? It was recognized that while there are myriad technical municipal designations, there was no specifically focused credible municipal management designation. This was a gap that AMCTO, with its newly focused mandate on Management and Leadership support, was uniquely positioned to address. Second, if we focused solely on municipal management accreditation, there was a concern that we may exclude members who lack management responsibility, but are desirous of attaining a designation that reflects and respects the level of knowledge and expertise they have achieved. The Task Force proposed that a tiered approach may address both elements. Third, we heard, and personally experienced, that the application process is a bit confusing with many pieces to the puzzle. We needed to streamline the application and reapplication process without decreasing its rigour. A designation that demands hard work is far more meaningful to its holder than one that does not. We needed to find a balance. Fourth, we felt there were two types of critical linkage we needed to explore. On one hand, members needed to enjoy credit for legitimate education or qualifications already attained (such as a CPA) while, on the other hand, we felt the time is right to reinitiate dialogue with other municipal organizations to explore linkages. There is greater strength in numbers and more legitimacy to the CMO if it has global support. Finally, there was recognition that while there exist technical designations for a range of municipal operation areas, there was a gap in the sector for a professional accreditation for municipal Clerks. Summarized below is the essence of the recommendations made by the Task Force, which the board has reviewed and adopted:
CMO mandate The Task Force recommended that the mandate of the CMO be changed to be a management and leadership focused designation with a minimum eligibility requirement of three years of municipal management experience. The new CMO program will certify the core skills, knowledge and expertise required to be a successful municipal manager. The CMO will remain a competence-based designation, requiring applicants to prove skills and knowledge within the following eight competency categories: • Municipal Operations • Communications • Service Delivery • Government Relations/Citizen Engagement • Strategic/Organizational Management • Human Resources Management • Financial Management • Leadership This refined focus for the CMO addresses the gap in the marketplace for a municipal management specific designation and alleviates any confusion about what is a CMO.
Ongoing maintenance A requirement for ongoing maintenance is essential for all valued professional accreditations. The new CMO will transition to a Professional Development Units (PDU) based means of maintaining the designation rather than having to recertify every five years. We recommended a two-year cycle for maintenance of the designation without the need to automatically submit any documentation. Rather, as professionals and consistent with current best practices, it becomes incumbent upon the holder of a designation to maintain their competency by engaging in various means of attaining PDU credits, keeping track of those credits and being able to respond, as necessary, to
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• Ben Puzanov, MCIP, RPP, Senior Planner, Middlesex • Nancy Wright-Laking, CMO, City Clerk, City of Sarnia • Manon Levesque, CMO Deputy City Clerk/Sous greffiere municipale, Clerk’s Department/Departement du secretariat, Cornwall • Susan Jones, CMO, General Manager, Emergency & Protective Services, City of Ottawa • Sharon Vokes, CMO, Clerk/Director of Council Services, Grey County • Candace Thwaites, CMO (AMCTO Board Representative)Project Manager/Deputy Clerk, Gravenhurst • Regan Legassie, CTDP -LieutenantColonel, Chief of Staff, Naval Personnel & Training Group, Govt. of Canada
T H E N E W CM O random audits as they may occur. We have also encouraged the exploration of linkages with recognized education programs that would qualify members for competency credits where reasonable to do so.
Tiered designation It was important throughout our discussions that we consider the needs of municipal professionals who lack supervisory responsibility. As a result, we recommended that a tiered approach to AMCTO accreditation be implemented. While the CMO would address the management and leadership competencies, another level (with a name to be presented to the AMCTO membership for ratification at the 2015 Annual General Meeting) should be established. Using the new CMO Competency Framework as a guide to ensure consistency, the competencies to be demonstrated for this second-tier designation will include: • Municipal Operations • Communications, Service Delivery • Government Relations/Citizen Engagement • Managing Work Like the CMO, this second-tier designation will be competency based and will require proof of competency through evidence and examples.
