Department of Administrative Services Agency Review

PROJECT GATEWAY

Submitted to Governor-elect Spencer J. Cox, Lt. Governor-elect Deidre M. Henderson, and the Project Gateway leadership team

Prepared & Submitted by:

● Ally Isom (Chair) ● Palmer DePaulis ● Paul McKinnon

Transmittal Note

This transmission memo includes recommendations from a Project Gateway team for the Cox-Henderson gubernatorial transition. The ideas, recommendations, and insights are presented for discussion purposes only and do not represent the policies of the new administration. The information does, however, provide valuable insights from a talented and committed group of volunteers. Each idea, recommendation, and insight can inform leadership decisions about state government in the coming years.

Submitted December 7, 2020

COX/HENDERSON TRANSITION TEAM DEPT. of ADMINISTRATIVE SERVICES Project Gateway / [email protected] 12.8.20

COMMITTEE MEMBERS Ally Isom, chair Chief Strategy & Marketing Officer for EVŌQ nano, former deputy chief of staff to UT Governor Gary R. Herbert, former UT Dept. of Community & Culture deputy director, former UT Dept. of Workforce Services government affairs director Palmer DePaulis Retired, former executive director of UT Dept. of Human Services and UT Dept. of Community & Culture, former chief of staff to UT Attorney General Jan Graham, former commissioner at Utah State Tax Commission, 31st mayor of Salt Lake City Paul McKinnon Senior Lecturer at Harvard Business School, former Citigroup Head of Human Resources and Talent Management, former Dell Sr. VP of the Human Resources Group, leadership development practice at three management consulting firms

ASSIGNMENT / SCOPE OF COMMITTEE REVIEW This committee was assembled by the Cox/Henderson Transition Team as part of the Gateway Project. We were tasked with reviewing the UT Dept. of Administrative Services, with a focus on operational efficiencies, personnel, and broader policy issues. We reviewed provided agency documentation, met with DAS executive director Tani Downing, and spoke with a number of key stakeholders and staff. As instructed, we summarize findings in short-form below. Note: This committee also reviewed the UT Dept. of Human Resource Management.

MATERIALS REVIEWED ● DAS response to agency review questionnaire, 48 pages ● DAS high level personnel and organizational charts ● DAS.Utah.gov

STAKEHOLDER CONVERSATIONS ● Rich Amon, former DAS Deputy, Board of Regents ● Kristen Cox, former executive director GOMB and DWS ● Steve Cuthbert, DAS, former GOMB and DWS ● John Dougall, State Auditor ● Tani Downing, DAS executive director ● Mike Haddon, Corrections executive director ● Marcie Handy, former assistant state comptroller, DAS ● Gary Harter, executive director, Veterans and Military Affairs ● Val Oveson, former Lt. Governor, former DAS executive director ● John Nixon, former executive director GOPB ● Brian Wikle, Legislative Fiscal Analyst ASSESSMENT OF FINDINGS

Overview

With 485 employees, seven divisions, and a $778m budget, DAS is a mission-driven, forward-thinking, solution-oriented, and employee-empowered agency. DAS operations are funded primarily through dedicated credits collected by internal service fund (ISF) or Special Revenue Fund agencies, as well as General Fund monies appropriated by the Legislature. The DAS response to the Transition Team’s questionnaire (hereafter referred to as the agency’s report) was well-constructed and thorough. It detailed numerous accomplishments and a proactive approach to tackling problems, offering few areas for constructive improvement. DAS leadership actively seeks feedback from agencies, stakeholders, partners, and frontline staff to better understand what is happening in programs and to improve overall service delivery.

