SNOW AND ICE OPERATIONS AND FLEET SERVICES BEST … · practice assessment, snow and ice control operations and fleet replacement practices. This report reflects the findings and

Executive Summary

SNOW AND ICE OPERATIONS

AND FLEET SERVICES BEST

PRACTICE REVIEW

for the

CITY OF PRINCE

GEORGE

July, 2014

MERCURY ASSOCIATES, INC.

C TY OF PRINCE GEORGE

Executive Summary

TABLE OF CONTENTS

SUMMARY ...................................................................................................................... 1

SNOW AND ICE CONTROL OPERATIONS .............................................................. 1

FLEET SERVICES BEST PRACTICE REVIEW ......................................................... 3

FLEET REPLACEMENT PRACTICES ....................................................................... 3

IMPLEMENTATION ........................................................................................................ 6

PRIORITY ONE .......................................................................................................... 6

PRIORITY TWO .......................................................................................................... 7

PRIORITY THREE ...................................................................................................... 8

PRIORITY FOUR ........................................................................................................ 9

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SUMMARY

The City of Prince George (CPG) operates a fleet of approximately 450 vehicles, pieces of equipment, and attachments, which is managed by the Fleet Services Division of the City’s Operations Department. Mercury Associates was hired to evaluate several facets of the management and operation of the fleet, some concerns about which were raised by difficulties the City faced this past winter in dealing with the demands of unusually heavy snowfalls. The CPG Snow Committee was charged with providing oversight for the project. They were instrumental in arranging interviews, reviewing reports and gave excellent guidance through all stages of the project. This Fleet Services Program Review covered three broad areas – fleet services best practice assessment, snow and ice control operations and fleet replacement practices. This report reflects the findings and recommendations of this review which was conducted in the period May to July 2014 and consists of 4 documents: 1. Executive Summary 2. Annex A – Snow and Ice Control Operations Review 3. Annex B – Fleet Services Best Practice Review 4. Annex C – Fleet Replacement Practices SNOW AND ICE CONTROL OPERATIONS

The snow and ice control operations review covered five areas - Snow and Ice Control Policy, Equipment, Operations Management, Ice Control Operations, and Training.

City of Prince George (CPG) has a detailed snow and ice control policy that is well-known and adhered to by operators. Some improvements would strengthen the policy and improve operations. First, the policy defines levels of service (LOS) but does not include the timeframes required to complete plowing the three priorities of streets. A timeframe is needed in order to help prioritize resources and assess the effectiveness of snow clearing operations. Second, the existing shift deployment described by policy is not the most efficient way to get work completed. Snow and ice control crews are recommended to work 12-hour shifts on a temporary and required basis to remove snow and ice after a weather event. Third, CPG adopted a Salt Management Plan in 2006. The results of the salt management actions should be reviewed annually to track the implementation status and respond to new opportunities for improvement. Fourth, the current policy does not designate permanent snow routes to provide easier access to snow clearing equipment. CPG should add permanent Snow Routes to the winter parking restriction policy and describe these in their policy. Fifth, the current policy of plowing Downtown and main arterial roads on the first night of plowing needs review. A policy change to decrease the priority of the Downtown core would optimize resources and levels of service. Finally, CPG should group all policy and procedure documents together and create a Snow and Ice Control Operations Manual for consistent operational control and training purposes.

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As part of an equipment review, Mercury was asked to conduct condition assessments on seventeen pieces of equipment used in snow and ice control operations, and comment on the capabilities and availability of contracted resources. Sixteen of the seventeen pieces of snow equipment selected for condition assessment are either completely worn out and need to be replaced or significantly worn out and need to be refurbished. Individual recommendations by vehicle are included in the report. A shortage of contractor graders significantly restricted CPG’s capacity to perform snow clearing last winter. The current rental equipment bidding system is unsustainable and needs to be overhauled to obtain a reliable supply of rental equipment in the long run. In particular, CPG should consider offering retainers and should include equipment age as a factor in awarding contracts. Outsourcing a portion of the snow and ice control operations is not recommended for the 2014-2015 winter season. The outsourcing option should be reviewed again if there is more private equipment available in the future.

In terms of operations management, CPG needs to have better and more proactive pre-winter planning and preparation. As previously mentioned, they need to revise the shift system to increase coverage from 81% to 100%. CPG needs to implement a detailed work tracking system and leverage telematics such as Geographical Information System technology as well as employee input to improve the scheduling of snow clearing operations. The consistent enforcement of a winter parking restrictions policy would also enhance the efficiency of snow and ice control operations.

Ice control can also be improved. The City’s own weather station with permanent pavement sensors installed at Vellencher Road is not currently used as the instruments need calibration. Getting this facility back in operation would improve the availability of on-site weather information. The current process of applying ice control materials in CPG is inconsistent, ineffective and difficult to manage since the spreader controller system has not been calibrated for two years. The liquid calcium chloride anti-icing program ran for two years and was discontinued due to the City not having accurate weather information and the high cost of applications. The City had implemented a pre-wetting program for a few years with success. However, the program stopped the last couple of years because the pre-wetting equipment was not maintained. Spreading abrasives without pre-wetting results in significant loss of materials. CPG needs to use Road Weather Information System technology and subscribe to a quality contract-weather forecasting service to make timely and accurate snow and ice decisions.

