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The Quiet Crisis in Municipal Government
By Frank Dudek

Published in the September 2006 issue of e-Journal AWWA.

Recently, the general manager of a mid-sized Southern California wastewater agency had a problem. When a valued, long-time employee in his early 50s retired and moved out of state, the in-house replacement pool suddenly looked shallow. Rather than having a supply of mid-career employees with established community ties, the general manager was looking at younger, less experienced employees. Many of these employees were long-distance commuters priced out of the local real estate market and at risk of leaving the agency if it looked unlikely they could afford a home.

Welcome to the near-future for everyone. The much-heralded demographic shift in the workforce is starting to take hold as 50 million generation X-ers prepare to take the place of 80 million Baby Boomers. As experienced public-employee Boomers start to leave, a great deal of localized experience and knowledge goes with them.

The demographic shift will hit the public sector harder than the private sector because Boomers represent a higher percentage of the public workforce, according to the International City/County Management Association (ICMA). The association has dubbed the situation a quiet crisis and launched a program called the Next Generation Initiative to help agencies recruit and develop necessary talent.


The out-of-balance workforce in municipal agencies is more than a product of demographics, however. In California, many public agencies encourage retirement after 30-plus years with attractive pension programs that make it financially desirable to leave an agency. Public agencies -- like many private sector counterparts -- have been weak in leadership transition to grow the next generation of public workforce leaders. At a recent League of California Cities leadership seminar, participants identified a number of barriers to hiring qualified managers to replace those who are choosing early retirement, including
  • few incentives to move up,
  • lack of succession planning programs,
  • civil service restrictions on designating heirs apparent, and
  • generational issues concerning younger people and government service.

    At the other end of the workforce funnel, fewer U.S. college students are graduating with or are pursuing civil engineering degrees. The course work can be difficult and leaves little room for vocational experimentation. For 19 and 20 ear olds, a career in civil engineering lacks the glamour and the money of investment banking, law and medicine. And, there is little likelihood the federal government will fund civil engineering scholarships similar to those of the Clean Water Act in the 1970s – an important financial carrot that, at the time, put many individuals on the path to civil engineering careers.

    Ironically, college students who bypass civil engineering because they don’t see opportunity may miss out on a bull market for employees. The need for public works professionals will continue to grow as water infrastructure ages or as new infrastructure is required in the booming U.S. western and Border States. At the same time, the shortage of qualified workers will create intense talent competition between public agencies and the private sector -- or possibly even local market public agency versus public agency competition for experienced, senior employees
    .


    The good news is solutions are on hand. More aggressive public agencies have begun addressing the staffing issue through programs to improve traditional recruiting and also by recruiting candidates from the private sector and military who would not be considered as candidates for public agency work, according to ICMA.

    The California Association of Sanitation Agencies (CASA) said its member agencies are facing a shortage of certified operators because of retirement, high cost of living, and new rules that can require up to 10 years for reaching top certification levels. To combat the shortage, member agencies are offering higher salaries, monetary incentives for certifications, more training, longevity pay and enhanced benefits for those who stay past age 60, and job restructuring to free operators from routine work that could be done by laborers.

    An intriguing consideration is the availability of foreign talent available through the temporary H-1B visa program most often associated with the U.S. high-tech industry. These visas are valid for specific jobs for three years with the possibility of one renewal. Companies can and have taken advantage of skilled professional engineers from Canada, India, and Ireland. Congress, however, has significantly cut the annual quota for these visas from almost 200,000 in 2003 to well under 100,000 currently.

    Another proven, workable solution is the long-accepted practice of extension-of-staff, which soon may be used more than ever before. Using private consulting firms as extension-of-staff for public agencies has advantages to both parties. Some public agencies often cannot find or justify the cost of hiring full-time technical or management expertise. Instead, agencies may choose to bring in consulting firm staff on an as-needed basis. The public agency’s need may be only part-time or for a specific project, and the convenience of hiring on an as-needed basis can be extremely cost-effective. With no recruiting fee, the public agency can fill a position with a consultant for as long as required without risking a full employment commitment. On the other hand, the consulting firm, offering this service to several public clients, can afford to hire several experienced personnel. This situation ensures redundancy for each client should there be a staffing or needs change.

    Often the as-need help comes by way of a retiring public services manager who wants to begin exercising his or her earned retirement benefits while continuing to work full- or part-time with a more flexible schedule. In this mutually beneficial situation, the individual’s accumulated experience and knowledge is still accessible without the normal administrative and political encumbrances.

    This situation also benefits younger employees working at public agencies. The extension-of-staff relationship offers public agencies experienced private sector talent in the short term while younger public agency staff members gain experience and are molded with the agency’s culture and best practices.

    There are additional benefits of using the extension-of-staff public/private partnership as one part of a total answer to the demographic crisis in municipal services.

    Control remains in the public sector. Extension-of-staff is not privatization. All governing power and municipal assets remain in the public sector. Private firms serving in extension-of-staff roles work at the pleasure of the governing board and agency staff only as long as needed to accomplish the current goals and objectives, remaining focused on the immediate needs.

    Competition remains a driving force. Public agencies can qualify several private agencies to provide extension-of-staff services on an as-needed basis. This protects against complacency from a single supplier.

    Technical expertise is efficiently managed. With a greater demand on their services and increasing regulatory constraints, public agencies are more challenged than ever to maintain the appropriate level of technical expertise in-house. Workloads fluctuate with economic development, increased regulations, funding availability, and unexpected emergencies. Further, public projects have become more complex, requiring greater technical and regulatory specialization as well as more sophisticated coordination by project teams. Extension-of-staff programs enable public agencies to supplement their staff with key experts and professionals from the private sector on an as-needed basis.

    Staffing costs can be well-managed and quickly adjusted. Adding a full-time and adequately qualified employee at a public agency takes valuable time and a long-term funding commitment. Extension-of-staff allows public agencies to immediately tap the expertise needed to supplement in-house capabilities, yet only for as long as needed. The agency pays only for the time worked and is not responsible for the long-term total costs of a permanent employee.

    No magic bullet will solve municipal agencies’ looming demographic crisis as Baby Boomers retire in greater and greater numbers. By combining more innovative public sector employee recruiting and retention efforts with successful practices such as extension-of-staff, there is a good chance the quiet crisis can be successfully managed.


    Frank Dudek is the founder and president of Dudek, a Southern California engineering and environmental consulting firm. He is responsible for overseeing strategic planning and financial performance of the 200-person firm headquartered in Encinitas, California with offices in California’s Orange, Riverside and Santa Barbara counties. Frank has held leadership positions in a number of professional organizations including American Public Works Association (APWA), California Water Environment Association (CWEA) and the San Diego chapter of American Society of Civil Engineers (ASCE).

    REFERENCE
    Abbey, C.W. & Boyd, D.J., 2002. The Aging Government Workforce. The Nelson A. Rockefeller Institute of Government, Albany, N.Y.



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