Interim CRA Admin. Jerry Scharlin Lays Out A Vision; But Will He Get To Implement It?

December 30, 1999
To: All Staff
From: Jerry Scharlin, Interim Admin.
cc: Agency Board of Commissioners

Organizational Improvement Plan

I am pleased to present to you the proposed Agency organizational improvement plan. I am also pleased to report that the leading membership of the Agency's Core Team supports the proposed changes. These changes are in the best interest of the operational effectiveness of the Agency and, in turn, the communities we serve.

The implementation of all of these changes follows our successful production of a clear budget last October and marks the beginning of the next phase of bringing order to the Agency. These improvements are essential for the effective operations of the Agency. The immediate implementation of these improvements will be the first order of business subsequent to the confirmation by Council and Mayor of the Board's recent proposed extension of my appointment.

Guiding these improvement initiatives is the Agency Vision statement we created together. I believe that the focus and inspiration contained within the Vision will allow us to move forward with purpose and commitment. The Vision and proposed realignment are attached.

Before articulating the details of these changes, I want to review the reasons for them. The Agency has faced numerous challenges in the past few years; among the most telling is the precipitous drop in the rate of increase in tax increment revenues. This fact is deserving of note for several reasons: 1) the rate of increase is the driver of future funds for underwriting new investments, 2) the decreasing rate shows the relative ineffectiveness of past strategies to drive higher property valuations, even in the face of the real impact of the recession, and 3) it suggests that ever higher proportions of public funds must be devoted to supporting staff rather than building projects in the communities we serve, a situation that is neither sustainable nor merit worthy.

Additionally, withdrawals by the State and City of over $100 million in CRA funds compelled a reduction in staffing by almost 50%. At the same time, the needs and expectations of communities and their elected representatives rose, as evidenced most notably by the doubling of the number of Project Areas. Aggravating our situation is the unclear role of the Agency as it pertains to Economic Development within the larger City structure. The result has been the inability of the Agency to focus its efforts and internal and external strife driven by a demand for our resources that outstrips the resources available to us.

Now is the time for the Agency to respond to these challenges in a manner that is more than stop-gap, and is instead comprehensive and long-lasting.

One of our more important products to date is the aforementioned Vision statement (Attachment A). More important than the Vision document itself is the fact that well over half of the Agency's employees participated directly in its formation with the opportunity for all staff to provide input . It is the power of these communications that have and will continue to build focus, commitment and teamwork. The Visioning process-along with the learning from other work groups in technology, strategy and work processes-exemplifies a key conclusion. That conclusion is the need for the Agency to move to a project centered organization.

A Project Centered Organization is dependent on the effective deployment of teams. The principles that underlie a project centered organization include collaboration, adaptability, flexibility, clear lines of authority, accountability, and shared responsibility. Teams will define timelines, milestones, and budgets for their projects. In this context, "project" means any generic project that Agency staff undertakes, such as assembling the annual budget, as well as carrying out a public infrastructure project or facilitating a private development project.

In essence, the Agency is used to organizing work around projects. Staff historically have come together for specific projects that last anywhere from a week to three years or more which have involved the expenditure of $10,000 to tens of millions of dollars. As many of you indicated throughout the last several months, the current alignment of leadership and staff, work processes, and systems do not now effectively support, and in some cases militate against, conducting our work in this manner. The waves of reductions and stop gap quick fix assignments have resulted in an Agency lacking an understandable organization of its work or its people. We have brought order to our budget. Now we will bring order to our organization.

The work groups provided enormous assistance in framing the Agency's challenges related to the systems, processes, and strategies we need to accomplish our redevelopment-oriented goals. Their work is now completed and in combination with the deliberations of the Agency's Core Team has shaped the proposed realignment and the work ahead of us.

The underlying goals and purpose of the realignment included the following:

• To improve the operational efficiency of the Agency by spreading scarce personnel resources over literally hundreds of projects thus allowing each project to benefit from our specialists' attention.

• To flatten the organization through the direct reporting of all Deputy Administrators to the Administrator; this simplifies reporting and reflects the fact that we have half the staff of five years ago.

• To separate the lines of authority for community-based advocacy from development implementation in order to facilitate open dialogue on conflicting views pertaining to the allocation of scarce resources.