Effective and efficient snow and ice control operations require dedication to adopting and implementing best practices to provide and maintain safe transportation systems. CPG needs to provide a comprehensive training program that ensures that operational personnel are skilled and competent in delivering snow and ice control services with the resources established by Council. FLEET SERVICES BEST PRACTICE REVIEW

The fleet services portion of this review concentrated on five functional areas – fleet utilization, acquisition and disposal, operations management, information management and customer relationship management.

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A fleet utilization review, conducted in 2012, resulted in little impact on fleet size. An annual review should be conducted with a mandate to identify lightly-used, less critical assets. A policy on utilization monitoring should also be created. The reimbursement program currently in use is one of the most extensive we have seen. This carries a risk as if employees opt out of the program, there is no contingency to provide them with vehicles. A cost comparison between owning and reimbursing must be part of the approval process. Some uncertainty in the division of responsibilities between Departments lingers following the reorganization of September 2013. As the arrangement matures, fleet, procurement and the user all have a role to play in vehicle acquisition and these roles should be formalized and recorded in policy. No disposal has taken place since the reorganization and there is some confusion as to who will take the lead in this function. Operations management involves operator and vehicle licenses, operator training and accident review. CPG has a very good Driver`s Handbook which contains all of the important information that fleet operators need to know. There is a peer-led driver training program in place and a central authority responsible for licenses. The City would benefit from developing a template for regular accident reporting to management, an in-house demerit system to reduce the risks associated with retaining high-risk drivers and tasking the Accident Review Committee with determining accident preventability. CPG currently uses JD Edwards to manage the fleet. It is not the best tool for this purpose. As such, many of the Key Performance Indicators (KPI) that define fleet performance cannot be tracked. We strongly recommend the acquisition of a fit-for-purpose fleet system as well as the implementation for telematics for route optimization, salt management and fuel efficiency. Customers reported high levels of satisfaction with the support provided to the emergency vehicle fleet and the light-duty fleet. Satisfaction with the support provided to the heavy-duty fleet was not as high with customers complaining about quality, timeliness and communications. There are no Service Level Agreements, regular meetings with customers or reports on information of customer interest. FLEET REPLACEMENT PRACTICES

In this project component Mercury:

Determined optimal replacement cycles for selected types of assets in the City’s fleet;

Determined the long-term replacement costs of the fleet; and

Modelled the costs of various alternative financing approaches. An effective fleet replacement program is essential for controlling fleet performance (vehicle suitability, availability, reliability, safety, and environmental impacts) and total cost of ownership. One of the primary elements of an effective replacement program is

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determining when to replace assets. Ideally, vehicles should be replaced at the age or accumulated usage point at which their combined capital and operating costs are at or near a minimum. To assist CPG in identifying the optimal lifecycles for fleet assets, Mercury empirically calculated replacement cycles for four types of vehicles (dump trucks, loaders, graders, and sidewalk snow machines) in the City’s fleet. This involves modeling the stream of costs associated with acquiring, operating, and maintaining and repairing a particular type of vehicle or piece of equipment over a range of potential ages or replacement cycles, and then determining the cycle that will result in the lowest total cost of ownership. We also reviewed the City’s current replacement cycle guidelines for the remaining vehicle and equipment classifications. While we found most of these guidelines to be reasonable, we have recommended adjustments to some cycles, as summarized below.

Classification Current

Replacement Cycle (months)

Recommended Replacement

Cycle (months)

Pickup trucks, compact 72-120 96

Pickup trucks, ½-ton 96-120 96

Pickup trucks, ¾-ton 120 96

Dump trucks, HD 120 84

Backhoes 60 144

Loaders 120 180

Excavators 60 144

Graders 120 144

Trailer mounted pumps 96 120

Wood chipper 96 120

Stump grinder 96 120

The City does not have an effective fleet replacement program as indicated by the overall age of the fleet, lack of funding for fleet renewals over the past several years, and the current financing approach. We quantified the long-term replacement costs of the fleet using our proprietary computer program CARCAP™ (Capital Asset Replacement Cost Analysis Program™). The 315 vehicles and pieces of equipment included in this review of fleet replacement practices have an estimated replacement cost today of $35.4 million. As of June 1, 2014, the current average age of the fleet is 9.6 years. We can infer from this that the “de facto” average replacement cycle for the assets in the fleet is two times 9.6, or 19.1 years. In contrast, if the City were replacing its fleet assets in accordance with the replacement cycles we recommend it use, the weighted average replacement cycle for all the different types of

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assets in the fleet would be 9.5 years. Assuming that the assets in a fleet are normally distributed by age, which is not unreasonable for a fleet of 315 units, their average age would be one-half of their average replacement cycle, or 4.75 years. The current age of the fleet (9.6 years) is nearly double what we would expect it to be. As a result, there is a backlog of assets in need of replacement. In the fleet, roughly 53 percent of the total of all the assets will meet or exceed recommended replacement cycles in the first year of the plan. The estimated replacement cost of these vehicles (in 2015 dollars) is $13.0 million. The final step in this component of the project was to explore the merits of several replacement financing approaches that might merit consideration by the City. The approaches selected for investigation were: outright purchase using cash from ad hoc (year-to-year) appropriations, a sinking fund, and loans. Since about mid-2010, the City has been financing the replacement of vehicles primarily by entering into 5-year capital “leases” (i.e., loans) with the Municipal Finance Authority (MFA). Regardless of a given asset’s useful life, the City secures a 5-year loan and pays off the principal balance at the end of the 5th year. In the case of a unit that has a service life of 12 years, the City makes payments on the first 5 years of the loan on a 12 year loan (roughly 40 percent of the acquisition cost) and then pays the balance at the end of the 5th year. Any remaining balance (i.e., the amount not repaid during the initial five year period) is funded by the Mobile Equipment Replacement Reserve (MERR). However, the customer is only charged the actual monthly loan payment for the initial 5 years (the maximum term limit allowed without electoral assent). The loan balance is then paid at the end of 5 years with funds that have been previously deposited in the MERR. While a debt financing approach for fleet renewal is a viable financing alternative, the fact that the amount charged to the customer does not equate to the actual capital cost of the asset is not appropriate or sustainable with the current funds in the MERR. The City is not replacing its fleet assets in an effective manner under its current financing approach of using MFA financing where repayment of the loan is capped at 5 years. An indication of how well the City has been served by this financing approach is the current average age of the assets in its fleet, which is roughly double what it should be. Replacements have been significantly curtailed over the last several years, most likely due to concerns that the MERR balance would not be sufficient to fund additional loan payoffs if new approvals were acquired using the current approach.

