Originally posted at CalNewsroom.
By John Hrabe.
Just two years ago, Steve Danley was heralded as a hero of Orange County’s human resources department. Known as “the man who uncovered abuses at the county’s human resources department,” Danley’s solutions to the department’s systemic problems are experiencing setbacks of their own.
Plagued by cost overruns and project delays, Danley’s grand vision for restructuring the county’s HR department has failed to realize any of the promised taxpayer savings or government efficiencies. On Tuesday, the Board of Supervisors quietly moved forward with two agenda items to advance an HR reshuffling that is behind schedule and over budget.
Danley’s re-centralization plan
In 2011, Danley led a performance audit of Orange County’s human resources department, which showed major abuses in personnel decisions. Some employees were receiving unjustified raises, while others were demoted in violation of county policies and state rules.
The Orange County Board of Supervisors responded by tapping Danley to serve as the county’s human resources director. The first order of business was convincing county supervisors to consolidate power into a centralized human resources department, which Danley would oversee.
“One of the primary circumstances contributing to deficiencies in the handling of EEO and Harassment claims is the current decentralized structure of Countywide HR services,” Danley wrote in a September 2012 memo to the Board of Supervisors. He told the Voice of OC, “Decentralization only works if you have a strong central HR that provides oversight.”
“Do we win or lose on this?” then-Supervisor Bill Campbell, ever-mindful of the cost to taxpayers, asked county staff before the unanimous vote to reorganize the HR department. ”I have one concern: the issue of the cost structure.”
In the county’s October 2012 report, Proposal for the Major Reorganization of Countywide Human Resource Services, the answer was unambiguous. The restructuring would deliver “between $1.2 million and $1.7 million” in estimated annual cost savings.
“Cost savings are anticipated to be achieved through the recentralization of HR activities,” the report explained. “A net reduction in the number of positions is estimated at 18.”
In the fall of 2012, supervisors granted Danley his wish and approved his major reorganization of the county’s human resources department. The reorganization even came with a new name, Human Resource Services, and the clear promise of greater accountability, a net reduction in staff and at least a million dollars of taxpayer savings. In order to facilitate this plan, Danley asked for “one-time costs of relocating staff.”
“Given that the majority of these spaces are already outfitted with cubicles and telecommunications, the cost is estimated to be approximately $244,000,” promised the county HR reorganization proposal.
$244,000 relocation costs balloon to $1.1 million
Fast forward to today, the recentralization plan isn’t on schedule and its true costs are bubbling to the surface. At its February 4 meeting, the county approved going to bid on a $1.1 million “HR Consolidation Relocation” project. The project budget, $1,088,857, is more than 4 times the original cost promised in October 2012. That works out to $16,000 per employee in the workspace.
Curiously, not only was the agenda item buried under the OC Public Works tab, it failed to identify any costs in the agenda summary.
Instant savings with budget shell game
It wasn’t the only HR-related item on the board’s agenda. As part of its Fiscal Year 2013-14 Second Quarter Budget Report, the supervisors shifted the cost of two HR positions to the county’s CEO’s budget.
County of Orange FY 2013-2014 Second Quarter Budget Report
Human Resource Services Reorganization
Approve County Executive Office (CEO)/Human Resource Services (HRS) budget related reorganization and authorize CEO, HRS, and Auditor-Controller to facilitate any necessary position, encumbrance, appropriations, revenue, and NCC changes from HRS, Department 054, to CEO, Department 017, effective with the FY 2014-15 Budget.
This request is required to make technical changes to align the budget structure with the already existing reporting structure,including the transfer of two (2) positions : one (1)Human Resources Director, and one (1) Executive Secretary I, from Department 054,HRS, to Department 017, CEO also effective for the 2014-15 fiscal year. All Budget Controls currently under HRS, Department 054, will be transferred to Department 017. During the FY 2014-15 budget development process, CEO and HRS will collaborate to identify any other Budget Control 054 positions for possible transfer to Budget Control 017 and establish units and job cost structure in Budget Control 017 to track HRS activities. Approval of this request results in no budgetary changes in FY 2013-14.”
Why the shift? Danley did not respond to an email request for comment.
However, by moving the salary and benefit costs for the Human Services director and his assistant out of the department’s budget, it delivers hundreds of thousands of dollars in paper savings, when annual budget reviews are conducted.
There are grumblings that other services are moving at a snail’s pace as the county’s HR focuses on its relocation. Due to budget constraints, other departments have been asked to do more with less. And Human Services, they’re doing less with more.