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HomeMy WebLinkAbout0199.092I 1 , - __ ~ _____ ~..,.. 'f •• HONORABLE CIT¥ COUNCIL Palo Alto, California This report is for information purposes only~ No council action is required. Information is provided below which summarizes the: first Budget Division departmental revie¥l process, provides a sUl!Ur,aryof findings from the analysis of the Public iliorks (General Fund) Department, and proposes a future departmental review workplan. S&elr:gr_9Un~ The first city of Palo Alto ~wo-year budget was implemen~ed with the 1990-92 budget. ~he City adopted a two year process to allow for ltlore in-depth analysis of departmental operaticms in the interim, or "off year~, which the timeframe of the regular budget process does not permit. As a result, an abbreviated ninterim'" budget process was adopted for the off year to allow budget staff to review either one large or t~o smaller departments' operations, staffing levels, cost recovery, use of contract services, and other progra"'ro. issu.es. Finance Depu-rtment Budget Division staff has completed an a~aly5is of the ~Jblic Works Department. A summary of findings is provided in the nResults~ section. Staff tizne available for the public works analysis 'Was approximate­ ly 5 to 6 months. That is bacause, outside of preparation of the operating budget and capital improvement program, Budget staff time is divided bet~cen ongoing budget monitoring responsibilities and CMR:199:92 11""1. - ",,; .. special projects. Onq~ing monitoring includes financial reporting (midyedr and year-end reports and year-end audit responsibilities}, 'WhU.e special projects requiring i!lnalytical support included the Fire ,Station Relocation Cost Analysis, ~anaging a con$ult~nt study of the City's fleet size, performing an internal critique of the budget process and ~udget document and providi~g staff support to the Finance Committee's Appropriate Le.vels of serv-ice process. Additional tiwe was required during the first departmental analysis to del inc the scope of the revie.... and methodo logy before: staff beqan fialdwork~ Methodology and scope will need to be redefined each time a department is reviewed, because each department is structured cifferently and has a different mission r and because. info~ation needs as defined by Council and th~ Managerrs Office change over time. Purpose. soope, and Hethodology of t~e Review This informaticn is summarized in CMR:200:91, "Depart!!',enta.l Revielo1' Workplan"~ dated March 21, 1991 (attached). R.sults and Reeo~en~ation5 of the Review Field wor-k and analysis by Budget Division staff resulted in detailed internal reports to the City Manag~r's Office that described tt .. e curre1!t 'Work practices of the Publ ic Works Department and reco1!'llD:ended i:mprovelllents~ Many of the recommendations fell into the category of internal management and supervision p~actices. Those issues have been resolved internally .... ith the department. A~ditional recommendations discussed below fall into three catego­ rles: o Efficiency/cost savings recommendations o Priol:'it.izing of services/service delivery and scheduling issues o Control i~sues Efficiency/cost savi_ngs recommendations ~> The City could save in the range of $56,000 to $112,000 .annually by changing to all c')ntract custodian services. Contract custodian services in 1990-91 cost $.19 per $quare foot whil.? in-house custodial costs ... ere $.42 per square foot. There is a difference in the type of facility covered by contract, and total savir,gs will depend orl the lsvel of contract monitoring required by public works staff. Thi 5 recommendation "Will be initiated in the 1992-93 year, as custodial staff 1s replaced through attrition. CMR:~99:92 - -r- --. --, -- 2} A temporary emploj'ee should be assigned to clean the garage re-.pair facility at the. Municipal Services Center (M-SC) and to pick up and deliver vehicles oetween cit:,· Hall a.nd the MSC~ .Fu~dinq for the employee ~ould come by reducing the depart­ .ment's contract vehicle repair budget. There is curre~tly a problem in the garaga with employee productivity related to 'WoI'"k-related injuries. Once the facility is at full staffing, productivity should improve and the J::lechanics should be able to handle garage cleanup~ At that time, the temporary employee could be eliminated and contract repair costs could remain at a reduced level. 3} The gar-age could cut costs in the future b~l developing a prici~9 structure which encourages departments themselves to pick up and deliver vehicles for repair. 