HomeMy WebLinkAboutStaff Report 4128
City of Palo Alto (ID # 4128)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 12/3/2013
City of Palo Alto Page 1
Summary Title: Cost Saving Plan Modifications to the City's Street Sweeping
Program
Title: Cost Saving Plan That Would Reduce the Frequency to Every Other
Week for Street Sweeping in Residential/Light Commercial Areas and
Contracting Out the Palo Alto Stre et Sweeping Program
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that the Finance Committee:
1) Approve staff’s recommended street sweeping cost savings plan described
below; and
2) Direct staff to develop a Request for Proposals (RFP) and undertake a
procurement process that would confirm or adjust the cost estimates and
savings assumed in the plan. Following receipt and analysis of proposals,
staff would take any appropriate contract (or contracts) to Council for
approval along with a list of other recommended operational or budget
related actions.
Executive Summary
Staff is recommending a cost savings plan for the Street Sweeping Program as a
follow-up to ongoing discussions with the Finance Committee. The proposed cos t
savings plan consists of two parts. First, it would contract out non-specialized
components of the City’s Street Sweeping Program. Second, it would reduce the
frequency of sweeping in non-retail areas from weekly to once every-other-week
during the non-leaf season. The cost savings would help replenish the Refuse
Fund Reserves and mitigate future Refuse Rate increases for our residential and
commercial customers.
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As the first step, staff would develop a Request for Proposals (RFP) and undertake
a procurement process that would confirm or adjust the cost estimates for private
sector sweeping and savings assumed in this report’s preliminary analysis.
Following receipt and analysis of proposals, staff would take any appropriate
contract (or contracts) to Council for approval along with a list of other
recommended operational or budget related actions. Such contracts would
commence at the earliest beginning FY 2015.
Background
Within the last few years, due to increased operational costs, legacy costs and
long term liabilities, the City’s Refuse Fund has operated with a negative rate
stabilization reserve. During the FY 2013 Budget process, as part of a continuing
effort to lower costs, the Finance Committee requested that staff investigate
strategies that could reduce costs in the street sweeping program. This program
was a key area to consider cost savings, given that it constituted approximately
$2.2M of the $30M Refuse Budget and utilized approximately one-half of the full-
time staff positions in the Refuse Fund Budget.
In late 2012, staff analyzed the City’s street sweeping program costs and surveyed
several neighboring cities for relevant comparison information. The purpose of
the analysis was to evaluate whether the City’s street sweeping program’s costs
were in-line with other cities’ costs and to evaluate whether there were any
opportunities for modifying the City’s program to achieve savings. Staff also
solicited contractor costs by contacting street sweeping contractors who supplied
conceptual costs for the proposed work.
Staff then analyzed options based on service level assumptions and scenarios that
assumed contracting out part or all of the street sweeping operations. The
options all deal with the main portion of the street sweeping program that
involves large street sweepers working on regular routes. Staff targeted this
element of the program because this type of service is competitively provided by
the private sector. The other elements of the overall sweeping program are a
collection of smaller programs such as the cleaning of bike paths, dead ends,
parking lots, sidewalks etc. that are usually not provided by the private sector.
Further, staff believes that keeping a small in-house street sweeper contingent
will provide the highest service level for Palo Alto residents. Staff concluded that
significant savings could be realized if the City contracted out the main street
sweeping operation and reduced the frequency of sweeping during non–leaf
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season (typically March – October) to every other week in residential/light
commercial areas. In addition, staff also calculated the future long term
pension/health care costs for the street sweeper operator staff as approximately
$330,000 per year (for only the five City Street Sweeper Operators involved in the
main street sweeping operations). Public Works staff presented the information
to the Finance Committee in March 2013 (Staff Report ID #3483).
https://www.cityofpaloalto.org/civicax/filebank/documents/33508.