• To separate the lines of authority for project valuation and due diligence from those for community advocacy and development implementation to avoid any perceived conflicts of focus or roles.

Rather than implement all these changes in alignment, team structures, processes, and systems immediately, some will happen as quickly as possible and others will be implemented over time as we become familiar with this new way of doing business.

As mentioned, much of our work is already done in teams. Teams that are already in place will continue to function until their projects are finished or have reached a critical milestone. A newly configured and newly chartered Project Review Committee will examine each existing project to identify those critical milestones. As new projects are identified, new teams will be formed using those new processes and systems that will be in place. The most critical new process that will be formulated will be the process that charters these teams with their membership, budget, goals, timelines, and lines of reporting.

Some of our improvement plans may require Board and/or Mayor and Council approval before we can move forward to implement them. Other prospective improvements-such as modifications in job descriptions-will require a "meet and confer" process with the unions that represent the different bargaining units within the Agency. Regarding Labor, I will work with the bargaining units as partners in the Agency's ongoing improvement efforts with our shared goal of delivering the best possible services to Los Angeles' blighted communities. It is our intent to move forward with a competitive selection process for all promotional opportunities.

I hope that you will view these improvements as I will view them-namely, as evolving over time. Should we need to make adjustments, we will manage those issues as they occur.

Together, let us all wish our Agency good fortune as we embark on these exciting changes.

Signed: Jerry A. Scharlin, Interim Administrator; Steve Andrews, Chief, Strategic Planning; Richard Benbow, Deputy Administrator/Technical Services; Len Betz, Project Manager; Ken Clark, Purchasing Manager/Acting H.R. Director; Ann Marie Gallant, Deputy Administrator/Economic Development; Mark Johnson, Senior Finance Officer; John McCoy, Deputy Administrator/Housing Services; Robin Scherr, Social Services Coordinator; Don Spivack, Deputy Administrator/Community Development II; Kevin Sullivan, Director of Asset Management

Attachment A

Mission: Our responsibility is to ensure the permanent removal of blight in redevelopment project areas.

Vision: Our purpose is revitalizing targeted areas by directly stimulating property improvements that foster sustainable development and promote the self-sufficiency, wellbeing and prosperity of families, individuals, businesses and communities of Los Angeles.

Our philosophy of interdepartmental teamwork and neighborhood empowerment is centered on a respect for one another, the public we serve and the following guiding principles:

• Openness

• Integrity

• Accountability

• Responsiveness

• Flexibility

• A can-do attitude

Our position as the leading catalyst for the market's performance in making beneficial property investments in redevelopment areas is established by:

• A capability to mobilize resources of allied organizations,

• A commitment to nurture redevelopment specialists, and

• A conviction to always work to earn the public's trust.

SLOGAN:

First in the fight against blight!

Organizational Goals

• Service Excellence-providing convenient, professional and courteous service.

• Organizational Effectiveness-creating a positive and collaborative work environment.

• Workforce Excellence-recruiting and developing productive employees.

Operational Goals

• Project Area Fiscal Strength-securing the funds to make needed investments.

• Project Area Development-developing prototypes and anchors to mark a pathway for success.

• Project Area Partnerships-establishing alliances that will leverage resources.

Strategic Directions (FY 01)

• Identify prototype projects that represent development patterns which could result in a community supported level of build-out by the conclusion of the plan's duration.

• Establish predictable project area revenue streams for the first half of every project area's life that will allow for investment in projects that will generate flows equal to or greater than their required levels of subsidy.

• Provide training, recruitment, retention and review programs that in total will result in a work force that reaches or exceeds excellent levels of review for 15% of all employees and above average levels of review for 70% of all employees for each class of employee across all technical and professional areas of performance as established by duly approved performance metrics.

• Implement an automated strategic management system that will allow decision makers to review periodic reports on progress toward project objectives relative to budgeted and actual expenditures and to executive areas of accountability.

• Establish a project appraisal, feasibility and oversight process that will detail the flow of all funds, itemize risk and return and provide all information in a manner that would be required for an independent third party verification of all findings and facts.

• Formalize and articulate other departments' and the CRA's role in supporting the City in the creation and implementation of citywide economic development policy, including policy, plans and initiatives within designated redevelopment project areas.