4) PUblic Works' current pricing mechanism used to build up a fund for the future replacement ot the fleet 'Will be analyzed in t.."~ next six months by Finance staff. A revised methodolo­ gy foe charging out vehicle replacement costs ...,ill be devel­ oped, which takes into accour.t interest earned on Vehicle Replacement Fund cash ba)ances l and .... hich provides incentives for departments to retire vehicles from the fleet. S) Over the next. 6 to e month'S, P'..lDlic Wor}(s and Finance staff should jointly explore the feasibility of contracting out portions of the garage operation. 6) The employees who perf~~m concrete and asphalt ~ork for the Utilities Department should be tranSferred from the Operations Division to Utilities. This should sa .... e t.he General Fund a~ut $15,000 to $20,000 annually, representing that portion of salaries and. beJ'l_efits that are not currently charged to Utilities while sta~f are either sick or on vacation. This change will be included in the 1992-94 budget submittal. 7} The Public Works Operations Division should begin a plan~ing process t·:l implement generic 'Work classifications in the Operations Division in the 1993-94 budget. This will allow for more productivity While crew members are absent r in that existing crew could he shifted to priority '\Nork areas. with fewer classification lind tations. Successful iroplewentation of this recom7llendation will require the cooperation of the Human Resources Department and the Service Employees Inter­ national Union. Priori-tj,~i~ services/service de] iveL·Y_.....AnsI scheduling i'Ssl"l_~ l} lmproved methods of recording all requests for service snould be implemented so the operations Division .... ill realiz:e the full impact of service calls on staff time when planning CMR:199:92 L " \.", -'--". ,'--. I , .... L proactive work schedules. It is currently not clear to ~hat extent the Division is being diverted from its scheduled 'Work plan by service calls from the public that do not fit into high priority calls. 2) From an analysis of 'Itr,-ork logs of tree ere.' hours worked, it appears that productivity might bf" improved. A proact:ive ~ork plan should be developed/ imp:"emented and closely supervised to increase reg.;lar tree maintenance production. The tree program's work logs shDu1d be re-reviewed by the Finance Department in approximately six months in order to determine if the proactive work plan haG been i:mplemented and the number of service calls have been reduced. Work logs should be reviewed to determine if prod'..lctivity improvements have been. made in this area consistp.nt with established quality stan­ dards. 3) Based or. the results of this followup, a revieW" of ho'W to handle the City's park and off-street (i.e., library. Cu1tu~al center, etc.) tree program should be c~nducted. The city's park and off-street trees are currently maintained on a safety and complaint basis only, rather than being included in a proactive preventive maintenance sohedule. If work logs do not indicate that productive work hour~ have increased, then tree crews should be able to absorb the maintenance of p~rks and off-street trees into their current work responsibilities. If, on the other hand, productive Vvrk hours are accurately accounted for, augmented funding may be needed in the futUre. To assure that park trees are servic~d during this period, the city Manager ~ill recommend in the 1992-93 budget that approximately $50,000 be add~d to contract service_s for a one­ time augmentation, pending further review of work logs. control issue It is recommended that t~e Finance Department develop and implement an additional set of regular revie .. ' proced":Jres for those instances ~hen the cost of a vehicle requestad for replacement exceeds its replacement allocation, J"utur. Workplan The ne.xt de.partment scheduled for anal:fsis is Community Services. Work on the analysis will begin in October 1992, unless demands from the Organizational Review or the Finance Committee's priority of Palo Alto's Economic Future make a reassessment of the ~orkplan necessary~ Finance staff .... i11 revisit the Public Works analysis in six months, to ensure that follow-through has occurred on the recommendations made. CMR:199:92 4 'L , , • -: , Respectfully submitted, ,--~-t~~ ~ , JJ;k STEELE BUdget Ml3,nager r?--I d}u ,./::J OOLYpmrSON Director ?~~nce w~tL1 Q z.;..:~- City lanager Related Staff Reports: CMR;200:91 CMR:199:92 5 , .' , ;f~::,:,~ , .:;~;~~~<~: ~~~ ;-. - .-..... - ~". ~ ...... . " , . , , . . ~:" ,;: Marct. 21, 1991 HONORABLE CITY' COUNCIL Palo Alto, California Attention: Finance and public works Co~~ittee DBP ARTMEll"l'AJ.! 