IMPLEMENTATION

Having conducted hundreds of these studies, we understand the magnitude of the change that we are recommending and also the difficulties inherent in creating an implementation plan and schedule. With this in mind we have quantified each of our recommendations in terms of priority. Using these priorities, we recommend that you approach the necessary changes in stages as laid out below. The priority assignments are from one to four as shown:

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1. Immediate – before next winter 2. Within 6 months 3. Within 12 months 4. Beyond 12 months

PRIORITY ONE

1. Create a fleet management policy framework addressing functional areas such as utilization, acquisition, remarketing, fleet replacement and maintenance. Establish SLAs with user groups.

2. Acquire a fit-for-purpose Fleet Management Information System (FMIS). 3. Review and adjust the priority of the main arterial roads and streets in Downtown to

optimize efficiency. 4. Develop a pre-winter preparation calendar to identify all tasks that need to be

completed prior to winter. 5. Adjust shift schedules so the two-person day and afternoon (Tuesday to Saturday)

crews are scheduled to work Wednesday to Sunday. A new two-person crew should be set up to cover the night shift on weekends.

6. Extend the current 10-hour shift to 12 hours to fully utilize equipment and personnel when responding to major snow events.

7. Assign dedicated individuals to spreader controller calibration. All related training and diagnostic tools should be provided to the individuals to undertake the annual calibration and trouble-shoot operational problems during the winter.

8. Calibrate the pavement sensors and weather instruments at the Vellencher Road

weather station. 9. Contract with reputable weather forecasting service providers to access area-specific

contract weather forecasting service with RWIS information.

10. Use salt brine as the anti-icing chemical. The standard operating procedure of anti-icing and pre-wetting should be updated.

11. Repair and calibrate and train Streets employees in these techniques. 12. Assess and prioritize winter maintenance training requirements and provide

employees with snow-related training appropriate to positional responsibilities.

13. Depending upon the capital financing approach used, and not taking into account current MFA loan obligations (which would be covered by a portion of the current MERR fund balance), the average gross replacement cost of the City’s fleet ranges

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from $2.5 to $4.0 million per year over the next 10 years. These amounts would be reduced by the proceeds from the sale of used vehicles which are estimated to average $0.53 million per year over the same period. Thus, average annual net fleet replacement spending requirements would be approximately $2.0 to $3.5 million per year.

14. Continue to use debt financing to fund fleet replacements. Align the loan term as

closely as possible to the expected useful life of the asset and develop capital charge-back rates to recover the full cost of the loan and any applicable fees, taxes, and other costs.

PRIORITY TWO

15. Conduct an annual utilization review. 16. Enforce mechanic sign-off on the defect sheets so that operators can rely on them to

know if a repair has been completed. 17. CPG should identify and acquire a telematics solution to improve fleet efficiency in

three key areas – fuel usage, salt management and route optimization. 18. CPG should formalize a fleet management steering committee. It should create a

charter for this committee to include an annual review of fleet replacement plans, fleet budget requests, fleet utilization levels, and other pertinent fleet-related issues, challenges, and opportunities. Members should be representatives from Fleet Services, Procurement, and a cross section of fleet user organization representatives.

19. Restructure rental rates to reflect actual costs and include an administrative, capital

and operating component. 20. Define completion timeframes based on resources and operating budget. 21. Implement Snow Routes to enhance the efficiency of snow and ice control crews. 22. Update existing snow and ice control procedures and create standard operating

procedures on making snow and ice control decisions, enforcement of parking restrictions, and the maintenance of snow disposal sites.

23. Change the rental list system by including a “slotting factor” which adjusts for the age

of the equipment offered.

24. Offer a premium rate for grader rentals that occur during a snow event to secure more contractors to work for the City. The rate should be set based on provincial guidelines, age of equipment, and local factors.

25. Consider a seasonal minimum guaranteed payment or a retainer to secure committed

grader contractors to work for CPG.

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26. Invest in fleet renewal or reconditioning as per the specific recommendations of the

condition assessments. 27. Develop a detailed work tracking system for sanding and plowing individually for each

category of the three priority streets. 28. Develop plowing schedules that follow the garbage collection calendar and use

Geographical Information System (GIS) technology to develop detailed plowing routes and maps.

29. Make field observations on material applications and adjust the applications as

required. CPG should check field performance of ice control activities and enforce compliance of all ice control programs.

30. Assess the needs for backup equipment operators of all equipment types. Equipment

operators should be provided with cross-training in accordance with the requirements and priorities.

