Chico latest California city to restructure in deficit fight

150 150 Alexandra Bjerg

Chico’s “right-size” of the government will cut costs, but it’s a balancing act. (Photo Credit: roseytsp)

Life is tough these days for city managers. The recession dealt a severe blow to local governments, hitting ‘em right where it hurts: the budget. As cities struggle to adapt to this new fiscal reality, several city managers are turning to the common strategy of private sector consolidation as a means to cut costs and improve efficiencies.

“Growing up in a private sector environment, my parents owned a private business, you realize that if you don’t adapt and change you will get left behind,” said Chico City Manager Brian Nakamura. “Unfortunately I feel that some government agencies are being left behind and are unable to serve the community as well as they should be.”

The City of Chico became the latest California city to undertake the incredibly complex task of restructuring its government after the city council approved Nakamura’s plan to “right-size” the organizational structure last month.

Nakamura’s bold plan calls for a reduction in the number of city departments from 10 to 5. “Our goal right now is to minimize resource expenditures, streamline our organization, and focus on core services,” Nakamura explained.

If that weren’t daunting enough, Nakamura hopes to have the changes in place in roughly 45 days in order to draft next year’s budget around the new organizational structure. 

Hired just six months ago, Nakamura clearly isn’t afraid to make tough decisions or to rock the boat.

Facing a $3.5 million structural deficit, an annual estimated savings in excess $1 million in salaries and benefits alone is quite the incentive to restructure, and to do it quickly. 

But don’t let the numbers mislead you, these aren’t blunt meat-cleaver cuts.

“Rightsizing doesn’t just mean eliminating departments and staff,” explained Nakamura, “it really means finding our core objectives for the services and programs we need to provide.” Which is why Nakamura and his staff spent months thoughtfully assessing the city’s organizational structure to determine “how to most efficiently and effectively serve the community’s needs.”

The five new core departments will be: administrative services, public works, community development, police, and fire.

Despite the elimination of half the city’s departments, Nakamura says the reorganization will actually enhance service delivery by reducing departmental overlap.

Aiming to improve efficiency among a smaller set of staff, the city recently launched an extensive cross-training program within the new departments.

Training personnel within public works to maintain their own website, for example, will allow for immediate customer service updates to be posted online without having to rely on IT. People in IT are then freed up to do more data collection and analysis, which Nakamura believes is very important. “It’s what drives a lot of our organization.”

The push towards analyzing data will help Chico identify the most efficient allocation of resources as well as inform the continued tinkering of the organizational structure based on performance. Nakamura touts the critical role best practices, benchmarks, and evaluation will play in ensuring this enormous undertaking is successful.

“One of the most difficult challenges we in government face, is not knowing what the actual outcomes will be,” said Nakamura, who has agreed to provide the City Council with a progress update every six months. “We have an environment that changes terribly quickly so we need to constantly monitor and adapt or adjust our organization accordingly. I recognize this as something that government is really slow to do.”

Struggling with dwindling resources, cost-savings may be the major factor driving the municipal restructuring trend, but the long-term benefits extend beyond reigning in bloated city budgets. Rightsizing government also increases efficiencies and improves governance, both of which are key to restoring the public’s trust in government.

Despite the numerous benefits, the decision to consolidate is a difficult and often unpopular one most city managers and elected officials would rather not have to make. Nakamura credits his extremely supportive city council and the public input gathered from outside City Hall with making his job of overseeing this incredibly complex process possible.

Streamlining the organizational structure of cities now, however painful it may be, will ensure future stability and solvency. Restructuring may be hard, but Stockton and San Bernardino would argue that bankruptcy is harder. 


Alexandra Bjerg

All stories by: Alexandra Bjerg