1998 Quality of Life Optimas Award Profile City of Phoenix, Arizona

It’s like the legend of a sunbird, or phoenix, rising from its own ashes. According to myth, it only happens to one phoenix every 500 years. That’s hardly the pace at which today’s sixth largest U.S. city could run an efficient municipal government. Phoenix, the capital of Arizona, however, is following its namesake in spirit. Indeed, between 1940 and 1990, the city’s population soared fifteenfold, according to the most recent U.S. Census. Much of that growth is the result of migration from the eastern states and California.

Today, Phoenix is a leading industrial, wholesale and retail center in the vast area between Dallas, Denver and the California coast. Its current population includes 20 percent who are between ages 5 and 19; 44 percent who are between 20 and 44; and 17 percent who are between 45 and 64. Only 10 percent are older than 65. Over the years, Phoenix also has attracted increasing numbers of Hispanics — an estimated 21 percent of today’s total population (1.2 million).

As the city continues to attract young families and new businesses, one of the biggest HR challenges has been to help its employees balance their work/life priorities. “People don’t come to work and put their problems aside. The [problems] stay on their minds during the day,” says Donald E. Walsh, personnel director. “Anything we can do to help resolve them is to our benefit.”

In that context, the city’s personnel department has received the Workforce Magazine Optimas Award in the Quality of Life category for several employee-friendly initiatives. The impressive part is that its quality-of-life benefits have withstood the impact of major cutbacks. Moreover, the city can claim no layoffs (well, maybe one) since 1991 — even though 504 jobs have been eliminated. Through its Work/Family Connections program, HR established flexible reimbursement accounts (FLEXRAP) for health care and dependent care. It also instituted the Workplace Skills and Literacy Program for its basic skills-seeking employees, established a customized preretirement education program for young and older employees, and adopted a residency requirement for top-level managers and sworn police and fire employees. As a result, the city’s workforce is more productive and empowered to improve the quality of life for its 1.2 million citizens. Outside observers agree.

“The Phoenix Personnel Department is one of the leaders and innovators in public-sector human resources management,” says Neil Reichenberg, executive director of Alexandria, Virginia-based International Personnel Management Association (IPMA). The majority of 1,500 IPMA member agencies, he says, don’t offer preretirement education, and only 16 percent offer any literacy programs, he says. “Phoenix’s work/life programs should serve as models for other public [entities].”

FLEXRAP saves employees money — and anxiety.
One of the biggest issues for today’s employees is health-care expenses. Worries over family matters often clash with responsibilities at work. Recognizing this issue, the City of Phoenix created a variety of programs that offer solutions to employees’ concerns. Among them is the flexible reimbursement account program called FLEXRAP. The program is especially significant for public entities because it saves taxpayer dollars by reducing employer payroll taxes. It also helps employees pay for health-related and child-care expenses with tax-free dollars — thereby reducing out-of-pocket expenses and enhancing the insurance plan design.

FLEXRAP was created in the late ’80s and was driven by HR because city officials and managers realized many health-care expenses aren’t covered by health insurance. In addition, the city’s employees were paying a considerable amount of money each year for child-care and elder-care expenses. By expanding its employee benefits program to include FLEXRAP, employees now are saving money and watching their pay stretch even further. HR also empowers its workers by safeguarding their livelihoods and addressing the basic skills of those on the bottom rung.

HR avoids layoffs and promotes literacy.
Although a growing city, Phoenix didn’t escape the reality of job eliminations. Rather than abandon its employees, the city not only held vacancies, but retrained all threatened employees since 1991 into different jobs, according to Vickie Bauer, special assistant to the personnel director. Out of 504 employees, 42 chose early retirement and the rest were placed in other positions. Most jobs that were eliminated ranged from managerial, administrative positions to heavy-equipment drivers. The new jobs included vacancies that had been previously frozen: secretarial positions, research analysts and building services personnel. When Bauer’s position as a training coordinator for the police department was eliminated, she was moved to her current position. “Our [commitment] pays dividends today,” says Walsh. “Our employees witnessed the loyalty of employer to employee. It impacted their morale.”

At the same time, the city’s HR department also initiated an extensive literacy program in 1988. It began as a pilot program in the Public Works Department, in response to a citywide training needs analysis. The report revealed that many long-term employees weren’t promotable due to their lack of basic skills.

Walsh says the literacy program is one of his proudest efforts. After a decade, 830 employees from 13 different departments have participated in the Literacy Volunteers of Maricopa County (LVMC) program. It’s not simply a training issue. It’s one that improves the quality of life for employees — personally and professionally, he believes. The city, therefore, invested $10,000 in LVMC, which enabled 57 city employees to attend an 80-hour program during fiscal year 1996-97.

Based on its success, the program has received national attention. In 1996 it was selected as a semifinalist in the Harvard Business School’s Innovation in American Government Awards Program. Fewer than 6 percent of applicants for the award advance to the semifinalist selection round.

In addition to encouraging employees to improve their education, HR also encourages planning ahead. Because the city’s diverse workforce comprises young, single, married and aging employees, financial planning for tomorrow takes place today.

Retirement education for young and old.
Many companies and organizations offer retirement education. But the City of Phoenix has gone a step further. HR customized three different programs to assist employees in making wise financial and legal decisions: Successful Retirement Planning for employees in the 36 to 54 age group; Planning Your Tomorrows for employees in the 55 and older age group who will be retiring within five years; and Choices and Decisions for those retiring in the current year. Spouses are welcome, but they must be registered with the employee. Free classes are conducted on Saturday. Says Chris Goldsmith, senior consultant and group/health-care practice leader at Watson Wyatt & Company in Phoenix: “We applaud the city’s effort to provide retirement planning. With baby boomers reaching age 50 every eight seconds, it’s critical for them to save and to invest appropriately now.”

Within the last two years, approximately 1,200 employees have participated in the program, which was designed in its current format in 1992, according to Bauer. HR set up the classes to target specific groups because employees were in different stages of life. In the Successful Retirement Planning class, participants learn about setting goals, life insurance, IRAs, wills and power of attorney. In the two-day program Planning Your Tomorrows (for those 55 and older), employees learn information about the city’s retirement program, social security, financial planning, tax and health information. And for those about to retire, they can attend classes that review deferred compensation distribution, and medical and dental insurance issues, plus a review of forms necessary for retirement.

Indeed, when it comes to improving customer service, the City of Phoenix will consider anything innovative that benefits its citizens, even to the point of requiring sworn public safety employees, key executives and managers to live in the city. Says Kathleen Stigmon, a former compensation manager at Waterbury, Vermont-based Ben and Jerry’s Homemade Inc. and a current Phoenix resident: “My son is two years old, and I feel pretty safe here. The fact that the city has a [residency requirement] is a good thing.”

Since the City of Phoenix implemented the residency requirement in June 1996, 115 sworn police and fire employees and 30 middle managers had been subject to the rule change, according to Bauer. Individuals, she adds, need to be interested in the economics and growth of the city, should contribute toward the social climate of the city and be taxpayers of Phoenix. Having public safety employees residing in Phoenix neighborhoods not only makes Phoenix a safer place to live, but through their off-duty interactions, these employees have an opportunity to foster support for police and fire activities.

So the next time you hear Phoenix is hot, just say, “Cool!”

Workforce, February 1998, Vol. 77, No. 2, pp. 72-76.