Consulting Services Include: • Municipal/Education Development Charge Policy and Cost Sharing • Water/Sewer Rate Setting/Water Financial Plans • Building Permit/Planning and Development Fees • Long Range Financial Planning for School Boards and Municipalities • Asset Management/PSAB Compliance • Fiscal and Economic Impact, Service Feasibility and Needs Assessment • Growth Management Strategies/Employment Strategies • Land Needs Studies, Demographics and Fiscal/Economic Impact Analysis
Tel: (905) 272-3600 e-mail: info@watson-econ.ca website: www.watson-econ.ca
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“It is incumbent on all of us to be great leaders and managers within our organizations – whether you are a formal or informal leader.” – Michelle Smibert, CMO, President, AMCTO Application process and program Through consultation, we heard from the membership that the current application process is viewed as unwieldy. Therefore, we established systems that aim to make the application for both levels of AMCTO accreditation not necessarily easier, but more comfortable and intuitive. We also recommended the establishment of an advisory group to oversee the program to ensure the board is more distanced from program oversight. The advisory board would also oversee periodic reviews of the program to recommend program refinements to the board.
Linkages to other designations There is value in working with other municipally based organizations to explore linkages of the CMO with other technical specific municipal designations. The Task Force has encouraged AMCTO to reach out to prominent organizations such as OMHRA, OMMI, MFOA, OPPI, OMSSA, OMAA, etc., with whom it already has established relationships. There is value and strength to be gained by working in concert with some of these organizations as we may be able to leverage our respective strengths for the benefit of not only our membership but also for the municipal sector generally. While it was not part of our official mandate, the task force members believe there is need to pursue a designation specifically intended for municipal clerks. AMCTO staff, at the direction of the board, are exploring this recommendation. While we are excited about the possibilities that come with this program review, we also appreciate that there are
challenges to be faced as we transition to the new structure. That transition plan has been shared with the membership with every attempt made to ensure that nobody currently going through their application or reapplication is adversely affected. When all is said and done, we do and should care about the CMO. The newly refocused mandate on management and leadership, with the relevant knowledge and skill competency framework, and refined application process, will ensure the success of the CMO designation for years to come. This is just a first step in an ongoing process of continuous improvement and refinement to meet the constantly evolving needs of the sector. We must continue to work to establish and maintain a system of accreditation of which we can all be proud. Going back to President Michelle Smibert’s inaugural address, she also confidently asserted that: “AMCTO is the ‘go-to’ organization for municipal leadership and management development and will support you in every way.” With the launch of the new CMO accreditation, AMCTO takes its support for municipal management and leadership to a new plateau. We can proudly claim that the CMO designation is the only professional designation in Ontario’s municipal sector that specifically certifies the skill and knowledge requirements for being a successful local government manager. This is extremely important to AMCTO and its members and will be hugely beneficial to the entire municipal profession. Garth Johns chaired AMCTO’s Accreditation Task Force.
CA LL FO R SUB M IS S IONS Share your story and contribute to the Municipal Monitor AMCTO is inviting submissions of original, unpublished articles for publication in future editions of the Municipal Monitor. AMCTO’s mandate is to promote excellence in municipal management and administration. We are looking for thought-provoking articles featuring innovative ideas and practical solutions that advance the knowledge and management capacity of Ontario’s municipal sector. Themes we would like to see covered include: • Strategic leadership • Staff and operational management • The staff/council dynamic • Public engagement • Sustainability • Infrastructure • Financial management • Performance management • Public-private partnerships • Service delivery If your municipality has developed an innovative initiative that has resulted in significant improvements in organizational processes or service delivery, and is replicable in other jurisdictions, please let us know so we can share your story. For more information or to submit an article outline, please email cwellington@amcto.com.
