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HomeMy WebLinkAbout04/03/2001, C6 - FLEET MANAGEMENT AND MAINTENANCE REVIEW council M°G"°a j acEn6a nEpont l 6 CITY OF SAN LUIS OBISPO FROM: Mike McCluskey,Director of Public Works SUBJECT: Fleet Management and Maintenance Review CAO RECOMMENDATION: Authorize a contract with Spectrum Consultants, Inc. to perform an analysis of the City's Equipment Management and Maintenance practices DISCUSSION Ba . ogr and In the everyday workings of the City, much attention is focused on major capital projects or private development projects. But intemally the City has many functions that keep it a well-oiled and smooth functioning entity. In an effort to enhance the City's efficiency and effectiveness, the City prepares master plans like the Information Technology Master Plan or the Pavement Management Plan. In addition, included among the Council's adopted "Budget and Fiscal Policies" is a Productivity policy that includes, among other things, that the City will perform "periodic formal reviews of operations on a systematic, ongoing basis" (1999-01 Financial Plan, page B-22). In recent years, the Council has shown an interest in our approach to fleet management and vehicle purchases. Staff concurs with this interest and recommends this examination. Study Recommendation Fleet management (equipment management and maintenance) is a division of Public Works that has not hada comprehensive review in a number of years. During the early 90's there was a major push nationwide to make sure that government fleet management was competitive with the private sector. As a result a number of cities eliminated their personnel and contracted out that portion of the city's services. Other cities found their internal services to be competitive and no layoffs took place. San Luis Obispo performed that analysis in 1993 and as a result incorporated police fleet management into the City from the private sector. However that analysis did not review the entire fleet operation, size of fleet versus number of personnel, levels and types of personnel needed to maintain the quantity of fleet vehicles; size and appropriateness of fleet maintenance facilities and many other items needed to assure an optimum fleet management. Spectrum Consultants, Inc. of San Diego, California is a highly recommended firm that specializes in the review of government fleet management organizations. Other firms are available but are located on the east coast and are considered too far away to be responsive to our needs for timing and efficiency. Thus Spectrum is being considered for a sole source award. The Scope of Work is attached and is quite comprehensive. When complete, this Review will give staff the needed information to remain competitive with the private sector and assure our own internal customers of the highest levels of vehicle maintenance and customer service. 0 J Council Agenda Report-Fleet Management and Maintenance Review Page 2 FISCAL IMPACT Staff is proposing to pay for this study with contract services funding from accounts within the department's budget. There will be no additional expense to the General Fund Reserves. The cost of the study is $22,954. While not inexpensive, this will be a very detailed review of an area involving millions of dollars in City assets. To put the price into perspective, a single City vehicle typically costs more than the recommended study - and often many times more, depending upon its' nature. ALTERNATIVES The study could be deferred until later. However, staff has been trying to achieve this type of study for some time to insure that the City is well benchmarked against other cities and the private sector. No study could be performed. We could decide that benchmarking would be a time wasting effort and that any internal performance issues could be evaluated by customer satisfaction surveys. Staff feels that this will not give us the necessary tools to assure that we are kept on the cutting edge of excellent performance. Attachments No. 1: Scope of Work for Fleet Management and Maintenance Review A Copy of the Proposal/contract is available in the Council reading file. Iadmin/car/fleet management study attachment no. 1 scope of wouk equipment ana maintenance 0eview Task 1: Review the Competitiveness of the City of San Luis Obispo Equipment Maintenance Program Organization Fleet budget data will be consolidated into activity cost centers that enable the calculation of standard measures of performance for comparison purposes. This will assist in determining the cost competitiveness of each service in order to evaluate the efficiency of the services. These standard measures of performance include: A fully burdened mechanic labor rate for the preventive maintenance and repair program. • A percentage surcharge or markup on the purchase price of fuel. • A percentage surcharge or markup on the purchase price of parts. Analyze mechanic efficiency, productivity, effectiveness, repair task outsourcing for maintenance and repair services such as tires, etc. and competitiveness of fleet maintenance services. Several sources will be used to evaluate and compare the cost competitiveness of the City `s fleet maintenance services. They include: • Comparison of City fleet costs with local area private maintenance providers • Comparison of City fleet costs with well run fleets for similar-sized and California fleets. Determine the cost competitiveness of each fleet service in order to evaluate services that require improvement in order to be competitive with the best fleets in the industry. Task 2: Review the City `s fleet management practices against the best practices in the industry to insure productivity,efficiency and effectiveness The City wishes to compare its existing fleet management practices, policies and plans against the best practices in the fleet management