'RE\"xn WORKPLAli' This report is for information only. required~ NO council action is Report in Briet The purpose of this report is to present to Council the Finance Department. Budget Division's workplan for its first departmental review (Public Works Department) 4 It is being agendized tor further discussion by the Finance and ~ublic Works committee. Overview of Public Works Departmental Review PURPOS~; To evaluate operational performance in order to~ 1) realize operational efficiencies; and 2) END PROIlOCTB: 1) CMR:200:91 enhance service and effective:r.ess by making z'ecom­ mendations for operational improvements. The 1992-94 Public Works operating budget submittal will include recommendations that translate into dollar savings and/or service level improvements ~ithin current spending levels. • .- ~k¢'>i"\· :)f:;b<':\~~~;:i~" -.:<:-:-~ .. ;..;: ... _,;... __ .... ~. ""~r~......,, .~ __ - Otl'l'WIiBS : o 2) Budget and Public Worxs staff will york jointly on a presentation of the P~hlic Works budget to Coun­ cil in a manner which cl&rifies programs and the line items which support these programs. 3) A set of lIIeanir.gful performance measures will be devised with the cooperation of Public Works ... ·hieh 'Will link performance to the };,uQget for ongoing monitoring. These performance measures ",li11 be an integral part of the budget pr~sentation to Coun­ cil~ o A link between the budget, performance measures, programs~ and service delivery o A more thorough analysis of a large department G A model for future revie~s o Potential budget savings ASSIDiPTIORS: SCOPB. CMR: 200:91 The "off year" time period creates a ...... indow of oppor­ tunity to review programs ir. more d~pth than during the normal budget process4 The City gains from a periodiC manage~ent review ot its program expenditureS4 To review key areas of the General Fund Public Works budget. Budge programs to be reviewed include: o Building custodial and B'.lilding Maintenance o Street !-laint.enancE. o Traffic Conteol Maintenance o Sidewalk Maintenance o Tree Maintenance o Garage Operations Line items will be examined according to materiality and in the context of program reviews. Por example, office supplies within Equipment Management are not a material expense, while gasoline expenditures and auto parts are both material and tied into key ~rcgrams being reviewed. Note: Excluded are aciministr-ation programs and non­ genera! funded programs. Where utility funded programs 2 - a.re integrally linked to general fund programs, i.~., line clearing to tree maintenance, every atte~pt will be made to analyze them, time permitting. METHODOLOGY ~ Interview key management staff, review departmental documents, and observe work routines to: o compare 'Work performance against ir;ternal and external standards -work. quality delivery of services/llc'.lstomer" satisfaction -timeliness of services -cost of provic:-.ing services o appraise clarity of 'dork assignments, lines of ~uthority, and appropriate delegation o assess the effectiveness of internal controls to ensure resources are safeguarded o assess effectiveness and efficiency of in-hcuse vs~ contract services Hore detailed workplans by program area are attached. PUBLIC WORKS PERFORMANCE REVIEW: DETAIL OF PROGRAM .OBJECTIVES OBJECTrvES FOR EQOIPKENT MANAGEIIEN'l': 1) To appraise the clarity of work assignments, lines of authority, and appropriate delegation; assess the flow of information, adequate accountability, and current organization charts. CKR:200:91 o Receive and review current organization charts determine lines of authority -chart the flow of information o Evaluate the scheduling of work responsir,illty -criteria used to assign tasks -comparison of task to skill level -adaptability of schedule for the unexpected -ongoing certification of maintenance crev 3 "."·-··L···· . «." ,"' ~ "'" . " ~ , , .j ~ l I "1 i I I ""I j - 2) Assess the timel iness of quantity and quality of se deliverlng .