www.amcto.com
Juggling Act – The Evolving Role of the Municipal Treasurer Today’s municipal treasurer isn’t just a bean counter – they’re a financial strategist and business partner, too
ALPHASPIRIT/SHUTTERSTOCK
By Lisa Gordon
“ Municipalities face financial challenges and requirements that mean that treasurers are doing a lot more. In some cases, this involves new skills, including strong communications skills, so treasurers can help council understand the financial implications of what they do or don’t do.” – Dan Cowin, Executive Director, Municipal Finance Officers’ Association of Ontario
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TODAY ’S MUNICIPAL TREASURE R
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n Jan. 1, 2009, Ontario municipalities were required to adopt Public Sector Accounting Board (PSAB) reporting requirements for evaluating their tangible capital assets (TCAs) and amortizing the future cost of sustaining those assets and related services. Examples of municipal TCAs include parks, transit networks, roads, public buildings, and
water/wastewater facilities. The accounting change was implemented to provide greater transparency at the municipal government level and to bring third-tier government financial reports in line with federal and provincial reporting practices. It was also the catalyst that sparked the evolution of several roles in municipal government, especially that of the treasurer.
“Things have changed so significantly in the municipal sector,” says Tammy Wolters, CEO of WSCS Consulting Inc., in Perth, Ont. “The old-school version of the treasurer is the person who concentrated on collecting taxes; who made sure invoices got out and were paid – a financial services kind of role.” Wolters, who consults on asset management and business
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TO DAY ’ S MU N IC IPAL TR EAS U R ER transformation, is a former treasurer for the County of Lanark who also has experience at the federal and provincial levels of government. When she took on the role in Lanark, her aim was to change the traditional perception of the treasurer to that of a business partner, as opposed to a controller. “I believe that councils in the municipal sector are very much like a board of directors,” she explains. “They need to have more comprehensive advice from treasurers, among others, to be able to make long-term, higher level decisions. With municipalities, over the last 10 years or so, that longer-term view is starting to emerge with the issues around infrastructure deficits. I would argue that the treasurer’s role is now that of a
strategic adviser who focuses on the long term and they need support on the operational side to do so.”
Skills gap In the past, municipal treasurers were able to advance through the ranks without much formal training, learning on the job as they went along. But in 2009, the adoption of the PSAB requirements radically changed the competencies required in the municipal treasurer role. “That piece alone [PSAB accounting] was beyond the skill sets of many treasurers in place at the time,” says Wolters. “Now, the requirements around financial reporting require very different competencies and there’s a skills gap there.”
“ I would argue that the treasurer’s role is now that of a strategic adviser who focuses on the long term and they need support on the operational side to do so.”
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– Tammy Wolters, CEO, WSCS Consulting Inc.
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Today’s treasurers, she adds, need to focus not just on beans, but on business as well. The role has evolved into that of a financial strategist and business partner to council and other departments, but that’s not to say traditional skills are no longer required. Dan Cowin, executive director of the Municipal Finance Officers’ Association of Ontario (MFOA), agrees that treasurers now need a broader skill set. “Municipalities face financial challenges and requirements that mean that treasurers are doing a lot more,” he explains. “In some cases, this involves new skills, including strong communications skills, so treasurers can help council understand the financial implications of what they do or don’t do. In addition to
TODAY ’S MUNICIPAL TREASURE R communications, of course, today’s treasurer needs business and project management skills. Also, people need to understand the full cost of a public service – the full life-cycle cost.” Cowin added that assessing current municipal assets is a big job, but it is not enough. With many of Ontario’s 444 municipalities experiencing tremendous growth, treasurers must also have a hand in planning for the people who will be coming. As well, municipalities have forged into new territory in recent years, including public-private partnerships, administration of for-profit businesses and a focus on anticipating long-term future costs and revenue streams – all far beyond the traditional role of the treasurer and necessitating
cooperation with other local government departments. “Accounting, business, project management, all of that…there’s no way the treasurer is in a position to do an asset management plan alone,” Cowin says emphatically. “The treasurer doesn’t know when pipes will need to be replaced or the best engineering solution to an asset rehabilitation problem. So, it’s an inter-departmental undertaking that has a strong financial component. Because of that, leadership is also a very important required skill.”