and transportation industry. Key City personnel (City Administrative Officer,Finance Director, Director of Human Resources, and stakeholders such as the Utilities Director,Police Chief, and Fire Chief, will be interviewed to ascertain current practices and/or concerns (presently, the Fire Department maintains its own specialty vehicles). C6 3 Areas that should be addressed are as follows: Review and Evaluate Current Issues, Problems, Opportunities Review and evaluate current issues,problems and opportunities discussed with City officials and make recommendations as to how these needs can be addressed and included in an action plan for a competitive fleet program. Review and Evaluate Authority, Organization and Customer Issues Review and evaluate potential improvements in fleet management policy and procedures as the basis for an effective fleet management program; organization of the fleet function; and, customer service as a basis for improving fleet services to City departments. Review and Evaluate Fleet Asset Management Issues Review the use of centralized fleet management practices; issues of fleet utilization of the fleet; the assignment of vehicles and the use of management techniques to control it-, the use of centralized motor pools,private rental services; replacement policy and options for replacing vehicles. Review and Evaluate Fleet Services Program Review the preventive maintenance and repair program; shop operations; maintenance operations productivity; parts inventory control and parts services; fuel systems; the use of management systems and performance measures as management tools; and, the use of contracting out/consolidation of services. Make recommendations for productivity or efficiency improvements through use of different equipment and technology, training, operating policies and procedures. Determine whether the-quality and quantity of services provided by the Department are appropriate. Identify performance indicators that should be used by the Department on an ongoing basis to evaluate efficiency and effectiveness. Review Preventive Maintenance and Repair Program Investigate preventive maintenance program content, intervals, scheduling, compliance,pre-trip inspection and defect reporting requirements,warranty management, repair authorization, scheduling, assignment procedures, mechanic supervision and quality assurance. Review Compliance with Environmental Regulations Review environmental regulations pertaining to compliance, storage, recycling and runoff to storm drains. Advise on the appropriate response to these issues as well as incorporating the cleanest production of fleet services in future planning and expenditure programs. r-. i Evaluate the Use of Information Technology and its Contribution to Further Enhancement. of the Fleet Management Program Review the use of existing technology and fleet management information systems and make recommendations for state-of-the-an practices and procedures in fleet management. Answer the question: Is the City's FASTER system adequate?:Should the City replace it? What technology should the City be using? What reports should be utilized on an ongoing basis for upper level management to ensure quality and program control? Examine Rate and Chargeback Structure Should the City be charging back for the use of its vehicle fleet?Review the current system to ensure that all fleet costs, including City indirect cost allocations, are accounted for and recovered. Assess the current system and recommend any changes in methodologies (such as rental rate) and a process that maximizes input from City fleet customers. Recommend any cost accounting changes that will better meet the objectives of the City and encourage fleet customers to use resources efficiently and influences fleet maintenance to meet a market cost standard for its services. Examine how the City handles charging back customers for accidents, damage, abuse,misuse and other losses. Evaluate Current Criteria and Procedures for Fleet Replacements Evaluate the current vehicle and equipment replacement process, replacement cycling policy and procedures and financing methods and philosophy of the City's replacement program. Should the City be purchasing one-year old rental vehicles? State Purchasing Program vehicles? What size vehicles are appropriate? Review and Recommend Appropriate and Competitive Staffing and Job Descriptions Review staffing and job descriptions (including job specifications) issues pertaining to staffing the fleet function with the current size of fleet and considerations for growth using data provided by the City pertaining to services growth projections. Issues could include but not be limited to: levels of technicians, use of high involvement employee work teams to improve production, training and incentives to ensure the City has a properly trained work force; appropriate match of employee skill level to task. Evaluate the management organization to determine if the structure and positions are adequate for its operational needs. In performing staffing analysis of fleet maintenance operations, items that we consider in the analysis include: • Repair tasks that should be contracted out • Over and under aggressive preventive maintenance schedules c � -S • Age of equipment • Use of extended warranty programs • Comparisons with other public and private fleets • Mechanic to vehicle ratios used in the industry and in managed competition and outsourcing contracts won in the past year • Review of actual repair task data and mechanic productive time • Administrative overhead needed to operate the shop • Authority over the management of the fleet • Degree of centralization of fleet.administration • Work requirements of the fleet • Population, climate and geographic location • Variety of equipment, including the feasibility of alternative fuels • Frequency of equipment