Agency mission

DAS is clear about its mission and ensures staff understand it by incorporating key strategic elements into individual performance plans. Those strategic elements include: o Vision: Create Powerfully o Mission: Create innovative solutions to transform government services o Values: Responsive. Proactive. Predictive. o Four Foundational Pillars: ● A "Create Powerfully" Culture ● Responsible Stewardship ● People Development ● Clean Air and Energy Efficiency

The DAS mission is expressed in various ways throughout its report. “DAS quietly empowers the mission of each state agency by providing necessary supportive services. We value our role as a trusted partner to each agency and to the Governor’s Office, and we are committed to continue creating new solutions, removing constraints, and offering more flexibility to allow agencies to respond to the changing needs of their customers” (p.7)

DAS’ memorable vision statement, originating in 2017, is “Create Powerfully.” Leaders want all DAS staff to realize they have power to solve problems and create opportunity. More detail about the four foundational pillars may be found in the report, but principles that stand out include honoring the private sector’s ability to provide some services faster and for less, developing staff leadership capacity, and modeling earth-friendly decisions.

Key operational findings

Department-wide ● Operational areas done well: efficiency, communication, problem-solving, purchasing, risk management, agency advocacy. ● With no recent third-party opinion survey, the agency solicits input from employees and receives high marks. ● A strong cultural identity for innovation and success, with a focus on “creating solutions powerfully and proactively” to benefit the people of Utah. ● General agreement the department is managing the enormous and, at-times politically challenging, prison construction project well. ● DAS partnered with the Governor’s Office to pilot a small telework model to create jobs in rural Utah. ● DAS acknowledges that funding constraints have made routine programmatic audits unfeasible. This could be an early warning sign. ● When DAS moved to a telework model in March 2020, it established initial employee and program performance metrics and continues to refine them over time. ● Another impactful recent change is the agency’s ability to run all major systems and secure processes remotely. Again, from the DAS report: “Necessity is the mother of invention and with the help and patience of DTS, we figured out ways to overcome the security issues, digitize paper processes, and provide critical services in ways we hadn’t considered before. These successes have energized us to look at all of our services through a new paradigm. The world may never be quite the same again” p.18). ● DAS considers some areas to be underfunded, including Finance, Archives and Records Service, Risk Management, and Fleet.

● DAS is committed to collecting and optimizing “actionable data.” “For every piece of published data, we ask ‘Is this data actionable? Is it needed to change a behavior? Does it inform important decision-making? Does it provide insight necessary to act?’" (p. 34). Archives and Records Service

● The Division of Archives and Records Service continues state efforts to digitize public records and meet growing public demand. Some stakeholders expressed concern that digitization efforts remain underfunded and will not meet growing public demand.

Facilities Construction & Management

● The Division of Facilities and Construction Management (DFCM) advances a paradigm of assessing the total cost of owning and maintaining a building over its lifetime, to ensure maximum value. ● DFCM’s efforts toward a State Master Plan will be critical in a post-pandemic world, where better teleworking data will enable more thorough analysis about true facility needs. It is critical that other major stakeholders, like the Utah State Legislature, counties and municipalities, are included in this planning. ● DFCM has implemented a different approach to new building/renovation projects. Rather than a construction project manager leading the team, a team consisting of a project manager, a maintenance specialist and an energy professional work together to make the very best and cost-effective decisions for the entire life cycle of the building. This is important, as it should lead to lower costs and better efficiency and should be actively monitored.

Finance

● DAS receives very little federal money (about $40k) and works to help other agencies optimize their federal and state allocations. ● Stakeholders consistently express serious concern about the need to increase agility, accuracy, and inter-agency synergy, instead of mere security and compliance. There is an urgent need to upgrade technology to do so. Fleet Operations

● The pandemic has significantly increased teleworking and consequently fleet utilization has dropped. Fleet is looking for opportunities to decentralize and downsize its operations and provide better service. Purchasing & General Services

● The Division of Purchasing pioneered a procurement process with Amazon, accelerating delivery times and reducing costs. The positive relationship with Amazon resulted in Utah being white-listed with the retail giant, enabling the state to purchase directly from overseas suppliers, avoiding price-gouging during the pandemic and ensuring Utah could access timely and steady personal protective equipment supplies.