Slow transition Wolters admits it’s taking longer than she expected for treasurers to move into a more strategic role in municipal government. “They still have to do their dayto-day jobs and they need time and access to the right training,” she notes. The reality that there aren’t any schools specifically for treasurers doesn’t help the situation, although some associations – including the Association of Municipal Managers, Clerks and Treasurers of Ontario (AMCTO) and MFOA – do offer training courses. As vacancies come open, municipalities are searching out the best candidates to fill the treasurer’s shoes, but those qualifications don’t come cheap. For some tiny municipalities, the salary for an experienced treasurer is simply not in the budget. “There really does seem to be a bit of a barrier to paying the kinds of salaries necessary to get qualified staff,” says Cowin. “We’re exploring some solutions. Some [treasurers] are farming themselves out on a part-time basis to more than one municipality, for example.” Another challenge, he adds, is that some councils still don’t see the need for change. “People are not necessarily convinced yet that treasurers need these skills. But, where skills enhancement has occurred, those councils can see the difference. They are seeing reports in front of them that they’ve never seen before, including new analyses
of important issues. I think they really appreciate that they have more horsepower in their finance and treasury department,” says Cowin. At the end of the day, concludes Wolters, municipal government is by far the most diverse level of government. “There are so many services offered. Public works is not like recreation, or long-term care, or anything else. But as a treasurer, you must know about all of it,” she says. The complexity of the treasurer’s role demands that the skills gap between “old school” ways and the current demands of the day be closed. “We have to change. We can’t continue to operate this way anymore,” says Wolters. “I’d like to see senior municipal managers look at where they need to go and have a vision that will drive some of this change. The treasurer needs to be at the council table as a financial strategist and business partner, no matter what.” Audit • Tax • Advisory
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Entrepreneurial Revenue Generation
in Kitchener
One municipality embraces an entrepreneurial approach to revenue generation By Sarah B. Hood
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rom the rising cost of policing to the need to maintain aging roads and bridges, most municipal budgets are stretched as far as they can go – and there’s a limit to the increases that taxpayers can reasonably be expected to absorb. Tried-and-true revenue generators, like parking and licensing fees, can only take up so much of the slack. Recently, the City of Kitchener has turned to a new revenue stream that’s already being tapped by U.S. municipalities, but is still little used in Ontario. Ryan Hagey, Kitchener’s Director of Financial Planning, made a joint presentation about municipal entrepreneurism with Stephanie Potter, Principal of SP Consulting and the Whetstone Group, at the 2014 AMCTO Finance Forum last November to describe Kitchener’s approach to exploring new kinds of corporate partnerships. So far, this has already included innovative partnerships between local businesses and municipal buildings like the Kitchener Memorial Auditorium Complex (known as “The Aud”). Removable floor decals in public areas now point the way to the nearest Boston Pizza or Subway restaurant.
A Boston Pizza floor decal in the Grand River Arena points spectators to a nearby location
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Toyota, which is also is a House League Platinum Sponsor for Kitchener Minor Hockey, found value in setting up a test-drive location outside the Activa Sportsplex. One sponsorship by Libro Credit Union consisted of temporary sign columns that didn’t even feature a logo: just an intriguing slogan and a QR code that could be accessed with a smartphone. The goal is to “create revenue that does not have to come from the tax base,” but he cautions that this approach is unlikely to replace traditional revenue streams. In Kitchener’s case, he says, “it would probably amount to less than one per cent of our total tax revenue per year.” Of course, it could vary considerably, depending on what a given municipality is ready to do. Municipal entrepreneurism can take many forms, some of which are already being tapped in some municipalities, like advertising on municipal buildings or vehicles, sponsorship of events and naming rights to high-profile properties like sports centres, transit hubs or performing arts venues. Or it could consist of a mutually beneficial
MUNICIPAL MARKE T I N G contractual agreement, such as an arrangement that only one brand of alcohol or soft drink will be sold in a particular municipal venue. “I would say we’re behind America generally, because it is a bit of corporate creep into municipalities and who knows how comfortable we are with that?” says Hagey. “It’s generally not a norm yet, whereas down in the States it’s becoming a little more normal.” Lest Ontarians recoil in horror as they imagine children’s playgrounds plastered with endorsements of sugary snacks, Hagey points out that some types of corporate sponsorship are already taken for granted, from littleleague uniforms carrying the name of a neighbourhood hardware store to sidewalk benches paid for by a local real estate agent or advertising on the boards at the community hockey rink. “I grew up in a small town and we were the Legion team, because the Legion ponied up the money to buy our uniforms,” he says. “People are already okay with advertising on buses; I don’t think it’s a huge leap to put it on snow ploughs. You see ads on the rink boards when little Billy is playing hockey – why not when he’s at the swimming pool?”