use • Degree of equipment standardization • Facility layout and appropriateness • Use of fleet availability and shop performance standards to minimize the number of the most expensive vehicles and equipment • Use of customer service standards and priority systems Make recommendations for new and/or modified job descriptions. Task 3: Recommendations Report Spectrum will make recommendations that will improve the City's fleet management program and permit implementation of"best in class" fleet operations for the City of San Luis Obispo. Clay of san LUIS ompo 990 Palm Street San Luis Obispo,CA 93401 AGREEMENT THIS AGREEMENT is made and entered into in the City of San Luis Obispo on this day of April, 2001, by and between the CITY OF SAN LUIS OBISPO, a municipal corporation, hereinafter referred to as City,and Spectrum Consultants,Inc.,hereinafter referred to as Contractor. WITNESSETH: WHEREAS,on April 3, 2001, City Council of the City of San Luis Obispo found a specific need to retain this specific contractor for the specific purpose of reviewing the City's Fleet Management operations and policies. WHEREAS,this Contractor submitted a proposal that was accepted and approved by City for said project. NOW THEREFORE, in consideration of their mutual promises, obligations, and covenants hereinafter contained,the parties hereto agree as follows: 1. TERM. The term of this Agreement shall be from the date of this Agreement is made and entered, as first written above,until acceptance or completion of said project. 2. INCORPORATION BY REFERENCE. Contractor's proposal dated February 13, 2001, is hereby incorporated in and made a part of this Agreement. 3. CITY'S OBLIGATIONS. For providing consultant services as specified in this Agreement, City will pay and Contractor shall receive compensation in a total sum not to exceed$22,954.00. 4. CONTRACTOR'S OBLIGATIONS. For and in consideration of the payments and agreements hereinbefore mentioned to be made, and performed by City,Contractor agrees with City to do everything required by this Agreement and the said proposal made a part of this Agreement. 5. AMENDMENTS. Any amendment, modification, or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the Council or City Administrative Officer of the City. 6. COMPLETE AGREEMENT. This written Agreement, including all writings .specifically incorporated herein by reference, shall constitute the complete agreement between the parties hereto. No oral agreement, understanding, or representation not reduced to writing and specifically incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding, or representation be binding upon the parties hereto. 7. NOTICE.. All written notices to the parties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows: City City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo,CA 93401 Contractor [ ] 8. AUTHORITY TO EXECUTE AGREEMENT. Both City and Contractor do covenant that each individual executing this agreement on behalf of each party is a person duly authorized and empowered to execute Agreements for such party. IN WITNESS WHEREOF, the.parties hereto have caused this instrument to be executed the day and year first above written. ATTEST: CITY OF SAN LUIS OBISPO,A Municipal Corporation By: City Clerk Mayor APPROVED AS TO FORM: CONTRACTOR By: Cit At ey � I INSURANCE REQUIREMENTS: Consultant Services ''g e s;k `�.- '".y, '•�'",. ��,^� cv,;r y:X -6S°�i �.f F;,r� =1 - `a y The Contractor shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Contractor, its agents, representatives,employees, or subcontractors. Minimum Scope of Insurance. Coverage shall be at.least as broad as: I. Insurance Services Office Commercial General Liability coverage(occurrence form CG 0001). 2. Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code I (any auto). 3. Workers'Compensation insurance as required by the State of California and Employers Liability Insurance. 4. Errors and Omissions Liability insurance as appropriate to the consultant's profession. Minimum Limits of Insurance. Contractor shall maintain limits no less than: 1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage. 3. Employer's Liability: $1,000,000 per accident for bodily injury or disease. 4. Errors and Omissions Liability: $1,000,000 per occurrence. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees and volunteers; or the Contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. . Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be endorsed to contain,the following provisions:. 1. The City, its officers, officials,employees,agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Contractor; products and completed operations of the Contractor, premises owned, occupied or used by the Contractor; or automobiles owned, leased, hired or borrowed by the Contractor. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, official,employees,agents or volunteers. 2. For any claims related to this project, the Contractor's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, .its officers, officials, employees, agents or volunteers shall be excess of the Contractor's insurance and shall not contribute with it. 3. Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees, agents or volunteers. 4. The Contractor's insurance shall apply separately to each insured against whom claim is made or suit is brought,except with respect to the limits of the insurer's liability. 5. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the City. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than ANLL Verification of Coverage. Contractor shall furnish the City with a certificate of insurance showing maintenance of the required insurance coverage. Original endorsements effecting general liability and automobile liability coverage required by this clause must also be provided. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before work commences.