Clark County Department of Public Works
Department Business Plan 1998-2000
Operations Division: Equipment Services
Mission:
To provide and maintain equipment, in a cost effective manner, that meets the service needs of user departments at a cost equal to, or below, other providers and insures availability of equipment to user departments.
SERVICES PROVIDED
The Equipment Services section is responsible for the management and maintenance of the county's fleet of vehicles and equipment. Items included in the fleet range from Sheriff patrol cars to road paving equipment, and myriad hand and support tools. This program purchases replacements for equipment which has reached the end of its useful life cycle and acquires new equipment as directed by its customer departments. Maintenance and capital replacements are funded through equipment rental rates charged to user departments. Equipment Services also manages five inventory stores, including equipment parts, road crew supplies, fuel, road rock, road oil, and traffic control implements.
The program is staffed by 22 full-time employees; including 15 mechanics, one service writer, one utility worker, one equipment repair supervisor, two parts supply personnel, one fleet supervisor, and one equipment services manager. Clerical and custodial support are provided by a reimbursable agreement with the Operations division.
A list of services and activities provided by Equipment Services is attached as Exhibit 'A.'
GOALS OF THE PROGRAM
· To maintain equipment in a cost effective manner while ensuring availability to user departments;
· Provide customers with a cost-effective fleet of vehicles and equipment that meets their needs; and,
· Rapidly provide serviced programs with quality, cost-effective parts, fuel and road maintenance supplies.
CUSTOMERS
The program's goal-driven services are provided to the following customers:
· Twenty-five county agencies, with assigned vehicles and equipment totaling 662 units;
· All county agencies, for motor pool usage of 11 vehicles;
· Eight non-county, public, agencies totaling 60 units.
· Fuel dispensing services for four non-county agencies 65 units.
SERVICE LEVELS
· Maintain all equipment in a safe and efficient condition;
· Maintain rental rates to user departments at a level at, or below, private providers;
· Maintain shop labor rate at a level at, or below, private providers;
· Perform maintenance/repair activities at a level equal to, or exceeding, industry standards; and,
· Provide a rapid turnaround of maintenance and repair activity to ensure availability to user departments.
LONG-TERM OBJECTIVES
State statutes require that counties have an equipment rental and revolving fund to provide and maintain equipment used to repair county roads. The Road department has the option to use a county equipment repair facility or use the revolving fund to contract this activity to other providers. Other county agencies are under no obligation to use the revolving fund to meet their equipment needs. Currently, all county agencies use Equipment Services for their equipment and vehicular needs.
The long-term objective of Equipment Services, is to continue to provide a cost-effective and efficient service that meets the needs, maintains the confidence, and exceeds the expectations of the user departments and outside accounts. This program will continue to change as user needs and technology changes. Particular areas to focus on include:
· Improved repair technology and new equipment engineering/reliability, allowing the program to accommodate the change in fleet size without the addition of personnel; program overhead rates should follow a downward trend as this occurs;
· Continual refinement of the operational and financial recommendations offered in the "ER&R Review Study" (Chiappetta report and subsequent EMIS fleet management system), ensuring that the program remains on a competitive basis with other providers;
· Continued cooperation with other agencies to consolidate services or to participate in joint ventures, eliminating duplication of services and equipment, and, due do the economies of scale, reducing the costs of materials, supplies, and construction.
· Supporting inter-agency usage of the county's fueling facilities as an effort to provide convenience and cost savings to these agencies. This will include, if necessary, lobbying in 1998 for legislative changes that would allow this now "gray area"; and
· Soliciting new reimbursement accounts from other agencies that will provide for economical maintenance of other agency equipment, while at the same time reducing program overhead rates.
· Addressing the Energy Policy Act of 1992 which may mandate the use of alternatively fueled vehicles (AFV’s) for up to 70% of the County’s fleet of passenger vehicles and pick-up trucks by the year 2005; this would require immediate construction of new fueling facilities that would dispense liquid or compressed natural gas, methanol, or other alternative fuel.