● DAS has formed agency and public-private partnerships to advance clean-air solutions and “green purchasing” practices. ● The Division of Purchasing is revamping processes to limit agency inclinations to prescribe solutions in an RFP and working to invite innovative private sector thinking and solutions. Purchasing’s approach is the right approach: “Let's let the vendors use their very best thinking to bring options to us so we can make more informed decisions." Several stakeholders applauded this move as well. Risk Management

● The Division of Risk Management is improving its data analytics skills so they can “more proactively respond to risk, trends, and opportunities” (p. 11). ● One noteworthy example of proactive anticipation of future need and public stewardship: Risk Management used money available through retained earnings and purchased a relatively small parametric policy to cover the premium on a broader property policy through an excess carrier. On March 18, 2020, a 5.7 magnitude earthquake hit the Salt Lake Valley, causing approximately $60 million in damages to state-owned buildings. The parametric policy paid “approximately $963,000 within 30 days. That payment covered most of the $1 million quake deductible for our excess carrier property policy—a policy that will ultimately pay out $59 million” (p. 14). Administrative Rules

● Administrative rules determine how agencies will execute federal and state legislation in their purview and can occasionally become a flashpoint for public controversy. The Governor’s staff should be intentional and thorough in working with agencies and legislators on rules.

People of the Agency

DAS values its people and empowers them with a paradigm of continual process improvement and accountability. ● Leadership — Executive Director Tani Downing is a seasoned leader in state government. Prior to her position in Administrative Services, she worked in Risk Management, as Governor Huntsman’s legal counsel, and as executive director of the UT Dept. of Workforce Services. Ms. Downing has utilized a sound organizational strategic framework to provide both structure and discipline for the DAS workforce. She is recognized by stakeholders, her peers and her team as a uniquely capable leader. Open and sincere, she engages employees to promote “big picture” vision and proactive solutions for the agencies and Utahns they serve. Consistent with her approach to purposeful communication, she also regularly sits with employees, distributes a weekly email, and solicits staff feedback on her leadership performance. Ms. Downing’s vision and steady hand, coupled with her proactive paradigm for innovation, provide a sound foundation for further improvements and partnerships. ● Management — The executive director and deputy directors, Ken Hansen and Marilee Richins, work together well. Their team is cohesive and responsive, facilitating a positive mindset and innovative organizational culture. They meet weekly with each division director and focus on an agenda driven by that division’s leadership and needs. Their efforts to meet with each building’s maintenance team to listen intently to better understand previously unaddressed issues is representative of the kind of workforce engagement and empathy practiced by the executive team.

● Workforce —Morale is good overall, turnover is low and, while resources are tight, the department achieves good results. FY2020’s turnover rate of 13% seemed high initially, but can be partially explained by seasonal changes with maintenance staff and grounds crews. DAS divisions routinely solicit employee survey feedback, while also practicing greater active listening. It may be especially important for DAS to survey employees in the throes of the pandemic and teleworking to detect any problems and capture success metrics. The department is not overstaffed. Public perception

While DAS typically escapes much public scrutiny, its current oversight for the funding, design, and construction of Utah’s new correctional facility in northwest Salt Lake City has invited significant news media attention. So has the COVID-19 pandemic and Utah’s response. In the instance of the prison, stakeholders applaud DAS transparency and proactive engagement of journalists. While there remains some criticism around the prison move, overall, DAS’ informational, open strategy proved valuable in inoculating criticism and general misinformation. Since the pandemic will persist well into 2021, public and media scrutiny over the State’s response will persist as well. Every effort should be made to be transparent and forthright with all key stakeholders, especially elected officials in other arenas. A basic communication principle should be followed: Over-communicate in times of crisis. And don’t stop until the crisis is well past. ● Brand—-The Department of Administrative Services serves other agencies of state government and, as such, it is not as visible to the public. The agency understands that. From its report to the transition team: “While the client base for most State agencies is taxpayers, the primary customers for the Department of Administrative Services are state agencies, institutions of higher education, public education, local government entities, and the public.” The department’s mantra, “Create powerfully and proactively,” aligns with agency priorities and stakeholder perception of the department. DAS is known for being proactive and innovating solutions. • It should be noted here that a brand exists in the minds of an audience. It is not something the agency creates; rather, brand is the culmination of experiences an audience has with the agency. Every cultural touchpoint—every point of interaction-- shapes the DAS brand. That doesn’t seem readily understood in the DAS report. Brand is more than perception and more than reputation. • DAS does a good job of paying attention to those touchpoints. Good brand strategy reflects empathy for priority audiences. It speaks in a language that demonstrates understanding. Much of DAS’ public and partner communication, while on strategy for the department’s needs, falls a bit short of demonstrating empathy for its audience needs. • The department should be encouraged to adjust its well-crafted written and digital communication to sound less clinical or institutional, and more personal, emanating empathy for the core needs of its key audiences. (example: elevate