31. Adopt the changes to the recommended replacement cycles identified in this report. PRIORITY THREE

32. Review the reimbursement policy and conduct a cost comparison between reimbursement and ownership on a case-by-case basis.

33. Develop a reporting matrix that identifies information and KPIs that are valuable to

fleet customers as well as senior management and includes fleet safety. 34. Assign the Accident Review Committee the responsibility of determining whether an

accident was preventable before determining causes.

35. Conduct an annual survey to determine the level of satisfaction of fleet users with Fleet Services’ performance. The results of the survey should be retained and used to measure improvements or identify emerging problems.

36. Ensure Fleet Services meets regularly with its principal customers to discuss fleet

replacement, service satisfaction, and any problems they are facing. 37. Develop a strategy to use e-notification and social media for winter parking

restrictions. 38. Review and update snow-related information on the City website. A dedicated

individual should be assigned the responsibility to update the information. 39. Compile a Snow and Ice Control Operations Manual.

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40. Provide Seconded Trainers with “Train the Trainer” and advanced operating skills training to ensure consistency

PRIORITY FOUR

41. Identify high-risk drivers through the use of an in-house demerit system. 42. Get endorsement for The Salt Management Plan at the highest level of the

organization. 43. Assign a team to oversee the implementation of Salt Management Plan. 44. Seek feedback from equipment trainees periodically on quality of peer training and

take actions to address any concerns. 45. Ensure snow-related job knowledge and training is included in the job descriptions of

all Streets employees based on the results of training needs assessment. 46. Develop and deliver a snow seminar to the target audience as required.

Annex A

SNOW AND ICE

OPERATIONS

REVIEW

for the

CITY OF PRINCE

GEORGE

JULY 2014


CITY OF PRINCE GEORGE

Snow and Ice Control Operations Review

TABLE OF CONTENTS

INTRODUCTION ............................................................................................................. 4

REVIEW METHODOLOGY ......................................................................................... 4

SNOW AND ICE CONTROL POLICY ............................................................................. 5

INDUSTRY BEST PRACTICE .................................................................................... 5

Levels of Service (LOS) ............................................................................................ 6

Timeframes ............................................................................................................... 6

Priorities .................................................................................................................... 6

End-of-Storm Conditions ........................................................................................... 7

Parking Restrictions for Snow and Ice Control Operations ....................................... 7

Salt Management Plan.............................................................................................. 7

Snow and Ice Control Operations Manual ................................................................ 7

FINDINGS ................................................................................................................... 8

Level of Service ........................................................................................................ 8

Timeframes ............................................................................................................... 9

Priorities .................................................................................................................. 11

End-of-Storm Conditions ......................................................................................... 11

Parking Restrictions for Snow and Ice Control Operations ..................................... 11

Salt Management Plan............................................................................................ 11

Snow and Ice Control Operations Manual .............................................................. 12

OPPORTUNITIES FOR IMPROVEMENT................................................................. 12

RECOMMENDATIONS ............................................................................................. 13

EQUIPMENT ................................................................................................................. 14

INDUSTRY BEST PRACTICES ................................................................................ 14

Strategy .................................................................................................................. 14

Equipment ............................................................................................................... 14

Rental Equipment ................................................................................................... 15

FINDINGS ................................................................................................................. 16

City of Prince George Equipment ........................................................................... 16

Condition Assessments .......................................................................................... 18


Inspection Process ................................................................................................. 18

Rental Equipment ................................................................................................... 22



OPERATIONS MANAGEMENT .................................................................................... 25

INDUSTRY BEST PRACTICE .................................................................................. 25

Winter Preparation Calendar .................................................................................. 25

Winter Shifts Coverage ........................................................................................... 26

Work Tracking ......................................................................................................... 26

Scheduling of Snow Clearing Operations ............................................................... 26

Control of Materials ................................................................................................. 26

Making Snow and Ice Control Decisions................................................................. 27

Enforcement of Winter Parking Restrictions Policy ................................................. 28

FINDINGS ................................................................................................................. 28

Winter Preparation Calendar .................................................................................. 28

Winter Shifts Coverage ........................................................................................... 28

Work Tracking ......................................................................................................... 31

Scheduling of Snow Clearing Operations ............................................................... 32

Control of Materials ................................................................................................. 33

Making Snow and Ice Control Decisions................................................................. 33

Enforcement of Winter Parking Restrictions Policy ................................................. 34



ICE CONTROL OPERATIONS ..................................................................................... 37


Anti-icing ................................................................................................................. 38

Deicing .................................................................................................................... 39

Traction Enhancement ............................................................................................ 39

Pre-wetting .............................................................................................................. 40

Calibration of Controller Equipment ........................................................................ 40

FINDINGS ................................................................................................................. 40

Anti-icing ................................................................................................................. 40

Deicing .................................................................................................................... 41


Traction Enhancement ............................................................................................ 42

Pre-wetting .............................................................................................................. 42

Calibration of Controller Equipment ........................................................................ 42



TRAINING ..................................................................................................................... 44


FINDINGS ................................................................................................................. 44

Equipment Operator Training .................................................................................. 44

Snow-Related Training ........................................................................................... 45




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INTRODUCTION

The snow policy of the City of Prince George (CPG) sets the agenda to ensure a safe, efficient and cost-effective roadway system and strives to provide safe winter road conditions for vehicular and pedestrian traffic within the resources established by Council. Effective and efficient snow and ice control operations require dedication to adopting and implementing industry best practices. This report presents the results of a detailed review of the snow and ice control operations of the City of Prince George from May to June 2014. The review covers five areas: 1. Snow and Ice Control Policy

2. Equipment

3. Operations Management

4. Ice Control Operations

5. Training

The operations review involved a thorough analysis of the data collected, a comparison of the current snow and ice control operations with industry best practices and an assessment of opportunities for improvement. It will provide the City with insights and recommendations to improve the effectiveness and efficiency of the operations.

