MOTOR VEHICLE OPERATIONS

Transcription

1 EXECUTIVE SERVICE CORPS A Division of ZERO-BASED MANAGEMENT REVIEW OF THE CITY OF SAN DIEGO S MOTOR VEHICLE OPERATIONS September 1995 A Report by Nonprofit Management Solutions/Executive Service Corps For the City Manager and City Council Select Committee for Government Efficiency and Fiscal Reform

2 Motor Vehicle Operations of the City Of San Diego ZERO-BASED MANAGEMENT REVIEW Directed by LINC WARD, Zero Based Management Review Coordinator of the Mayor's Change 2 Committee and Select Committee on Government Reform Coordinated by Nonprofit Management Solutions (formerly Support Center/Executive Service Corps) Performed by Volunteer Citizens ROBERT SCHWARTZ, Programs Manager (retired), Hughes RANDY PARKER, Service Director, Bob Baker Ford This review was performed -- with the endorsement of City Manager Jack McGrory with the enthusiastic support of George Loveland, Acting Deputy City Manager -- the able assistance of Ernie Anderson, Acting Director of Financial Management -- and with the open cooperation of Tomas Carlos, Deputy Director, Equipment Division, General Services and his staff.

3 INTRODUCTION This 5-year Zero-Based Management Review effort is coordinated by Nonprofit Management Solutions (Support Center/Executive Service Corps) which recruits, trains and supports citizen teams of volunteer consultants who conduct the departmental systems assessments. A typical assignment involves the recruitment of community volunteer management skill appropriate for each analysis. A kick-off meeting by the City Manager, Linc Ward of the Change 2 Committee, the two-person study team, and appropriate levels of management in the operations to be reviewed is held - to create a level of understanding and support for the citizen team effort. The team spends about 6 half-day sessions in the field, assessing from a macro management stand point. The reviews focus on operations to determine answers to the following question guides: Is this work function consistent with City goals and direction. SHOULD IT BE DONE AT ALL? Is this work function consistent with other related functions? CAN THIS FUNCTION BE DONE ELSEWHERE AND POSSIBLY PRIVATIZED? Is this work function (and its related functions) being done in an effective and efficient manner? IS IT BEING DONE IN THE REASONABLY BEST WAY? At the end of their efforts, the citizen review team prepares and delivers a report for the local management staff, the City Manager, the Mayor's Change 2 Committee, and the Select Committee on Government Reform. The Select Committee meets monthly with Change 2 and the City Manager to assess implementation progress on these volunteer citizen consultant reports and recommendations. PROJECT COORDINATION Nonprofit Management Solutions (NMS) is a volunteer-driven and client-centered management assistance community resource. Its purpose is to provide public benefit organizations in the San Diego region cities, nonprofit agencies, etc. with high quality management assistance through extremely cost-effective consulting and training programs and services. The volunteer consultant corps recruited by NMS is comprised of recently retired and semi-retired individuals, as well as loaned executives and working professionals

4 representing a broad range of private and public sector business background. All have demonstrated a commitment to management effectiveness and an ability to contribute through their knowledge, experience and expertise. NMS has build a significant track record of high quality service to public and private nonprofit institutions and organizations in the greater San Diego region. Clients have included the City of San Diego, San Diego Historical Society, Museum of Man, Urban League, etc.

5 REVIEW CONDUCTED JULY - SEPTEMBER 1995 OVERVIEW: The current process for oversight and administration of the overall motor vehicle fleet is too decentralized, lacks cohesiveness and overall control. The City has too many vehicles in its fleet. Management controls/job performance standards currently are inadequate. Productivity of the maintenance functions is currently non-competitive. Under current practices, the Equipment Division cannot compete with outside vendors. There is cohesion in the detailed recommendations which follow. Thus, the basic recommendations should be implemented in total. Senior management and union must be participants in and supporters of the overall changes. In 1996 budget, savings in the magnitude of $11 million will be achieved by the City if team recommendations are implemented. Many cannot be achieved without reassignment of responsibility in City operations. Over a five-year period the savings to the City versus the current ongoing cumulated level of expense is sizable. 1

6 DETAILED RECOMMENDATIONS: 1. Yearly Usage Goals: The basic operational fleet (this review did not include police or fire departments) of about 2,200 vehicles is underutilized. Yearly usage goals are set too low (7,000 miles). They should be realistically set at almost double that level (12,000 miles). Compact cars: 48% have less than 4,000 miles of annual usage; almost 24% has less than 1,000 miles. Small Pick-ups: 17% have less than 4,000 miles of annual usage (some of these are "on location, vehicles for Park and Rec). It is conservatively estimated that, this city fleet is oversized by vehicles (10%). The overall fleet value is in the magnitude of $60 million. To implement these overall savings requires specific analyses which were not part of this report or review: It is recommended that a specific project be mounted under City Manager auspices to make a vehicle by vehicle analysis in all operations to come up with specific down-sizing details. In the meantime, in the specific categories stipulated as noted in the second footnote on page 3, the city should suspend all vehicular purchase and recoup about $7.2 million in this fiscal year s budget. (See attached truck illustrations - Attachment A) Associated with this effort, the City s departmental processes for motor vehicle purchases need to be revamped in a variety of ways involving types of vehicles, features, etc. (See items which follow.) 2