Before starting to envision specific sponsorship situations, Hagey says, municipalities should go through “a bit of a needs assessment” to determine what the community is ready for. He breaks this stage down into five specific questions to answer. 1. Are your council and community on board? 2. Do you already have a policy covering this area? 3. Should you approach municipal entrepreneurism comprehensively, or simply open the door to consider opportunities as they arise? 4. Will advertising and sponsorship opportunities be sought out and negotiated by city staff or an outside firm? 5. Where will the potential revenue be spent? Breaking down these questions, a municipality’s responses and their importance is key to the future success of a municipal marketing plan, according to Hagey.
Council and community support When the City of Kitchener carried out a community survey, 84 per cent of respondents “somewhat” or “strongly” supported generating revenues through sponsorship, which
“ People are already okay with advertising on buses; I don’t think it’s a huge leap to put it on snow ploughs. You see ads on the rink boards when little Billy is playing hockey – why not when he’s at the swimming pool?” – Ryan Hagey, Director of Financial Planning, City of Kitchener
Many popular restaurants have purchased floor decals in local venues like the Don McLaren Arena under Kitchener’s new marketing initiative MUNICIPAL MONITOR
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MU N I CI PA L M AR KE TIN G
Kitchener’s revenue generation strategy includes selling naming rights to facilities like Gibson’s Finest Club Lounge & Restaurant in The Aud
Libro Credit Union’s display at The Aud this spring consisted of temporary sign columns that didn’t even feature a logo: just an intriguing slogan and a QR code that could be accessed with a smartphone
helped the city define a slate of options deemed appropriate, including advertising in city publications and on arena boards, alcohol and soft drink “pouring rights” and naming rights for some facilities.
Comprehensive or case-by-case?
Policy considerations The City of Kitchener did not previously have an advertising or sponsorship policy, but staff have now developed one and presented it to council. An existing policy used to dictate that none of the city’s websites or vehicles could carry advertising; this rule was changed. Kitchener has even discussed such creative approaches as allowing paid advertising on the back of official documents like building permits. When a policy is being drafted, the municipality “needs to find balance between financial and social benefits,” Hagey says. “Do you sell naming rights to heritage designated buildings? Do you put logos on synthetic turf sports fields?” Kitchener’s new policy clearly defines ideas that would not be allowed; controversial, politically sensitive or potentially hazardous brands are off the list, Hagey says. “That’s where the policy piece comes in. We don’t want to have porn. If you’re trying to promote a healthy lifestyle, you might not want to promote a lot of [ fast-food restaurants]. It all boils down to what you are okay with.”
Rather than proceed case by case without any set plan, Kitchener has adopted a comprehensive approach that will apply consistent policies to all marketing outreach activities, which will be centrally coordinated. This is more time-consuming to set up, but allows for better consistency across multiple locations and divisions, Hagey points out.
Who does the selling? Although some municipalities might be equipped to set up an in-house sponsorship initiative, Kitchener is putting the function out to tender; it will be up to bidders to calculate and commit to a certain level of potential revenue. “It would be a time-limited venture,” he says.