REVIEW METHODOLOGY

In performing this review, Mercury Associates utilized a variety of information collection and analysis techniques to conduct quantitative performance measurement, business process mapping and gap analysis. These techniques were used throughout the following steps: 1. Initial Information Request. The City was given a detailed checklist specifying the

types of documentary material (e.g., organization charts, policy and operating procedure statements, sample forms and reports) and quantitative data (e.g., operating budgets and actual expenditures, maintenance work order, vehicle meter readings) needed to conduct this snow operations review. Most of the material was received in late May with follow-up documents in mid-June.

2. Kick-Off Meeting. A kick-off meeting was held May 26, 2014 to meet the Snow Committee and gain valuable insights into the organization and key operational issues.

3. Interviews. Following the kick-off meeting, Mercury personnel met with staff in

Streets and private snow contractors. The following interviews were conducted:


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Bill Gaal Director, Operations Flavio Viola Manager, Transportation Mick Jones Supervisor, Streets Bill Welygan Foreman, Streets Bob Reid Foreman, Streets Doug Peden Foreman, Streets Shayne Eyford Foreman, Streets Marcel Poulin Foreman, Streets Murray Chartrand Equipment Operator Louis Gomes Equipment Operator Gabe Laroque Equipment Operator Jason Schuemann Equipment Operator Shirley Halliday Equipment Operator Lorne Koch Equipment Operator Gary Reid Equipment Operator Darren Sisson Equipment Operator Robert Waite Equipment Operator Dave Kidd Equipment Operator Dallas McDougall Equipment Operator Cindy McDonald Dispatcher/Admin Support Randy Vohl Private Contractor Steve Turkowsky Private Contractor

4. Documentation and draft report. The chapters which follow cover the main aspects of CPG’s snow operations.

SNOW AND ICE CONTROL POLICY

Snow clearing and ice control operation is an essential service provided by municipalities to keep their network of roadways passable and safe during the winter. The primary goals of snow clearing and ice control operations are to reduce hazards of snow and ice covered roads, protect the environment, minimize economic loss to the community, ensure passage for emergency vehicles and provide mobility to road users at an economical cost to taxpayers. It is important for municipalities to adopt a systematic approach to using available technologies, strategies, and resources to improve service and reduce costs. INDUSTRY BEST PRACTICE

Municipalities must have a detailed snow and ice control policy to guide their snow and ice control operations and services. A snow and ice control policy should cover the following areas as a minimum:

Levels of Service

Timeframes


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Priorities

End-of-storm conditions

Parking restrictions for snow and ice control operations

Salt Management Plan

Levels of Service (LOS)

A snow and ice control policy defines the intent of winter maintenance operations and the level of service (LOS). The level of service is a set of operational guidelines and procedures that establishes the priorities, timing, quality standards, and expected timeframes to perform treatments in response to weather conditions. Timeframes

An expected timeframe is a key component of the LOS. It is the expected time required at the end of a snow event to complete the treatment. In the context of snow clearing, the expected timeframe is the number of hours it takes to complete the snow clearing operation. A heavier-than-normal snowstorm is expected to take longer than the normal timeframe to complete the cleanup. A good snow policy includes the expected completion timeframes to help winter maintenance managers plan and prioritize resources, select the appropriate operational strategy to fight the storm, and assess the effectiveness of the snow clearing operations. The timeframe also provides a measure of accountability and establishes a baseline LOS for continuous improvement. The desired LOS is closely related to the expected snow surface conditions (for example, bare pavement), the snow and ice conditions prior to clearing, the availability of snow equipment and resources, the average daily production of crews and an annual snow budget that supports the LOS. Priorities

Clean up after a major snow event requires a large amount of resources as well as planning and coordination. In the event that resources are limited, a snow and ice control policy must define the priorities to deploy resources. More resources should be deployed to treat infrastructure of higher priority. In general, major thoroughfares and central business areas are considered the highest priority. To determine the plowing priorities, municipalities should:

Assess the vulnerability of the transportation network to determine main routes that are susceptible to drifting and hazardous driving conditions and identify the top critical routes in Priority 1 streets.


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Solicit input from key stakeholders, including city elected officials, representatives from business and industry sector, City transit, Ministry of Transportation, and emergency service providers to optimize resources, productivity and level of service.