7 2. Standardized vehicular purchases 1 in five classes 2 with staggered procurement every five years will have a series of positive cost/service benefits. The Advantages Fewer repair parts Less and standard test equipment and tools Familiarity of mechanics with vehicles Less down time Potential for added warranty service contracts Potential for better volume discounts Tighter specification control, more standardization Estimated 1 st year s annual savings -- $500,000. Estimated savings over 1 st five-year procurement cycle -- $2 million plus. Implementation of this process requires vesting more control in the equipment division vs. the departments. 1 The City should alternately explore direct lease/maintenance contracts with car manufacturers, with the maintenance to include a loaner car provision. 2 Small pick-ups, standard pick-ups, compact sedans, intermediate sedans and full sedans: purchase small pick-ups in years 1 and 6; in years 2 and 7, buy standard pick-ups, etc. (Almost 50% of the fleet.) 3

8 3. Garbage Collection: Today there are 6 types or models. Reduce and standardize to a maximum of three (ideally two) Centralize repair by models/makes to gain same advantage as two above Drivers Assign each driver to a truck ("ownership") Incentive bonus to driver's for limited downtime for repairs Reschedule driver assignments to 4-day ten-hour work weeks for automated trash pickups. This requires rescheduling of routes from current plans. 3 THIS CAN ELIMINATE UP TO 40% OF THE TRUCKS. Estimated annual savings - $2.1 million (over 6-year cycle, $8.1 million - See Attachment B) 3 Note: The current City plan to automate collections already contemplates some portion of these benefits. 4

9 4. Mechanics and Technicians Fundamentally, an effective, labor time standard program does not exist in the City. Without it, the City cannot compete with outside maintenance performance. Recommendation: Install an incentive program (flagging) using the Mitchell manual or equivalent for light vehicles, etc. Coincident with the adoption of this recommendation, stop all overtime. Performance should "flag" at 16 hours/day for good workers. Benefits: the program will get rid of poor performers get work done faster result in less down time of vehicles set minimum productivity standards for each mechanic overall productivity improvement estimated in 60-70% range In addition, move to four classifications versus two: provides growth for technicians reduces overall labor cost adds force flexibility The results of this program should reduce current work force by a minimum of 25% while improving client service. Estimated Annual savings in salary -- $1 million This program will require union support. It is believed to have excellent worker acceptance from good employees due to 4-day work week and higher earnings. Management must be dedicated toward making this work, or they and their workers will be replaced under competitivization program. 5

10 5. Warranties: Currently, controls are very poor, and the City spends time and money on parts procurement and repairs that are covered under manufacturers warranty. Estimated annual level of savings from setting control process under the EMS system $300, Fully implement the EMS system to include: A. Warranty data B. Maintenance schedule requirements and Flag system C. Repairs by vehicle to establish patterns including misuse, abuse, etc. 7. Establish inventory control process at tool cribs. Mechanics currently have open access. 8. Outsource modifications and component rebuilds when advantageous. 9. Set standards for new vehicle processing - (3-5 days). Currently some vehicles remain in this unused state for 30 days. 10. Outfit several trucks for off-site preventative maintenance of "big" vehicles. 11. Improve and enforce coordination of preventative maintenance on regular vehicles. 12. Refocus decisions on vehicular replacement based on mileage and condition vs age. 13. Equip maintenance force with improved parts and system cleaning equipment and hydro lifts. Estimate of capital outlay $300,000 This will minimize worker s compensation claims and improve productivity. 6

11 ATTACHMENT A FISCAL YEAR 1996 COMBINED GENERAL/ENTERPRISE FUND VEHICULAR ACQUISITION BUDGET (SELECTED EXAMPLES) Dump Trucks (Class 603) Acquisition Budget - $714,700 Total of 70 trucks in current inventory (cost $40 K each) usage: 41 driven less than 6,000 miles of these: 32 driven less than 3,500 miles 5 driven less than 1,000 miles Dump Truck II (Class 702) Acquisition Budget - $720,000 Total of 29 trucks in inventory (cost $40k each) usage: 11 driven less than 6,000 miles 5 driven less than 2,000 miles Flat Beds (Class 606 & 607) Acquisition Budget - $631,500 Total of 54 trucks in inventory (cost of the $43.5k, $35.6k) usage: 35 driven under 6,000 miles 18 driven less than 3,000 miles 5 driven less than 1,000 miles Crew Comp. Truck (Class 609) Acquisition Budget - $840,000 Total of 31 trucks in inventory (cost $56 K each) usage: 9 driven less than 6,000 miles 2 driven less than 1,000 miles RECOMMENDATIONS: Suspend all of the above purchases; remove $2.9 million from the budget; place dispatch of all trucks under motor vehicle division control; pool the resources and rent equipment for occasional use. NOTE: Vehicles with over 6,000 miles use remain at assigned location for user convenience. 7

12 ATTACHMENT B GARBAGE COLLECTION Currently fleet comprised of 155 trucks in 6 types RECOMMENDATIONS: Cut fleet to about 90 vehicles by attrition over 6 years Reduce fleet to 2 types Move to 4-day work weeks with crews NOTE: Today crews only work 4-6 hours per tour. Assign crews to specific trucks. (Incentive for them to improve maintenance.) Benefits Essentially no new truck purchases for 6 years. (Current budget allocates $ 1,458,000/year) 6-year savings of: $8,910,000 Repair savings due to "crew ownership" (Estimated at $450,000/year) Standardizing to two-truck types saves A. $90,000/year in parts and inventory 6-year savings of: $2,700,000 6-year savings of: $540,000 B. Savings in tools, test equipment, improved mechanics productivity of $180,000/year 6-year savings of: $1,080,000 Total 6-year savings estimate: $13,230,000 Per year savings: $ 2,205,000 8