the visibility of public services a customer needs, rather than the people who participate on a committee [see https://das.utah.gov/transparency-advisory-board/]). ● Customer satisfaction——Stakeholders universally agree that DAS satisfies their needs and requests, and, when problems inevitably arise, DAS engages them until a solution is developed. DAS leadership encourages employees to find a way to “YES”—i.e., find solutions that meet customer agency needs and be a problem-solver, rather than a roadblock. One way DAS might improve customer interface is to streamline customer navigation on its website. Some links take a customer to a division page with inconsistent headers.

OPERATIONAL RECOMMENDATIONS

1. Augment teleworking as a sustained statewide solution with clear metrics and defined outcomes, while ensuring resource optimization, IT security, coordination, and morale. 2. Seek funding for upgrading aging Finance technology. 3. Solicit employee feedback on all dimensions of telework, from logistics to team synergy, and morale to work-life balance. 4. Continue to review and renegotiate state cooperative purchasing contracts to encourage the purchase of more sustainable, clean air-friendly commodities. 5. Consider opportunities to decentralize and downsize desk space and building space, due to sustained teleworking. 6. Continue working on a package of policies to improve air quality by decentralizing and reducing fleet, transitioning to electric vehicles, building charging stations, renegotiating contracts for renovation or construction to reduce the adverse effect of using certain products in buildings, and requiring tier 3 engines. 7. Implement building practices that go beyond net-zero and actually generate clean power. 8. Simplify Finance processes by reducing or eliminating government forms and implementing payment kiosks and varied electronic transaction platforms (e.g., Venmo, Apple Pay, and Pay Pal). 9. Find ways to more fully protect the State and its assets from vulnerabilities, potential threats, and disaster (agency report, p. 18). Reassess all liability insurance coverage for natural disasters, seek more reinsurance, and seek new ways to reduce the state’s liability. 10. Create a “State Masterplan” to right-size DFCM space requirements to accommodate more teleworking. 11. Re-examine the role and function of the State Building Board to determine if the process is adequately resourced and balanced to reduce any potential for political influence. 12. Digitize more records to reduce demand on State Archives. 13. Work with the Legislature to create statutory clarity where there is persistent ambiguity regarding the overlapping roles of the Dept. of Heritage and Arts and the Division of State Archives. 14. Reduce the time an IT procurement takes by enabling private sector innovation to identify solutions, rather than pre-supposing or prescribing a solution through the RFP. 15. Employ bots in a centralized data system to reduce human error and costs and increase efficiency and speed. 16. Improve coordination between DHRM’s onboarding process and Finance to accelerate onboarding and limit programmatic and service disruptions. 17. Improve leadership capabilities for all management employees and aspiring managers.

18. Require and fund outside third-party audits of DAS operations to improve efficiencies and identify best practices. 19. Preserve models, metrics, and outcomes from the Herbert administration’s Operational Excellence efforts driven by GOMB. Gather longitudinal data and identify what is working and what is not. 20. End reporting of early Operational Excellence goals and report only on current and new goals. 21. Create an enterprise project management team with world-class expertise and technology to assist all agencies or find a feasible private sector solution.