End-of-Storm Conditions

The end-of-storm conditions define the expected surface conditions after the roadways and sidewalks are treated. The condition goes from bare, which is the best, to various thicknesses of compacted snow surface. Parking Restrictions for Snow and Ice Control Operations

Parked vehicles on public street systems are obstacles that can negatively impact the safe and efficient work of snow and ice control personnel. The quality of snow clearing operations suffers as the streets are partially cleared. A good snow policy provides effective rules and policies to regulate parking restrictions in support of snow and ice control operations. A good winter parking restrictions policy should include permanent Snow Routes to support snow and ice operations. Main roadways, bus routes, collectors, and streets in the central business district should be designated as Snow Routes. Parking on these streets is prohibited for a pre-determined period during snowfall-active months every year. Signage should be clearly erected on Snow Routes to enhance public compliance. Snow Routes do not impact street sweeping operations as parking ban on Snow Routes would be lifted prior to street sweeping season. Snow and ice control activities would have subsided when street sweeping begins in spring. Salt Management Plan

Environment Canada developed the Code of Practice for the Management of Road Salt to mitigate the adverse effects of road salt on the environment. The Code of Practice applies to organizations that use over 500 tonnes of road salt annually and therefore applies to CPG. Transportation Association of Canada published a Salt Management Guide and a series of Syntheses of Best Practices to assist organizations to more effectively manage their salt use. Municipalities should use these documents as guidelines to develop their own salt management plans. Snow and Ice Control Operations Manual

A best-in-class snow policy framework includes a Snow and Ice Control Operations Manual. The Manual should cover the following:

Snow and Ice Control Policy.

Standard Operating Procedures.

Contact List for after-hours callouts.


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To effectively carry out the Snow and Ice Control Policy, the Policy must be carefully formulated, comprehensive, and communicated to all users throughout the municipal government, from elected officials to the lowest level of the responsible business unit. FINDINGS

Level of Service

CPG has a detailed snow and ice control policy that was approved by Council in 2013. It lays out the priorities for snow and ice control, end-of-storm conditions, roles and responsibilities and the general levels of service. The snow accumulation at which snow clearing will be initiated is summarized below:

Table 1 Current CPG Level of Service

Street Priority

Category Snow

Accumulation to Initiate Clearing

End-of-Storm Conditions

1 Streets in Downtown › 75 mm Bare pavement

1 Main Arterial Roads › 75 mm Compacted snow less than 25 mm

1 Civic Facilities and Parks parking lots

> 75 mm Bare pavement

2

All Remaining Bus Routes All commercial/industrial roads

› 120 mm Compacted snow less than 50 mm

2 Civic Facilities and Parks entrances and pathways

> 50 mm Bare pavement

2 Park Facilities and Pathways – selected parking lots

> 100 mm Compacted snow less than 50 mm

3 Residential › 120 mm Compacted snow less than 50 mm

3 Residential Lanes Plowed at the same time as Residential

streets

No max. depth of compacted snow surface

Sidewalks in Downtown and along Major Arterials › 50 mm


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As streets are plowed, residential and commercial driveway entrances will be cleared as required.

The parking lots and pathways of civic facilities and parks are cleared by Park employees. Streets Operations are responsible for the parking lots and pathways of Operations Facilities.

The road inventory of CPG is provided in Table 2. Table 2: Road Inventory

Street Priority Road Class

Total Lane Length (kms)

1 Main Arterial Roads/Downtown 268

2 All Remaining Bus

routes/Commercial/Industrial/Collector 290

3 Residential 683

Total 1,242

Timeframes

The snow policy of CPG sets the priorities of snow clearing operations in the order of the street system so that resources are deployed to roads of higher priority first. The expected timeframes for completing the snow clearing operations are not specified in the policy. To assist CPG in determining reasonable timeframes to complete plowing each priority of streets, the timeframes of other municipalities in Alberta, Saskatchewan, and Manitoba are summarized in Table 3.

Table 3: Comparison of Snow Removal Timeframes

Category Calgar

y Edmonto

n Lethbridg

e Regina

Saskatoon

Winnipeg

Brandon

Priority 1

(P1)Arterials

24 hours

36 hours

24 hours

24 hours 12

hours 24

hours 24

hours

Priority 2

(P2)Collectors/ Bus Routes

48 hours after storm


24 hours

after P1


36 hours

after P1


24 hours after P1

Priority 3

(P3)Residentials

4 days after P2

5 days after P2

72 hours

after P2

No timefram

e

72 hours

after P2

60 hours after P2

24 hours after P2


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As shown in Table 3, the timeframes are different in each municipality. It is difficult to estimate the timeframes for CPG required to complete each category of streets because timeframes can be influenced by many factors. The key influencing factors are as follows:

Operating budget

Availability of equipment and personnel

Road inventory and structure of each street category

Weather conditions/patterns and annual snowfall

Snow policy Based on the consideration of the above factors, the overall analysis of the documents and information collected, the results of the staff interviews regarding past performance, and the current operating budget for snow and ice control, the recommended timeframes for CPG are shown in Table 4.

Table 4 Recommended CPG Timeframes

Street Priority Road Class

Recommended Timeframes

Expected Plowing Time

1 Main Arterial Roads/Downtown 48 hours after

storm 2x 12-hour

(night) shifts

2 All Remaining Bus

routes/Commercial/Industrial/Collector 48 hours after

storm 2x 12-hour (day) shifts

3 Residential 4 days after P2 8x 12 hour (day and

night) shifts

The expected plowing time is estimated based on a combined fleet of City forces and rental equipment, and crews working on a 12-hour shift instead of 10-hour after a snowstorm. Crews will return to the normal 8-hour shift after plowing is complete. The combined fleet consists of a total of 10 graders and 16 loaders. The timeframes are estimated to respond to an average 10-15 cm snowstorm. Longer timeframes will be expected for extreme snowstorms. Priority 1 streets will require 2 night shifts to complete since they must be plowed at night due to high traffic volume of these streets during the day and the preference of performing snow hauling at night for enhanced safety and productivity. Priority 2 and 3 streets can be plowed either day or night time. Because residential streets have less straight and open streets and more driveway entrances to clear than Priority 1 and 2 streets, the timeframe for Priority 3 is longer than other priority streets.


