Modesto’s auditor spent about six months reviewing the Public Works Department’s water and wastewater divisions, including interviewing more than 40 managers, supervisors and rank-and-file city employees.
The auditor’s conclusions: The two divisions are plagued by a host of problems, including poor leadership, low morale and high turnover, and the city needs to reorganize public works functions and reform its leadership to address these problems.
“The operation of the water and wastewater divisions appears to be strong technically, but poor leadership has negatively impacted communications, morale and ultimately the reputations of the divisions with the City Council and industry stakeholders,” wrote officials with Moss-Adams LLP, the certified public accounting and business consulting firm the city has retained as its auditor.
The 42-page report states there is a perception of ineffective leadership in public works administration, and the wastewater division is “characterized by a culture of retaliatory and punitive discipline as well as a lack of interest in collaboration with other departments and external stakeholders.”
The City Council’s Audit Committee is scheduled to discuss the report at its Tuesday meeting at Tenth Street Place. The report is online at www.modestogov.com/council/committees/audit.asp.
Modesto retained Moss-Adams in 2011 to perform a variety of work, including this review, at the direction of the Audit Committee.
The report concludes some of the problems are because of how the city has structured the work of public works and the Utilities Planning and Projects Department. “The current separation of functions along departmental lines has hindered the city’s ability to accomplish projects on time and on schedule due to competing priorities and communication difficulties,” according to the report.
Moss-Adams recommends the city reorganize its Utilities Planning and Projects Department and the Public Works Department’s water and wastewater divisions into a new Utilities Department and hire a manager to run it. Moss-Adams recommends the manager be a strong leader with the ability to improve management practices, morale and the culture.
This restructuring is in line with what City Manager Greg Nyhoff has talked about as part of a larger reorganization of the city he is undertaking based on other recommendations from Moss-Adams. Nyhoff has said public works would then be responsible for such functions as streets and sidewalks.
Public works’ water and wastewater divisions have 212 employees. The city provides 59 million gallons of water on an average day to more than 70,000 customers in the Modesto area while processing about 30 million gallons of wastewater.
Nyhoff and Deputy City Manager Dee Williams-Ridley, who is acting public works director, did not respond to emails Friday afternoon seeking comment for this story.
The Moss-Adams report contains 26 findings and recommendations. They include:
• The city remodeled and purchased sophisticated equipment for the laboratory at its Sutter Road wastewater treatment plant with the goal of doing all of the city’s lab work there as well as marketing the lab’s services to other cities and private industry. The equipment has never been fully functional; the city has not been able to obtain the certification for the additional testing; and staff does not have the experience to use the equipment. The reputation of the lab’s employees and the quality of their work is poor, and as a result, the city outsourced more than half of the laboratory analysis in its last fiscal year.
• From 2010 to 2013, turnover was 17 percent for the water and wastewater divisions and 29 percent for the Utilities Planning and Projects Department. And the pay for most water and wastewater positions is lower than what neighboring cities pay.
• Managers in the water and wastewater divisions report a perception of inconsistency in how disciplinary actions, performance reviews and other personnel matters are handled. “This perception has creating a mistrustful ‘us versus them’ culture,” according to the report.
The Public Works Department has experienced turnover among its top managers. Modesto fired the deputy director for water, Jim Burch, in September after about a year with the city. Burch and city officials have declined to talk about the reasons for his termination.
Public Works Director Dennis Turner retired in October after more than 30 years with the city. And the deputy director for wastewater, Gary DeJesus, resigned for personal and family reasons in December after nearly six years with the city.
The City Council created the Public Works Department in 2004 by merging the Engineering and Transportation Department with the Operations and Maintenance Department. In its first several years, public works came under fire for botching a water-rate increase, cost overruns on major projects, a sexual discrimination lawsuit and building a storage facility without the council’s approval.
The Audit Committee meeting is at 10 a.m. in Room 2001 on the second floor of Tenth Street Place, 1010 10th St.