At the Finance Committee meeting in March 2013, staff discussed reducing the
frequency of street sweeping to every other week in residential/light commercial
areas during the non-leaf season and/or contracting out the main street sweeping
operation. The Finance Committee stated an interest in staff evaluating
contracting options that would go beyond the scenarios discussed by staff at the
March meeting.
The Finance Committee gave approval for staff’s next steps which were to finalize
the cost analysis and to run a pilot project that reduced frequency to every other
week in limited areas of the City during late spring through the end of summer to
determine the environmental impacts and to gauge public reaction. This pilot has
now been completed and the results are reported below and in Attachment A.
Discussion
The every other week sweeping pilot has been completed and has demonstrated
that the City can reduce the frequency of sweeping in the residential/light-
commercial areas to every other week during non-leaf season without adverse
impacts to the public or the environment (see Attachment A for pilot study data
and conclusions). In addition, in accordance with the Finance Committee’s
requests, staff has performed further analysis of the City’s program and has
concluded that the main street sweeping and debris management operations can
be contracted out providing significant savings to the City. Staff has developed a
preliminary cost savings plan and analysis as described below.
Recommended Street Sweeping Preliminary Cost Savings Plan – The concepts of
this plan are described in the table below. In summary, the City would contract
out the entire street sweeping and debris management operation except smaller
programs such as the cleaning of bike paths, dead ends, parking lots, sidewalks
etc. The City would also reduce the frequency of sweeping in residential/light
commercial areas during the non-leaf season. The Downtown/California Avenue
areas would continue to be swept three times per week by the contractor.
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Parking lots would continue to be swept weekly by City Staff.
Cost Savings Plan Concepts
1 Continue sweeping Downtown/California Avenue three (3) times per
week. Contract out this work.
2 Continue weekly cleaning of parking lots, bike paths, dead-ends and
downtown sidewalks. Continue using in-house staff and existing
contracts to complete this work.
3 Reduce sweeping frequency to every other week during non-leaf season
(except for Downtown/California Avenue areas).
4 Contract out the main street sweeping operation (i.e. all street sweeping
performed by the large sweepers).
5 Contract out materials management (i.e. hauling leaf litter/debris to
SMaRT).
6 Discontinue City Staff sweeping El Camino Real for CalTrans. Work
towards amending/modifying CalTrans agreement.
7 Manage emergency responses with both in-house and contractor
resources (traffic accidents, water main leaks, large rain events etc.).
Comparison - Staffing and Equipment Cost Savings Plan
Staff Current
Program
Contracted
Program
Staffing
Reduction
Lead Heavy Equipment
Operator
1 0 -1 FTE
Heavy Equipment
Operator
1 0 -1 FTE
Street Sweeper Operators 7 2 -5 FTE
Street Maintenance
Assistants
2 2 0
Total Staff 11 4 -7 FTE
Equipment Current
Program
Contracted
Program
Equipment
Reduction
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Large Street Sweepers 7 2 -5 large
sweepers
Parking Lot Sweeper 1 1 0
Large Leaf Trucks (for
picking up and hauling
debris)
2 0 -2 large trucks
Green Machines (small
sweepers used to clean
sidewalks and bike paths)
3 3 0
Small Dump Truck 1 1 0
Total Equipment 14 7 -7
This cost savings plan is being recommended because it will implement the most
cost effective solution to the refuse rate payers through a competitive
procurement process. Proposal pricing will be compared to the City’s operational
costs and the most advantageous proposal will be recommended for approval to
the City Council. The City would keep a core workgroup of City employees that
would continue sweeping sidewalks and parking lots and could respond to
emergency response events if a contractor could not respond in a timely manner.
Also, removal of the seven pieces of equipment from the City’s fleet would take
the pressure off of the City’s Equipment Management Operations. Street
Sweepers and the leaf trucks have intensive maintenance requirements because
of the complexities of these vehicles.
