HomeMy WebLinkAbout07/19/2011, SS4 - PUBLIC WORKS DEPARTMENT ASSESSMENT C')
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July 19, 2011
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CITY O F SAN LU I S OBI SPO
FROM: Jay D. Walter, Director of Public Works
SUBJECT: PUBLIC WORKS DEPARTMENT ASSESSMENT
RECOMMENDATION
Receive and file the 2011 Public Works Department Assessment Report and provide feedback on
process as well as scope of the assessment so that the approach can be modified for future
assessments.
REPORT IN BRIEF
In 2010-11, the City conducted an organizational and management analysis of the Public Works
Department through the use of a consultant. The consultant evaluated the Public Works
department for its core services, organizational and management structure, outsourcing and
insourcing opportunities, current operations, technology, best management practices and future
trends. The final report includes an extensive and thorough review of the Pubic Works
Department for current practices and was accompanied by 301 recommendations which either
identify opportunities for improvement in operations and economic efficiency or practical
opportunities for enhancing the quality of the products or services the Department provides. The
final Organizational Assessment report was provided to Council in May 2011. Attached to the
report is a summary version of the implementation action plan. Staff is seeking Council feedback
on the process and scope of the assessment so that future assessments can incorporate necessary
changes.
DISCUSSION
Background
In 2010-11, the City conducted an organizational and management analysis of the Public Works
Department through the use of a consultant. In October 2010, after comparing sixteen proposals
and conducting interviews with several consultants, Matrix Consulting.Group was awarded the
contract to provide the in-depth review and organizational assessment. As part of the scope of
services, it was anticipated that the consultant would provide final recommendations of
improvements for existing and future operations, staffing, and service levels for the department.
Matrix was selected over other applicants because of their extensive experience with Public
Works departments across the country, and the belief that they would be able to assist the
department in determining the areas of strength and areas for improvement along with
recommendations for delivering services in the best way possible for the City.
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2011 Public Works Department Assessment Page 2
The following areas were evaluated by the consultant and supported with either a
recommendation for a change in practice or to continue with current practices.
• Identification of core and priority services
• Current organizational &management structure
• Outsourcing/insourcing opportunities
• Current operations
• Use of technology
• Public Works industry best management practices
• Future trend analysis
• Customer service performance
The consultant conducted numerous interviews with staff from Public Works and other City
departments, the Council, and other external stakeholders that have worked extensively with
Public Works. An employee survey was conducted (See Chapter 16 of the assessment) to gauge
the feelings of the employees about their working conditions and gain their observations about
department operations and areas for improvement. In addition, the consultant requested and
received volumes of data from each of the divisions regarding their operations, assets, budget,
and staffing levels in order to evaluate the department.
The final draft of the Organizational Assessment report is now complete and was provided to
Council in May. The final report includes an extensive and thorough review of the Public Works
Department for current practices and is accompanied by 301 recommendations which either
identify opportunities for improvement in operations and economic efficiency or practical
opportunities for enhancing the quality of the products or services the Department provides.
Staff has evaluated the assessment recommendations and developed a comprehensive
implementation plan that will take place over the next several years. At this point, staff is seeking
Council feedback on the process and scope of the assessment to ensure that future management
assessments meet the Council's expectations.
Steering Committee Approach
In order to guide the assessment, the department formed a Steering Committee made up of
managers and line employees representing the various divisions along with representation from
City Administration. The Steering Committee met on a regular basis throughout the project and
was the primary reviewer of the consultant's work products. The Steering Committee members
included:
Jay Walter—Public Works Director
Barbara Lynch—Deputy Director Public Works (City Engineer)
Tim Bochum—Deputy Director Public Works
Gary Keavney—Streets Supervisor
Bob Bishop—Engineering Inspector 3
Meg Evans—Parks Maintenance Worker 3
Bill Humphrey—Parking Coordinator
Andrea Montes—Supervising Administrative Assistant
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2011 Public Works Department Assessment Page 3
Melissa Mudgett—Public Works Analyst
Michael Codron—Assistant City Manager
In addition, the City Manager met with the Steering Committee on a number of occasions,
providing valuable insight from her previous experience with the department assessment process
at other municipalities.
Overall, the Department is encouraged by the outcome of the Assessment. The consultant
identified a number of Best Practices that the Department employs and made numerous
recommendations in all areas of the organization intended to assist the department in taking its
"game" to the next level. Many of the recommendations involve formalizing existing processes
regarding maintenance management planning and asset management so that the department of
the future has a road map to follow and the organizational memory can be preserved for the next
generation of department workers and leaders. The consultant recommendations also rely heavily
on the implementation of Energov software as the City and department's primary asset.
management tool. Since that part of the Energov package has not yet begun development or
deployment, which is expected in Spring 2012, implementation of those recommendations can be
coordinated with system development and deployment will be deferred until the system is in
place and operational.
