City Council Approves Restructuring Finance Dept., 5-0

After a lengthy discussion to understand why South Pasadena needs to restructure the city’s Finance Department, a move which will add between $30,000 and $40,000 to the budget, the City Council unanimously approved the reorganization.

The council voted 5-0 to allow in the restructured Finance Department three employees to be laid off, two new managers to be added, and the outsourcing of payroll and business licenses.

The current configuration of the seven-person department with a $2.7 million budget had remained untouched for years until a new city manager, Stephanie DeWolfe, was hired last year. The restructuring will reduce the number of employees to six and add between $30,000 and $40,000 to the budget.

“This has been needed,” Councilman Robert Joe had said during an earlier interview. “It’s going to be good.”

There was a moment, though, during the council’s meeting on Nov. 7, where it looked like the restructuring was going to fall flat on its face because of the cost.

As an example, Councilwoman Diana Mahmud was hammering ADP, the company slated to take over the payroll, to make promotional concessions in the contract that would give a discount to the city over two years instead of just one. The promotional rate saves the city about $20,000 over two years.

Representatives with the nationwide and international company ADP were reluctant to do so but eventually acquiesced to the councilwoman’s request.

There were those in the audience that said Mahmud appeared to be grandstanding because the savings was immaterial taking into consideration the overall reorganization.

It wasn’t until DeWolfe explained the reason for the restructuring that the council began to soften its objections.

“We are adding a depth and breath of competency to the organization we haven’t had,” DeWolfe told the council during the restructuring discussion. “In the Finance Department, you need to have checks and balances. We didn’t have that the way the Finance Department was structured before… Yes, it costs us money to do that but the cost to the organization for not operating and having a structure in an appropriate manner will be much greater than the cost of shifting to this new structure.”

Mayor Pro Tem Dr. Marina Khubesrian said the increase was a minor concern when dealing with the necessity for the restructuring.

“There is some increase in cost, that’s true, but the benefits to us are tremendous,” Khubesrian said during the council meeting. “This is just not that much. I have no problem moving in this direction.”

Mayor Dr. Richard D. Schneider also was concerned about the increase in the approximate $2.7 million Finance Department budget.

“I believed this deserved a full airing,” Schneider said. “I think if people listen to this discussion they will understand that there are needs that we have to meet and this might be the best thing for the city.”

The restructuring of the Finance Department will include outsourcing business licenses and payroll along with three layoffs and two new management positions.

The city is now going to contract with HdL Companies, founded by a former city manager and finance director in 1983, to handle all business licenses for the city. HdL created software specifically for public agencies issuing business licenses and has already been handling the local business license process for more than three months, according to officials.

DeWolfe and Craig Koehler, newly hired finance director, have said people were waiting for more than 90 days on average and sometimes even longer to get a business license or renew one before HdL took over the process. That has changed to less than a couple of weeks, they said.

“Customer service is my number one priority,” said Koehler, who was hired in August of this year. “We should be able to give a business license in a reasonable amount of time which would be weeks or less, but the city was experiencing significant delays processing them.”

South Pasadena has 2,600 active business licenses, according to DeWolfe. The delay had been occurring since DeWolfe was hired in November 2017.

As mentioned earlier, the restructuring of the department also will include outsourcing payroll, a function that has been handled by one person by hand for nearly three decades. There are currently four people in the Finance Department, including Koehler.

The restructuring also includes laying off three people, one of whom is the person who has done payroll for nearly 30 years, and hiring two management positions: an account manager and a finance manager.

The entire reason for the restructuring is to improve customer service, DeWolfe and Koehler said. In fact, they said, residents of South Pasadena will be more than satisfied with the efficiency of the city’s operations because of the restructuring.

“The two pieces of the outsourcing and the restructuring of the employees really allows us to build a team,” De Wolfe said. “It will create a much higher level of customer service…It’s a much higher level for our employees as well as for our customers.”