FUTURE SCENARIOS AND MARKETING ACTION PLANS
SCENARIO 1
For this scenario, the assumption will be that the existing contracts with the City of Vancouver for roads and parks maintenance and for sheriff patrol end as scheduled on December 31, 1999. Additionally., under this scenario, no additional external contracts are entered into and there would be no drainage program for Salmon Creek and Lakeshore.
Customers
The effect of this scenario on Equipment Services would be of a "domino effect" resulting from reductions in assigned equipment in roads and parks maintenance programs and the Clark County Sheriff’s Office.
With the loss of the city contracts, three county agencies areas whose equipment needs are met by ER&R will experience a decrease in their assigned fleets. The Sheriff’s Office has been directed to reduce its fleet size by 28 units; road operations has determined it would drop 13 pieces of rolling stock and approximately $10,000 in rental costs for auxiliary equipment; parks maintenance estimates the loss of two pieces of rolling stock. Other agencies are not effected as either they went through reductions in 1997 with the immediate effect of the annexation or they continue to provide regional services.
Refer to Exhibit ‘B’ for itemized reductions by user departments which indicates a total fleet reduction of 43 pieces of rolling stock and, as yet to determined, a certain number of auxiliary equipment such as snow plows, sanders, compressors, etc. This further translates to the elimination of 1.34 mechanic positions and a reduction of $517,427 in user department equipment rental expense and the like amount for ER&R equipment rental revenue.
Exhibit 'C' converts revenue loss to an expense reduction of $212,190; the difference being the components of revenue being accrued for equipment replacement (depreciation and inflation factor) and damage repair accrual.
The loss of equipment, revenues, and manpower could be offset through agreements with other agencies. This concept, particularly with Clark Public Utilities and the Hazel Dell Sewer District, will be discussed throughout the business plan.
Policy Issues
This scenario creates a policy issue that has yet to be adequately addressed. The first issue, hinted at briefly above, is the status of the moneys accrued for the replacement of the 43 vehicles being phased out or transferred/sold to the City. Until the 43 vehicles involved are identified piece by piece, the amount of existing replacement accruals cannot be calculated for these units. Exhibit 'C' is a preliminary recommendation for the vehicles and equipment involved. The general philosophy should be that moneys accrued should not follow the vehicle even though that is the purpose of the revolving fund; the amounts accrued should revert to the contributing fund to the degree the fund is current with the depreciation schedule. Additional information not currently available is required before this comparison can be accurately made. Two options can be considered for the distribution of whatever moneys are available. They are:
· The Revolving Fund retains moneys to offset the 10 year deficit;
· Moneys accrued returned to original capital contributing departments; or,
newest and most technically advanced equipment. The options are many, and any one chosen would need to be considered as it relates to the reserves accrued and the agreed-upon status of the reserves. These options include, but are not limited to:
Services
In this scenario, the majority of the county service area would become the north and northeast portions of the county. A logical move would be to centralize the road crew at the Brush Prairie, 149th Street, location. For convenience and mobilization issues, this location should house a facility for heavy equipment repair. However, the majority of the light equipment, like passenger/patrol vehicles and pick-up trucks under one ton, is assigned to county agencies in the downtown Vancouver area. Serving these vehicles at 149th Street is not a feasible option due to the distance from downtown Vancouver.
As such, Equipment Services could be required to maintain two maintenance/repair facilities: heavy equipment at 149th Street and light equipment at 78th Street. The start-up of a second shop at 149th street would be an expensive undertaking and would require a capital contribution from the Road Fund of approximately $344,000 for comparable equipment currently in use at the 78th Street Operations Center. Additionally, a second parts store, with personnel and a heavy-equipment wash rack, would be required.
If Equipment Services were to reduce the fleet size and create a second shop, they would have to significantly lower their level of service by eliminating the swing shift work crew. Existing mechanical staff would be split between the two locations. No justification can be made to increase staff, while at the same time reducing the fleet size.