Agenda for Change
The assessment identified 301 recommendations that the consultant believed would provide the
basis for improvement in the Public Works Department over the next several years. The
consultant's recommendations were categorized into a six point agenda for change, as outlined
below.
I. Accountability
2. Asset Management
3. Maintenance Management
4. Administrative and Management Structure
5. Preventative Maintenance of Infrastructure
6. Cost Effective Service Delivery
Accountability is the driving force behind any high performing organization. The consultant..
believes that systems and structures that improve accountability are needed to provide clear
direction that translates into action. The department has begun the effort to provide this direction
with the planned deployment of EnerGov as an asset management system. The department will
strive to utilize available resources efficiently and effectively, while redirecting resources to
invest in the maintenance and preservation of the City's infrastructure. Some examples of the
consultant's recommendations in this area include: improving customer service by developing
service level standards which will drive accountability to the public and other City departments
including standards for all divisions and programs. The consultant also recommended that the
department develop a five year strategic plan to provide direction, create additional service level
agreements that describe what services are provided to other City departments which will
formalize existing relationships and eliminate uncertainties, and improve Capital Improvement
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Plan project management by revising how the City delivers smaller projects to help keep costs to
a minimum and find more cost efficient ways to deliver projects using contract resources.
Asset Management focuses on the facts about infrastructure assets; asset performance;
preservation, and their anticipated longevity. The consultant believes that effective asset
management is critical in identifying aging infrastructure, providing funding for asset renewal or
rehabilitation, and reducing risk and liability associated with aging infrastructure. The
Department will continue to improve its asset management practices to utilize accurate asset
information to enable decisions regarding conditions, performance and other needs with a long-
term view of the preservation and renewal of these assets.
A key too] for this purpose will be the deployment of Energov. Some examples of the
consultant's recommendations in this area include: developing and getting Council approval of
an asset management policy where they do not currently exist, creating an inventory of all
infrastructure assets (Streets, Parks, Facilities, Trees, Fleet) and their condition, determining
appropriate replacement times based on a 5 year capital improvement plan cycle, and advocating
for funding of infrastructure needs. In addition, the consultant was concerned that appropriate
levels of funding are not being provided for the renewal and rehabilitation of the critical
infrastructure maintained by the Department. Maximizing resources within the context of the
City's "new normal" of reduced or flat resources white inventory gets older or increases will be a
critical challenge for the Department for the foreseeable future.
Maintenance Management systems have become important tools for public agencies as
materials costs continue to increase and revenues become scarcer. The consultant believes that
effective maintenance management is defined as a systematic approach to getting more work
done within the dollars available. The department continues to work on alleviating the strain of
increased inventory and reduced resources by making more effective and efficient use of existing
resources. One such effort to this end is the deployment of Energov. However, deploying the
software is just the beginning as the true measure of such a management tool is the quality of the
data collected, input and maintained for it. This will require both financial and human resource
allocation to accomplish. Some examples of the consultant's recommendations in this area
include: developing a complete list of all work activities in the maintenance divisions,
determining the levels-of-service to be provided in maintaining the assets, taking into
consideration the Council's and the community's priorities, establishing workload standards
(what needs to be done, how often, etc.), creating a formal annual work program, and reporting
progress on an annual basis.
Administrative and Management Structure was evaluated by the consultant, looking at the
plan of organization from a number of vantage points including, resource utilization,
communication and coordination, agility and flexibility, staffing capacity and clarity of
accountability. The consultant believes that streamlining of the administrative and management
organization will reduce the administrative overhead given the spans of control in the divisions.
Some examples of the consultant's recommendations in this area include: elimination of a
supervisory position in the Parks/Urban Forest division (already implemented as part of the
2011-13 Financial Plan), long term consideration of transferring the fleet maintenance
responsibility from the Fire Department to Public Works, and the future combination of the
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2011 Public Works Department Assessment Page 5
Facilities Maintenance and Fleet Maintenance..Supervisor positions. The consultant also
recommends evaluating the consolidation of the Public Works and Utilities departments to assess
the potential of realizing efficiencies and cost savings.
A significant recommendation made by the consultant is that the City should evaluate the
consolidation of the Public Works and Utilities Departments during 2011-12. The Directors of
the Public Works, Utilities, and Human Resources Departments and the Assistant City Manager
are collaborating on a project plan to determine the process and timeline to evaluate and analyze
the consolidation option which will be done concurrently but independently of the
implementation of the other recommendations. The consultant believes that there may be a
number of advantages realized through this consolidation, including concentrating asset
management, better CIP coordination, enhanced accountability, administrative cost / overhead
reduction, better sharing of scarce resources, flexibility to meet shifting workload demands, and
standardizing administrative practices.