Also, it should be noted that the manager responsible for overseeing the street
sweeping program would still be needed to manage the street sweeping
contractor as well as continuing to supervise the Downtown Streets Team,
manage the traffic control maintenance crew, manage graffiti abatement, and
field calls from residents and downtown businesses.
If this cost savings plan is approved and if the preliminary cost savings are
confirmed through the competitive procurement process, then the Public Works
Department would need to:
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Restructure the sweeper program with remaining staff in an organization
structure that would make sense. Potential budget/personnel changes would
need to be implemented;
Signage – Staff would need to develop a new signage plan;
Staff would need to determine the best mix of resources (both contractor and
City) to respond to emergency responses. Staff is expecting to recommend
retaining 3 sweepers and 2 street sweeper operators for routine work (not
related to main street sweeping) and also for emergency response work –
traffic accidents, water main breaks, storm debris removal etc.;
Staff will include performance requirements into a contract with a sweeping
contractor including meeting storm water quality best management practices;
and
Staff would need to be cross-trained to back up the more limited sweeping
operations.
In addition, it should be noted that the City is a permit holder for stormwater
discharge along with 75 other Bay Area municipalities in the Municipal Regional
Stormwater Permit. This permit requires a long-term trash management plan be
submitted by February 1, 2014. Street sweeping is an effective trash control
measure that can reduce 80 to 99 percent of trash on the streets. Street
sweeping reduces sediments that may contain pollutants such as heavy metals
and removes leaves, which can have water quality impacts. Street sweeping also
impacts frequency of catch basin clean outs needed. Changes in the street
sweeping program will be coordinated with the development of the long-term
trash management plan to ensure continued compliance with the requirements
of the City’s permit.
Recommended Next Steps
If the Finance Committee agrees with this staff recommendation, then the next
steps would include staff developing a RFP and begin undertaking a procurement
process for contracting services. Following receipt and analysis of proposals, staff
will take any appropriate contract (or contracts) to Council for approval along
with a list of other recommended operational or budget related actions. Such
contracts would commence on or about August 31, 2014 and could be later,
depending on Council action.
Because this proposal involves contracting out work that has traditionally been
performed by SEIU bargaining unit members, the City will be required to meet
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and confer with SEIU to discuss alternatives and the impact of contracting out.
Staff has provided a copy of this report to SEIU representatives and plans to
provide the opportunity to meet prior to the receipt of proposals and/or after the
completion of the proposal evaluation process so that the City can consider any
potential alternatives proposed by SEIU.
Finally, it is important to note that staff’s recommendation is conceptual in nature
and that some or all of this plan implementation is contingent on the contractor
pricing as well as operational factors such as proper emergency response
coverage and ensuring that a contractor can perform the work in accordance with
the high standards that is being completed now as well as storm water permit
considerations.
Policy Implications
Approval of this RFP process does not represent any change to the existing policy.
Resource Impact
Potential cost savings will fluctuate based on pricing data received as a result of
the RFP. Based on current information available, the estimated cost savings for
contracting out the modified program are approximately $295,000 compared to
in-house resources. Given the current program configuration, the total estimated
program costs savings would be approximately $413,000. This amount reflects
the reduction of seven staff positions and the reduction of seven equipment
replacement and maintenance charges.
Annual Cost Comparisons (Main sweeping operation and debris hauling)
Item In-House Contracted Potential
Savings
Current Program Costs (Weekly
sweeping with in-house
resources)
$1,074,000 Not proposed N/A
Modified Program Costs (Every
other week sweeping in
residential/light commercial
areas during the non-leaf
season)
$956,000 $661,000 $295,000
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Potential Savings from Current Program Costs for
implementing both the modified program and contracting out $413,000
Annual costs represent preliminary estimates and may change. Savings related to
staffing reductions are based on FY 2015 Forecast salaries and benefits. Estimates
for equipment charges may change as fleet allocations are being developed as
part of the FY 2015 budget process. Not reflected in the table above, nor
quantified yet are savings to the Refuse Fund due to a reduction in General Fund
cost plan charges, potential changes to salary and benefits costs resulting from
ongoing labor negotiations, and future long term pension/health care costs. In
addition, impacts to the Vehicle Replacement and Maintenance Fund will be
analyzed further. The City would also realize an estimated one-time salvage value
of approximately $400,000 for the affected equipment.