Revenue allocation The final consideration, he says, is “what happens to generated funds?” Will they be applied to reduce tax rates or will they allow for an investment in infrastructure? “What budget do funds get applied to?” Hagey asks. For example, “if the water utility generates funds, do they keep them or are they returned to taxes?” In Kitchener, the decision was made to use advertising revenues to reduce tax rates. Sponsorship revenues are returned to the budget of the facility or program that generates them, while “funds generated by enterprises stay within that enterprise,” he says. That means “Water revenues stay in water.” However, a different municipality might choose to apply revenues to anything from infrastructure rehabilitation to new program development. Done right, entrepreneurial revenue generation can build on authentic connections between businesses and the community to reduce pressure on the tax base: a win for all concerned. ALL PHOTOS COURTESY OF THE CITY OF KITCHENER
A Toyota test-drive location outside of the Activia Sportsplex in March
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ORGANIZ ATIONAL D E SI G N
Study finds municipal organizational systems built around preparing for and coping with shifting priorities By Ian Smith, NDSIK Management Consultants
I
t has been suggested, “Strategy cannot be successfully executed without the right organization design. ” Experience also suggests that organization design helps improve performance by focusing on the key elements in the organizational system as illustrated at right. Organizational design is particularly important to municipalities since it has a direct impact on the quality of services they offer. And it is the quality of service that determines what people think of their municipal government. The purpose of this article is to summarize the observations and key findings from interviews of over 20 municipal leaders regarding the design of municipal organizations.
Culture
Environmental & Operating Strategy Context
Leadership
Outcomes / Results Structure
Processes
• Organization • Unit • Individual
Human Capital
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OR G A N I Z AT I O N AL DES IGN Overview of findings So, what was learned? It should be noted right up front that there was no “aha moment.” Nothing was said that would lead one to think, “Why aren’t all municipalities doing this?” A key finding was that the variability between municipalities was more about the levels of service offered and how these services are provided. As noted above, this links directly to the quality of service and the perceived performance of the municipal government. Overall, there are several general observations and conclusions that are worth noting: • Defining and understanding the organizational strategy and target outcomes are seen as important in the design of any municipal organization. They provide the direction and focus for the design effort. However, it was also commented that they are not always explicitly defined and/or widely communicated; • There are different approaches used to design municipal organizations yet there are commonalties between them – understanding the current organization and operating context, confirming design principles and developing and evaluating options iterating to the preferred design; • People are seen as critical in the successful implementation of the final design yet there were questions raised as to when to consider existing staff in the design process; • Leadership is felt to be important in terms of providing visible and ongoing support to the design effort but also as a stakeholder that needs to buy-in to the final product; and • Engagement and communications are felt to be critical, and increasingly important, to the overall success of any design initiative even though the approach to engagement can vary These findings along with a number of common themes are discussed in more detail below.
Detailed results Change is the most common driver of organizational design The key drivers of organizational design that were identified are what one would expect: change in staff, changing circumstances or demands leading to issues, gaps or new opportunities in service delivery, regulatory changes, changing council priorities, a new strategic plan; and/or the need to reduce costs. The list could go on. No surprises here. One particular issue that was seen as a key driver of organizational change is a perceived lack of clarity in organizational roles, responsibilities and/or accountabilities. Concerns include potential duplication and overlap in service delivery.