Alternatives
Converting to a two-shop operation at a time when Equipment Services is attempting to reduce overhead costs, to remain competitive with private providers, would double overhead expenses and drastically increase rental rates to user departments, while at the same time reducing the current level of service. To prevent this from happening, alternatives need to be identified and reviewed. One is the use of the Clark Public Utilities (CPU) facilities on SR 503, which is in close proximity to the 149th Street location. Both scenarios in this business plan suggest an agreement with CPU wherein Equipment Services would manage and maintain that utility's fleet of equipment, which includes approximately 200 units. In this alternative, Equipment Services would use the CPU facility to maintain heavy equipment and, more than likely, absorb existing CPU mechanics. This would eliminate the need for shop start-up costs at 149th Street, and 78th Street could become a light equipment repair shop. However, there would still be a reduction of at least one county mechanic.
Alternative two involves considering privatization of all, or components of, maintenance and repair activities. Due to the reduced economies of scale with a major reduction in fleet size, coupled with the addition of a second repair facility, out-sourcing may be a more economical and efficient method of maintaining the county's fleet. Private repair locations in the Battle Ground and downtown Vancouver areas could provide the convenience required of, and expected by, the user departments.
Marketing Methods
To remain competitive and maintain or reduce its current overhead rates, Equipment Services would be required to attract new reimbursable accounts to offset the loss of 43 county vehicles. As discussed earlier, preliminary discussions are underway with CPU to assume management and maintenance responsibilities of its vehicle fleet. Anticipated retirements of both county and CPU mechanics should eliminate the need for any lay-offs. Similar discussions are currently being made with the Hazel Dell Sewer District; they own approximately 14 vehicles. Other agencies that would be contacted include the Battle Ground School District, and the cities of Battle Ground and Ridgefield. The Chiappetta report will be utilized as a marketing tool in discussions with these agencies.
SCENARIO 2
Under this scenario, the Vancouver contracts end, some additional external contracts are added, and the Salmon Creek/Lakeshore drainage utility is not created.
CUSTOMERS
Short-Term Plan
The short term plan is two-fold. Roads and parks maintenance will continue to solicit new external accounts. As these agreements are entered into, ER&R will continue to provide services and needed and increase the fleet size and mechanic staffing as needed. Secondly, ER&R will continue to market its services to agencies such as CPU, VHA, and the Hazel Dell Sewer District. Although conversations with these agencies have been in process for the last two years, little progress has been made in actually developing contractual agreements.
Long-Term Plan
At a time when city and county boundaries are changing, and once independent and isolated communities are growing closer together, re-thinking the way public works services are provided to constituents is in order. The concept of a Unified Maintenance Agency has been discussed in detail among Operations division staff, and in general with the City of Vancouver Public Works department as a long-term solution to the provision of public works services to the citizens of Clark county.
Under the UMA concept, all agencies providing public works operational services within the county would consolidate to form one independent agency. Equipment Services and its counterparts from the other agencies would be included in this consortium. The UMA would contract its services to the cities and county, as well as fire and utility districts. The UMA would report to a board of directors composed of members similar to the C-TRAN board. This would provide constituents with existing, but perhaps improved, levels of service in what is now being termed a seamless jurisdictional boundary at more cost effective pricing.
SERVICES
Short-Term Plan
ER&R will adjust fleet management and equipment repair levels to meet the demands of the new accounts as they are entered into. ER&R will continue to promote vehicular and equipment maintenance and repair services as well as its fuel dispensing services to other agencies within the area.
Long-Term Plan
Under the UMA concept, the types of services provided should remain similar to the current system, and the short-term plan. However, the scope of service provided should dramatically increase. With the consolidation of management and direction of provider agencies, equipment maintenance/repair and fueling facilities would be conveniently located throughout the county, eliminating considerable travel time while decreasing the amount of time equipment is down for repair. Additionally, a wealth of experience and expertise will come together with the consolidation of technical, mechanical, and administrative employees. Finally, the larger economies of scale will allow for savings in bulk equipment, supplies, and materials ordering.
A combination of experience and attrition should lead to efficiencies in consolidation and a decrease in staffing levels. This will allow for a three to five year break-in time for employees to learn different shop and vehicular equipment, maintenance/repair techniques, and the requirements and expectations of the user accounts.