-ices -number of productive hours per day appropriat'2 -n~r of staff to perform job versus standard -perforn:ancQ of staff to target schedule To evaluate the cOl!l.patibilit.y of management plar'+s to overall objectives; and to assess the effectiveness, efficiency and economy of alternative uses of resources (in-house versus contract). o Review service preventive maintenance program -stan~ards used compared to manufactu~ers' standards adherence and correction to those standards o Compare use of contract to in-house service -compare standards for in-ho'Use to contract service -in-house work versus contra~t work cost effectiveness -review work history for major repair categories and by classes of vehicles and alternatives used 3) To assess the effectiveness, efficiency and economy of established internal controls to ensure that appropriate goals and objectives are met; resr;urces are safeguarded, and laws and regulations are followed and dis~losed. CHR:2CO:91 o Analyze current performance standards -repair work (flat rate hook comparison) -ongoing monitoring and adherence -review standards against ar~~di perfo~~ance o Evaluate ~ork quality -maintenance history of vE:i.icles ~comeback· work rate -customer satisfaction (turnaround time) o Assess parts i.', ;.ntory control standards -consistency with stores ~ ~edures -inventory turnover rate parts ordering based on scheduled repair work -emergency parts replacement • "1 I o Analyze gasoline inventory control -beginning and ending inventory monitoring recordkeepinq -delivery procedures and safeguards review dispensing procedures -methods for detp.cting loes/leakage Tire repair and replaceraent program, ir.cl'"lcing inventory control OBJ8CTlVES YOR CUSTODIAL AND BUILDING MAINTENANCB: 1) To appraise th.e clarity of work assigr1ments,. lines of authority, ana appropriate delegation; asse9S the flow Qf il".formation, adequ~te accountability, and current organization charts. o Receive and review ClLt"rent organization charts determine lines of ~uthority chart the flow of information o Evaluate the scheduling of work responsibility -Criteria used to assign tasks -Comparison ~f task t~ skill level 2) To evaluate the compatibility of management plans to overall pbjectives; and to assess the effectiveness, efficiency and economy of alternative uses of resources (in-house versus contract). o Revie:w building maintenance schedule -scheduling of routine inspections -cri terla l:.sed. for sc11edllling -schedulinq emergency calls and special requests o Assess criteria to determine in-house or cont~act -security issues -compare cost effectiveness per unit of output 3) To asseS6 the effectiveness l efficiency and economy of established internal controls to ensure that appropriate goals and objectives are met; rEsources are safeguarded, and laws and regulations are fOllowed and disclosed. CMR:200:91 5 - o Review standards fer custodial service progra~ -standards used in-ho~se compared to contract -review of stand~rds agDinst actual perfor~ance -response time for sp~cial re~~ests o Ev;alu~te 'Work quality -ongving qualitf control monitoring and adherence -log of co~plajnts or special requests -customer satisfaction ~ith work performed o ~.alyze the use ot inspection checklists -verify use of list -review for adherence OBJECTIVES POR OPERATIONS: 1) To appraise t.,"le clarity of work assignments, lines of authority, and apprcpriate delegation. o Evaluate the scheduling of work responsibility -criteria used to Assign tasks setting of priorities -impact on schedule for emergencies 2) To evaluate the compatibility of management plans to overall objectives; and to assess the effectiveness, effici~ncy and economy of alternative uses of resour~es (in-house versus contract). o Review the preventative maintenance program for streets, side~alk, traffic control, and trees maintenance~ -determine priority ~or work et~ndards set for schedules and timelines 3) To assess the effectiveness, efficiency and economy of established internal controls to ensure that appropriate goals and objectives are met; resources are safeguarded, and laws and regulations are followed and disclosed. CMR: 200: 91 o Analyze current performance standards -all areas including contracts industry standards -ongoing monitoring and adherence -review standards against actual performance , j ! 'I 'I ·;. . . .. ', o Evalyate work quality -checklist to en~ure quality performance -contract monitoring I~it1al KicKoff Meeting with Finance Cirector, Budget Staff, Public Works Director & Administ~ato~, and PW Division Heads involved in audit -overview of audit scope and p~rpose -gathering of initial data Yebr~ary 5, 1991 FIELDWDRK 'February-late o Facilities Manage~ent o Operations o Equipment Management DRAFT FINDINGS TO PW COMMENTS BACK FROM PW Interim budget DRAFT REPORT 1'0 PW DRAFT REPORT TO CITY HGR, including ~~clic Works Comments WORK WITH PUBLIC WORKS TO lIAKE PRESENTATION TO COUNCIL ON DEPARTMENT WORK WITH PUBLIC WORKS TO INCORPORATE dECOMHENDED CHANGES INTO 1992-S4 BUDGET CMR:200:91 7 l.~ March Mid Apr-i! Mid May April-June Mid July Early August Fall 1991 Ongoing November 1991 Through April 1992 ~~~~ '".,-.- - ! i , Related Staff Reports: CMR~222 0 CMR:.lOJ 0 CMR: 160 91 CMR:200:91 8 ". '--.