Several factors are seen as critical to successful design The senior leaders identified several critical success factors in organizational design:
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• Be clear on why the review is being undertaken, how the review will work and the expected or target outcomes, all of which is supported by visible and ongoing leadership; • Ensure that the leadership team understands, buys in and is supportive of the review and potential changes; • Plan for and engage staff at all levels in the organization and at different stages of the review within defined boundaries that clarify what is expected and how the information will be used; • Leverage potential champions of change while anticipating and planning for potential opposition; • Develop a comprehensive communications plan which addresses the needs and expectations of the various stakeholders throughout the process; and • Move expeditiously to achieve visible and measurable results There are various forms of stakeholder engagement Having identified stakeholder engagement as critical to successful design, the question then becomes, what is the most effective form of stakeholder engagement? Face-to-face engagement was still seen to be one of the most effective engagement tools, whether it is interviews, focus groups, staff meetings or town halls. Cross-functional teams who are actually involved in the design were also seen as another effective and productive engagement technique. One other comment on engagement: it appears that there is much greater emphasis today on the extent and level of engagement. The management team, and potentially a crosssection of staff, has always been part of any organizational review. There now appears to be a much higher expectation that staff at all levels will be consulted throughout the review process. As noted in the previous point, the terms of engagement, and how information will be used, need to be communicated and understood. Surprisingly, the various forms of social media were not seen as effective input tools but more as potential channels for sharing information and ideas, and soliciting feedback, as the organization moves through the design effort. There are potential challenges and issues that need to be considered and addressed The potential reaction to change was seen as the number one challenge. As commonly known, people do not react well to change. The means to overcome, or at least reduce, resistance include engagement and communication strategies with clear messaging on purpose, approach and expected results. Other identified concerns include management capacity (to deliver on the new organization), affordability (of the proposed changes) and the time and effort required to complete an organizational review. All of these issues need to be considered in the planning and implementation of an organizational change. More pragmatically, it was also noted that in planning for implementation the organization may need to address certain basic but important requirements, such as changes in accounting and reporting requirements or space planning.
ORGANIZ ATIONAL D E SI G N
“Organizational design is particularly important to municipalities since it has a direct impact on the quality of services they offer. And it is the quality of service that determines what people think of their municipal government.”
There is no one right approach to design The feedback suggests that there is no standard or commonly accepted approach to the design of municipal organizations. It was also suggested that there is no single design applicable to every public sector organization and that the context surrounding each organization will determine which design makes the most sense. If this is true, it means that there should be much greater emphasis on the environmental analysis that is typically conducted as part of an organization review. Even though there may not be a standard approach to organizational design, the feedback suggested several elements that could be considered and potentially included: • Look at the organization from a “customer” perspective; • Understand the operating context through an environmental analysis as noted above; • Make sure that there is a detailed understanding of the current organization; in particular, how existing services are delivered, roles and responsibilities and perceived issues, gaps and/or opportunities; and • Conclude on when to consider existing staff in the development and/or assessment of organizational options This last point, when to consider existing staff, is always contentious. Purists would argue that a design should be driven by strategy and not compromised by personnel considerations, at least at the options stage. The pragmatists would argue that you can’t just change all existing personnel so you should consider them right up front. Based on experience, both positions are correct – to a degree. The development and evaluation of options should be driven by the organizational strategy and other key design principles, not by considerations of existing personnel. However, once the preferred design has been determined, it then needs to be populated with existing staff and the design potentially adjusted as part of implementation to reflect individual skills and competencies.
There are a number of organizational design principles that could be considered Given that organization design principles are used to help develop and evaluate organizational options, the feedback suggested a number of potential principles: • Alignment with the overall strategic/corporate direction; • Enhance or enable improved customer service (residents, clients and businesses); • Create single points of accountability; • Balance the scale and scope (of direct reports); and • Ensure cost efficiency Other principles that were suggested included “organizational flexibility” and “understandability.” It was also noted that the organization should be clear upfront about the givens or key assumptions that will guide and shape the design effort. There are commonalities in the thinking around organizational models Given the similarities in the services provided by municipalities, there was not a lot of variability or, as some would say, innovation, in the organizational models that are used. For the most part, many of those interviewed suggested that a “functional design” was either most common or most appropriate given the range of services offered by a municipality. There were some common “clusters” of services identified – community services, operations or public works, planning and development, corporate services and, where applicable, social/health services. However, some were quick to note that there is not one model that works for all and that the actual design depends on local circumstances, environmental conditions and, potentially, existing staff, as noted earlier. There are often primary and secondary drivers of design. For example, the overall design of a municipality can be based on functions while the next level down can be based on a different design variable such as geography, customer need or service offering. The size of the municipality was also identified as an important variable. It was observed that the larger the municipality, the greater the tendency to consolidate services at the most senior level with much broader spans of control and areas of responsibility. Culture and leadership are important to success Culture and leadership were seen to be critical in the design and the overall success of an organization. MUNICIPAL MONITOR
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NOMADFRA/SHUTTERSTOCK
Size doesn’t matter Most agreed that the approach to organizational design doesn’t really vary whether it is the design of all or part of the municipality (other than to accommodate differences in scale and complexity). If the municipality is only looking at part of the organization, it was felt to be important that the final design align with the overall corporate design. It was also recognized that council might be less engaged and/or interested in the design of part of the organization.