The decision to separate the Utilities Division from Public Works and make it a separate Utilities
Department was made in 1989. At that time there were a number of sound reasons to make that
split, and the analysis needs to include a discussion about whether those reasons are still valid as
well as considering other factors the consultant has suggested. Another factor in the analysis will
be to consider the impact to the current operations and whether the advantages outweigh the
disadvantages. This will represent a significant workload for each of the departments as well as
for the Human Resources Director and City Manager's office. In order to undertake this
comprehensive analysis a project plan has been envisioned and will be followed. Significant
collaboration and input from staff will be sought and considered in making the advisability of
consolidating the departments. Once this assessment is complete, staff will report the outcome to
the Council.
Infrastructure Maintenance represents a significant portion of the City's investment in streets,
sidewalks, traffic signals, signs, storm water collection systems, parks, the urban forest, facilities,
etc., that the community of San Luis Obispo has entrusted to us. The consultant believes that the
primary objective of an effective Preventative Maintenance program is to preserve these assets,
prolong their useful life, and reduce the long-term maintenance and rehabilitation costs.
Preventative maintenance also improves an asset's operating efficiency, prevents premature
replacement, and avoids disruption in services to residents. The department has been making
significant efforts to ensure the preventative maintenance of City infrastructure and assets, but a
more coordinated and comprehensive effort is needed. Some examples of the consultant's,
recommendations in this area include development of the following: a long term CIP plan which
includes project needs from the Streets, Parks, and Facilities divisions, a five year minor capital
plan for each maintenance division to prioritize and document improvement needs, and formal
preventative maintenance programs for various systems including HVAC, signal controllers,
roofs, etc.
Cost Effective Service Delivery remains a challenge going forward during tough economic
times. The consultant identified a number of challenges facing the department, including fiscal
limitations and decaying infrastructure. The consultant believes that staff needs to research and
evaluate opportunities to respond to these challenges, by introducing competition into service
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delivery and installing accountability systems to achieve results. Staff will be working to assess
the costs of service delivery and seek opportunities to reduce costs and increase productivity by
examining the way services are delivered. Some examples of the consultant's recommendations
in this area include: evaluating managed competition as a way to maintain or decrease costs for
services in the Streets Maintenance and Parks Maintenance divisions, seeking efficiencies by
sharing engineering resources between divisions when there is a decrease in workload, and
reducing the size of the City fleet by eliminating or pooling underutilized vehicles, and more
carefully scrutinizing planned replacements before recommending purchases.
Managed competition is a structured, transparent process that allows public sector employees to
be openly and fairly compared with private sector firms for the right to deliver services. This
strategy recognizes the high quality and potential of public sector employees, and seeks to tap
their creativity, experience and resourcefulness by giving them the opportunity to structure the
organization and ways similar to best practices in private businesses. Staff will be doing research
and analyzing where this method of delivering services has been used and creating a plan for how
the City might utilize it.
Implementation Strategy
Staff has evaluated the consultant's 301 recommendations and developed a preliminary
implementation plan for improvement. This implementation plan identifies a timeline for
opportunities to improve operations, customer service, and manage effectiveness within the
department. The implementation plan will prioritize work efforts and provide the Department
with a clear and strategic direction for the future. Staff will be preparing detailed implementation
plans and timelines for more complex individual recommendations during the next couple of
months.
Of the 301 recommendations proposed by the consultant, 61 (or 20%) have been indentified as a
current practice; that is, have already been completed or are ongoing. Fifty one (17%) of the
recommendations have been identified as easy to implement, with a very limited increase in
available resources, and can be implemented within the next six months. A little less than half of
those recommendations would be implemented by staff in a slightly different manner still
recognizing the intent of the recommendation while working within the City's operational
framework.
Assessment Recommendations
Completed/Ongoing 61 20%
Short-term(w/in 6 Months) 51 17%
Long-term(w/in 2 Years) 143 48%
Longer-Term(>2 Years) 31 10%
Not Recommended 15 5%
TOTAL 301 100%
A significant number (143, or 48%) of the proposed recommendations have been determined by
staff as feasible, but requiring a 2 year implementation schedule. These recommendations will
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2011 Public Works Department Assessment Page -
need additional research and in some circumstances, cost analysis, prior to implementation.
Should the analysis of these recommendations show them to provide efficiencies and cost
savings, staff believes implementation could occur within the next two years. Thirty one
recommendations (10%) are considered longer term implementation goals. Some of these
identify organizational efficiencies that can be gained through attrition or other staff changes like
retirement or separation that have no timeline. Less than a quarter of those recommendations
would be implemented by staff in a slightly different manner. Staff has categorized these
recommendations as longer-term, more than two years, and will consider their implementation as
opportunities present themselves.