Timeline
If approved, the next steps would be:
Develop a request for proposals - December 31, 2013
Proposals received and evaluated - March, 2014
Council Approval - May, 2014
Implementation - August 31, 2014
Environmental Review
The recommended action does not constitute a project under the California
Environmental Quality Act (CEQA).
Attachments:
Attachment A - Pilot Summary (DOCX)
4128 – Attachment A
Every-Other-Week Street Sweeping Pilot Project Report
City of Palo Alto, October 7, 2013
PURPOSE
The City conducted a Pilot project to test the feasibility of every-other-week street sweeping
service during the non-leaf season months of March thru September. The pilot program was
implemented to evaluate whether the City can save costs by reducing sweeping frequency
without significantly impacting residents or the environment.
DESCRIPTION
The pilot project was approved by the Finance Committee on March 19th, 2013, and was
conducted from May 13, through the end of September 2013. Weekly sweeping service returned
October 1st and is scheduled to continue during the leaf season months roughly (mid-October
through mid-February).
Pilot areas were chosen from current street sweeping routes with a mix of residential and light
commercial zones. The Pilot areas were spread out evenly throughout Palo Alto in order to get a
better understanding of the impacts of the service changes. All selected areas had standard Palo
Alto tree growth including deciduous trees that drop their leaves during the non-leaf season.
Operational needs were also considered when selecting areas, which allowed all sweeping staff
to participate in the Pilot equally. Additionally, areas with scheduled posted street sweeping
signage were not included so as not to disrupt the scheduled parking enforcement. A total of 25%
of all street sweeping routes were chosen for the Pilot Program
The downtown areas of University and California Avenue and their surrounding streets were not
included in this pilot project because they are not being considered for street sweeping reductions
in the future.
RESULTS
Because of the reduced sweeping during the Pilot program, City Operations used approximately
18% less fuel sweeping streets than during the same time period in 2012. Staff were also able to
spend 800 hours performing “other than sweeping” tasks. In the 4.5 months of every-other-week
sweeping, Staff received a total of 20 calls from residents in regards to the Pilot Program, 5 of
the calls were received prior to the Pilot beginning with concerns that the reduced frequency of
sweeping wouldn’t work. Of the 15 remaining calls (during the pilot), only 5 residents said that
there were too many leaves in the street in front of their home and the 10 remaining calls were
from residents voicing their opinion that bi-weekly sweeping was a bad idea in general and that it
would lead to too many leaves in the street and possible flooding.
CONCLUSION
While every-other-week sweeping does allow for debris to collect for a longer period of time in
the streets (compared to weekly sweeping), the street sweeping staff were still able to complete
their routes without having to work longer hours or make extra passes. Staff did not observe
extra debris in the catch basins. Staff did not receive any calls that necessitated extra or “make-
up” sweeping. In conclusion, the Pilot program did not have a significant environmental impact
4128 – Attachment A
in the areas where the Pilot was implemented and Staff believes that the Pilot program was
successful in that it shows us no reasons for concern when decreasing the sweeping frequency
from once every week to once every two weeks during the non-leaf season.
Street Sweeping Pilot Project Calendar
Pilot participants’ streets were swept every-other-week. Below is the calendar that was provided
to help residents remember their street sweeping day.
Indicates Street Sweeping Week For All Pilot Neighborhood Routes
May
S M T W T F S
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31
June
S M T W T F S
1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30
July
S M T W T F S
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31
August
S M T W T F S
1 2 3
4 5 6 7 8 9 10
4128 – Attachment A
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31
September
S M T W T F S
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30
Every-Other-Week Street Sweeping Pilot Routes Map