REQUESTED POLICY RECOMMENDATIONS 1. Improve equity, diversity, and inclusion within state government and the State of Utah. The emphasis on diversity and inclusion should come directly from the Governor-elect. The Governor-elect should prepare to make a policy statement early in his tenure about the importance of diversity in hiring practices and in career development. If he makes this policy personal and part of his leadership of the state, the cabinet and all state agencies will take his lead and model his example. 2. Complement strategic economic growth, improve service delivery, involve rural communities, and enhance public health. In 2018, at the request of Lieutenant Governor Cox who wanted to increase job opportunities in rural Utah, DAS piloted a Telework Program to make jobs more accessible in rural Utah, contribute to cleaner air and a better environment, reduce the need for additional buildings, increase the state’s ability to recruit and retain high value employees and increase employee productivity and program outcomes. This was envisioned as an effort to stimulate strategic economic growth and improve service delivery, while also providing jobs in rural communities. The teleworking pilot was eventually adopted by the state and fortunately has helped to prepare state workers and management for the COVID-19 pandemic that would send a majority of state workers home to work in 2020. We recommend this program be significantly expanded and augmented for state employees, both in rural and urban areas. 3. Goals and Initiatives • Election Day to Inauguration The Governor-Elect should make a public statement about diversity and inclusion for state government and the State of Utah. This statement would set the tone of his administration for inclusivity and diversity. It would send a message that all would prosper in the state with economic potential for every community. • First 200 days Consideration of Consolidation Issues * Prepare and initiate a strategic planning process with consistent messaging and communication for a likely move of DHRM under DAS * Emphasize enlarging DHRM’s mission from compliance to broadly improving employee training, career development and upward mobility * Include deep dive studies and pilot solutions to articulate practices/protocols to address and reduce unintentional forms of inequality * Create a space for synergy and experimentation to deal with compensation issues, e.g., using attrition to reduce headcount and use the money to raise pay or create incentives Finance * Seek funding to upgrade aging Division of Finance technology * Simplify Finance processes by reducing or eliminating government forms and implementing payment kiosks and varied electronic transaction platforms (e.g., Venmo, Apple Pay and Pay Pal

* Employ bots in a centralized data system to reduce human error and costs and increase efficiency and speed * Improve coordination between DHRM’s onboarding process and Finance to accelerate onboarding and limit programmatic and service reductions • First Year Expand and Strengthen Teleworking * Create a “State Masterplan” to right-size DFCM space requirements to accommodate more teleworking * Augment teleworking as a sustained solution with clear metrics and defined outcomes, while ensuring resource optimization, IT security, coordination, and morale * Solicit employee feedback on all dimensions of telework from logistics to team synergy, morale and work-life balance Clean Air * Continue to review and renegotiate state cooperative purchasing contracts to encourage the purchase of more sustainable, clean air-friendly commodities * Continue working to reduce and decentralize fleet, transitioning to electric vehicles, building charging stations, and using tier 3 engines * Implement building practices that go beyond net-zero and actually generate power Operational Excellence * Preserve models, metrics and outcomes from the Herbert administration’s Operational Excellence efforts driven by GOMB, then gather longitudinal data and identify what is working and what is not * End reporting of early Operational Excellence goals and report only on current and new goals • Second Year Private Sector Involvement * Continue IT procurement by enabling private sector innovation to identify solutions, rather than pre-supposing or prescribing a solution through an RFP * Create an enterprise project management team with world-class expertise and technology to assist all agencies or find a feasible private sector solution * Require and fund outside third-party audits of DAS operations to improve efficiencies and identify best practices Liability * Find ways to more fully protect the state and its assets from vulnerabilities, potential threats and natural disaster * Seek more reinsurance and seek new ways to reduce the state’s liability

• Third Year State Archives / Heritage and Arts * Work with the legislature to create statutory clarity where there is persistent ambiguity regarding the overlapping roles of the Department of Heritage and Arts and the Division of State Archives • Requested recommendation for name of new consolidated agency The agency could retain its current name, the Department of Administrative Services, but that maintains the status quo and potentially causes some employees to fear loss of importance or visibility in a consolidation scenario. It might be advantageous to provide a new name for the consolidated department, rebranding it as a new department that will proactively seek innovative strategies, timely opportunities and creative ways to share services—a place that values employees, agencies and stakeholders. A possible name change could be the Department of Shared Services.