Lastly, fifteen of the proposed recommendations (5%) are not recommended by staff. These
recommendations were identified by staff as presenting a significant increase to service delivery
costs, adding to the complexity of tasks or posing a potentially considerable reduction in current
service levels. An example of these is a recommendation that the Parking Services Manager
should develop a capital improvement program budget request for fiscal year 2012-13 to convert
the parking meter locks to high security locks. The Parking Manager has reviewed this
recommendation and determined the costs of the locks would be significantly higher than the
small security benefit they provide. No security issue exists today, and the expense is not
recommended. Another example is the recommendation that the department should develop its
own employee safety handbook. The City currently utilizes a city-wide approach to safety, and a
coordinated effort through the Human Resources Department provides a safety policy and
handbook. The department believes.that safety is being adequately addressed with the current
approach.
Ultimately, the detailed implementation plan will provide the tool for staff to continue to
evaluate, implement and provide ongoing reviews of the 286 accepted recommendations. Status
updates will be provided to the City Manager quarterly and as part of the Department's annual
report to Council.
CONCURRENCES
City Manager, Katie Lichtig, and the Assistant City Manager, Michael Codron, have been an
integral part of the Assessment Steering Committee; have evaluated the Assessment Report
provided by Matrix Consulting Group and worked with staff in developing the implementation
strategy. Other departments that are affected by recommendations in the report have been
consulted and understand their staff will be involved in the father evaluation or implementation
of these recommendations.
FISCAL IMPACT
The primary objective of the Public Works Department Assessment was to provide a
comprehensive analysis of the department's existing operations, infrastructure management,
service and staffing levels. The Assessment, prepared by the consultant, provided 301
recommendations to address or improve these key areas. Staff will continue to evaluate and
research each recommendation to determine and track the cost savings associated with each. The
department included several of the consultant recommendations for cost savings during the 2011-
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2011 Public Works Department Assessment Page 8
13 budget process, including eliminating the Parks/Urban Forestry Supervisor, and reducing the
amount of irrigation water used in City Parks on an annual basis. The total amount of these and
other savings identified has been estimated at $143,200.
The intent of the Preservation of Fiscal Health Major Council Goal is to implement
recommendations and achieve a minimal Return-on-Investment (ROI) of 3:1 over the project
cost. This ROI target would account for cost savings measures totaling $100,000. Other costs
associated with the assessment implementation will be determined and more fully refined before
returning to Council with a request for funding.
Available in the Council Reading File:
Public Works Department Assessment
Summary version of the Implementation Action Plan
T:\Council Agenda Reports\Public Works CAR\201 RPW Admin\Matrix Assessment\CAR PW Assessment 071911 Final.doc
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council memoizanbum
July 19, 2011
TO: City Council RED FILE
FROM: Jay D. Walter, Public Works Dir ctor MEETING AGENDA
VIA: Katie Lichtig, City Manager DATE ITEM #Lf2�—'
SUBJECT: Red File Item SS-4
Council Member Smith asked staff to provide a list of increased cost items from the department
assessment which Public Works staff included in the 2011-13 Financial Plan. Here they are:
Recommendation 21 —Increase Arborists salary: $12,800. This is actually taken from savings
realized by eliminating the PW Supervisor position,thus no net increase in operating costs.
Recommendation 214—Contract Engineer for Traffic: $111,700. This is actually a position
which had been funded before the assessment, and the consultant agreed that it was still needed,
thus no net increase in operating costs.
The other recommendations that include cost increases will be evaluated and considered(if
needed) at a future budget opportunity.
File pathG:\Staff-Reports-Agendas-Minutes\_CCMemos\20I I\Assessment Costs.doc
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council mcmomnbum
July 18, 2011
TO: City Council RED FILE
- MEETING AGENDA
FROM: Jay D. Walter, Public Works Director PATE! l ITEM #-29S
VIA: Katie Lichtig, City Manager
SUBJECT: Red File Item SS4
Mayor Marx asked staff to provide a list of cost saving ideas from the department
assessment which Public Works staff included as reduction options in the 2011-13
Financial Plan. Here they are:
Recommendation 20 — Eliminate the PW Supervisor position and vehicle: $59,000
Recommendation 64 — Reduce the use of irrigated water in City parks: $50,000
Recommendation 105— Reduce contract for HVAC maintenance: $15,900
Recommendation 179— Reduce Dev Rev engineering staff assistance: $18,300
Total Operating budget savings implemented: $143,200
In addition, staff performed an extensive review of the City's fleet assets in preparation
for the 2011-13 CIP and identified $70,000 in savings, consistent with the intent of
Recommendation 81 — Reduce the size of the City fleet.
Total savings implemented: $213,200
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