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Priorities

Although the snow policy identifies the main arterial roads and the streets and lanes in Downtown Central Business District in the first priority, crews are currently directed to work in Downtown exclusively the first night whenever plowing of Priority 1 streets begins. This approach leaves the conditions of main arterial roads unimproved until the second night, or when the streets in Downtown are cleared. A preferred approach to scheduling plowing priorities is to tackle main arterial roads and key business districts at the same time. This approach ensures the conditions of the main arterial roads are improved to enable vehicular traffic to flow efficiently and safely after the first night of plowing, and to facilitate the operations of the businesses in Downtown, when resources are allowed. Since the main arterial road system carries the majority of the traffic volume, some of the main roads are the primary routes to and from Downtown. It is important that these main arterial roads are included in the priorities for snow clearing on the first night. End-of-Storm Conditions

CPG has a set of clearly defined end-of-storm conditions in the snow policy. The streets in Downtown are assigned the highest standard, to achieve bare pavement. All other priority streets are to be treated to various thicknesses of compacted snow surface. Parking Restrictions for Snow and Ice Control Operations

CPG’s snow policy includes winter parking restrictions. It also has a detailed heavy snowfall declaration procedure for snow events that predict snowfalls exceeding 20 cm over the ensuing 24 hours. CPG’s Parking and Traffic Bylaw (No. 6056) defines the general parking restrictions for snow removal operations. Snow and ice control operations are best performed at night when the traffic volume is at the minimum. CPG does not have a Snow Route bylaw in the snow policy to provide strong support to keep all higher priority roadways open and safe for better snow and ice control operations during the night. For comparison purposes, the City of Winnipeg bans parking on streets designated as Snow Route from December 1 to March 31 between 2 am and 7 am. The City of St. John’s prohibits parking on Snow Routes 24 hours from December 1 to March 31. The City of Moncton bans parking on any street, including its Snow Routes, from December 1 to April 15 between midnight and 7 am. Without a Snow Route bylaw, the efficiency of snow and ice control crews is negatively impacted. Salt Management Plan

In response to the Code of Practice for the Management of Road Salt, CPG took positive actions to develop a detailed Salt Management Plan in the summer of 2006. The Salt Management Plan was subsequently adopted in November 2006. Responsibilities of implementing the Salt Management Plan by positions are idenfified in the Plan. It is CPG’s


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intention to implement the recommendations and in compliance with the Code requirements. The progress of the Plan’s implementation status needs to be monitored. One of the requirements of the Code is to provide a commitment or endorsement of the Salt Management Plan at the highest level of the organization. It would be appropriate to reference the Plan in the CPG’s snow policy that the City adopted the Plan. Snow and Ice Control Operations Manual

CPG has developed standard operating procedures on snow clearing and hauling, pre-wetting and anti-icing. Several areas, such as snow and ice control decision making, and enforcement of parking restrictions, are not yet developed in the standard operating procedures. The last time the existing procedures were updated was 2005. They need to be updated to reflect changes in the snow policy and road inventory and to ensure there are no gaps between the policy and actual service delivery. As a best practice, the standard operating procedures should be updated annually. Although CPG does not have an official Snow and Ice Control Operations Manual, the majority of the key components have been developed. There are no ongoing training programs to update or refresh Streets staff on snow and ice control policy. CPG does not have a snow seminar developed to educate elected officials, service call center staff, and key stakeholders on the snow policy and scope of services provided by the City. If developed, the Operations Manual will be a good training manual for this type of seminar. OPPORTUNITIES FOR IMPROVEMENT

Industry Best Management Practices Current Program Status

Opportunities for Improvement

CPG has an up-to-date snow and ice control policy approved by the appropriate authority.

Yes

The policy covers the full range of topics expected. Partial

Salt Management Plan should be referenced in the policy to reflect that the endorsement of the Plan is committed at the highest level of the organization.

Level of Service is defined in terms of priority and timeframe.

Partial Expected completion timeframes should be defined based on resources and operating budget.

Priorities of snow clearing are clearly defined. Partial Priority of plowing main arterial roads and streets in Downtown needs to be reviewed.

CPG has a Snow Route Bylaw to prohibit on-streets parking on main arterial roads, bus routes, and central business district streets annually.

No Snow Routes should be developed.


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CPG has an up-to-date standard operating procedures for snow and ice control approved by the appropriate authority.

Partial

Existing procedures should be updated. Standard operating procedures on making decisions on snow and ice control, enforcement of parking restrictions, and the maintenance of snow disposal sites should be developed.

CPG has an up-to-date Salt Management Plan approved by the appropriate authority.

Partial The implementation status of Salt Management Plan needs to be monitored.

CPG has an ongoing training program to update and refresh Streets staff on the snow policy.

No Annual refresher training should be provided to Streets staff.

CPG has developed a snow seminar for elected officials, service center staff, and key stakeholders to educate them on the snow policy and services provided.

No A snow seminar should be developed and provided to the target audience as required.

CPG has compiled an up-to-date Snow and Ice Control Operations Manual approved by the appropriate authority.

No A Snow and Ice Control Operations Manual should be compiled by staff for the approval of Director, Operations.

RECOMMENDATIONS

Reference and include CPG Salt Management Plan in the Snow and Ice Control Policy to reflect that the endorsement of the Plan is committed at the highest level of the organization.

Define expected completion timeframes for snow clearing in the snow and ice control policy based on the timeframes recommended in this report.