OR G A N I Z AT I O N AL DES IGN Lack of Senior Team Alignmennt
• Overestimating the amount of senior team alignment that exists or assuming that enough will be built during the change process itself to create alignment
Poor Management of Stakeholders
• Paying minimal attention to how the world of stakeholders is responding to the changes being undertaken, ignoring negative reactions and skepticism • Not building effective change management strategies to lead and manage the transformation
Resistance and Distrust
• Not taking into account how an organization’s past experience with change initiatives may complicate or boost implementation
Insufficient Plan for Execution
• Inadequate resources to execute the changes and manage the transformation
Lack of Followthrough and Accountability
• Lack of clear accountability for designing and implementing specific aspects of the transformation agenda
• A change plan that does not include a systemic view of the organizational changes required to support the transofrmation
Lack of Meaningful Measures
• Not being able to interpret and escalate key information to executives for rapid decision making and course correction M L
• Lack of early warning measures (i.e., leading indicatiors) that allow an organization to know when plans are in jeopardy H
Service Delivery
• Stronger focus on longer term outcome measures and minimal attention to transfrmation metrics that would track the evolution of the transformation
Leadership was described as being a key factor in the success or failure of an organization – poor leadership can affect attitude, results and ultimately staff turnover. Securing leadership buy-in and support was seen as critical to the success of any design effort. Culture was felt to be a particularly important factor in implementing and sustaining successful organizational change. Not understanding the existing culture and how it might need to change was seen as a key reason for failure in implementing a new organization design.
assessing and redesigning their organizations. Yet, what allowance is made for implementation of the approved changes? Often very little. Changes are assigned to those with the organizational accountability for the given change with no provision, resources or otherwise, to ensure that the changes will be successfully implemented. In addition to providing the required support in implementation, it is seen as important that forms, policies, procedures and reward systems be aligned with the proposed organizational changes.
The role of council is to provide strategic guidance and advice – not to design the organization Councils are seen as a key stakeholder in organization design and play an important role in providing input to the process. A clear distinction was made between participating in the process versus leading the process. It was strongly felt that councils should not play a direct role in the actual design of the organization as this was seen as an administrative role. However, it was felt important that councils be kept informed throughout the process.
Failure in organizational design results from a number of factors Several factors were identified as contributing to the failure of planned organizational changes as noted above. Other contributing factors include: • Lack of council support (and therefore the need for council to be engaged throughout the process depending on the scale of the review as noted earlier); • Not dealing with the tough people decisions, compounded by putting the wrong people in leadership positions; and • Not monitoring and evaluating progress against target outcomes, or making changes if the design doesn’t appear to be working
Implementation is where change really starts Failure in design often comes from failure to execute. Organizations can and do expend a great deal of energy in
Civil / Municipal Land Development Environmental Solid Waste Management OTTAWA KINGSTON SUDBURY TIMMINS NORTH BAY HAWKESBURY GUELPH
Urban & Regional Planning Geographic Information Systems Mechanical Electrical Structural Architecture
w w w.jl r ic ha rds.ca
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The above diagram summarizes the common reasons for the failure of change initiatives. Municipal organizations operate in a dynamic environment. They must continually respond to changing circumstances or expectations. This article has identified a number of common themes in the successful design of a municipal organization. Overall, it was felt to be particularly important that the design be driven by a strategic plan, incorporate the collective experience of other municipal organizations while being tailored to local requirements and that staff be proactively engaged in the design process. Ian Smith is the president of NDSIK Management Consultants.
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