Review the snow clearing priority of Priority 1 streets for the first night of snow clearing and hauling operation with the objective of optimizing resources, productivity, and level of service.

o Assess the vulnerability of the transportation network to determine main routes that are susceptible to drifting and hazardous driving conditions and identify the top critical routes in Priority 1 streets.

o Solicit input from key stakeholders, including elected City officials, representatives from business and industry sector, City transit, and emergency services providers.

Develop and include Snow Routes in winter parking restrictions policy.

Assign a team to monitor the implementation status of Salt Management Plan.


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Provide Streets staff with annual refresher training on the snow policy.

Develop and provide a snow seminar for the target audience of City officials. Use the Snow and Ice Control Operations Manual (once created) as the reference document for the seminar.

Update existing Standard Operating Procedures to reflect changes in the snow policy and an up-to-date road inventory.

Develop Standard Operating Procedures on making decisions on snow and ice control and enforcement of parking restrictions.

Compile a Snow and Ice Control Operations Manual for the approval of the Director, Operations. The Manual should include the snow and ice control policy, a complete set of Standard Operating Procedures, standby foreman schedule, and contact list of Streets employees for after-hours call-outs .

EQUIPMENT

INDUSTRY BEST PRACTICES

Snow and ice control service is a critical activity that demands quick response and availability of equipment and personnel based on levels of service. It requires a large capital investment to acquire and deploy sufficient equipment to achieve municipalities’ desired LOS. Due to the fact that weather conditions are unpredictable and municipalities generally cannot afford to purchase all required maintenance equipment, the use of a mixture of strategies is often the best approach for municipalities to provide snow and ice control services cost effectively. Strategy

A mixed strategy uses private contractors to supplement a municipality’s own forces and fleet on an as-required basis and maintain the control to manage winter maintenance with in-house resources. This strategy allows municipalities to sustain a balanced level of staffing and reduce fixed equipment inventory costs. An effective mixed strategy depends on the reliable availability of private contractor equipment with qualified operators, a trusting working relationship, and a fair, sustainable contract agreement that mutually supports the business interests of both parties. Equipment

Snow and ice control operations are very equipment dependent. Based on our experience, we would expect a city the road inventory of CPG to have a winter fleet of three graders, three loaders, six to eight sander/plow trucks and three to four sidewalk machines. This fleet is required to perform daily routine winter maintenance, such as


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sanding and salting, addressing service requests, and spot plowing. Spot plowing is a small plowing operation aimed at improving localized snow and ice conditions as required. Effective snow and ice control operations require equipment that is properly operated by qualified operators, reliable, well maintained, meets the specifications and functionalities of the organization’s needs, and is replaced in a timely fashion, based on appropriate replacement cycles (i.e., ones that minimize asset total lifecycle cost of ownership). Rental Equipment

Contractor rosters based on price alone often fail to provide a municipality with the newest, most capable equipment. Newer equipment should be given a “slotting advantage” over older equipment. For example, where the bid prices for the rental of a 2012 and a 2006 grader are $140 and $130 an hour, respectively, the older vehicle would be used more frequently. If a City gives a grader that is five years or less old a 10 percent slotting advantage, the 2012 grader will now be valued at $126 ($1140 x 90%) and will move ahead of the 2006 grader.

Other municipalities have used the slotting advantage method for hiring rental equipment for over 30 years, and it has proven very effective. For example, the City of Winnipeg’s 2014 slotting price advantage rates for rental equipment is shown in Table 5.

Table 5 Slotting Advantages

Year of Manufacture Slotting Price Advantage

2011 or newer 30%

2008-2010 25%

2005-2007 20%

2002-2004 15%

2001-1999 10%

1998 or older 0%

The more limited the available rental equipment resources, the more important it becomes to establish competitive rates and even provide retainers when necessary. Where resources are scarce, municipalities should establish a separate hourly rate just for private graders working during a full plowing operation. Graders that are available during a storm will be paid at a higher pre-determined, fixed rate. After the cleanup is finished, the normal bid rate resumes. The hourly rate determination should be based on the provincial guidelines for rental rates reported in the “Blue Book” that is published annually by the BC Road Builders & Heavy Construction Association.


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Other municipalities use a guaranteed equipment availability concept that takes on a different form of seasonal minimum payment. Every year a fixed number of rental graders and loaders are paid for a specific number of hours per piece of equipment per month at the snowstorm rate from November to March. Only the newest graders and loaders are selected for the guaranteed payment scheme. If the contractor’s guaranteed equipment is not called out for the month, the contractor is nonetheless paid for 30 hours of usage for making sure this equipment is available for a City’s use. If his equipment works, say, 10 hours in the month, the 10 hours would be deducted from the 30 hours guaranteed payment for that month. If his equipment works more than 30 hours, there is no payment for the guaranteed equipment. A final option that works for many municipalities is a winter maintenance contract. This is an alternative service delivery option to award a contract to a qualified contractor that has the experience, equipment, qualified operators, and expertise (both management and site supervision) to provide a municipality with specific snow and ice control maintenance service within the timeframe specified in the contract. Usually the compensation is so much per lane kilometer based on the work required within a pre-determined geographic area. A penalty is imposed if the contractor does not complete the work on time. This option is viable for communities that have the capacity with enough qualified contractors to bid on snow contracts. FINDINGS

City of Prince George Equipment

Based on average completion timeframes, the estimated plowing equipment requirements for a full plowing operation are shown in Table 6.


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Table 6: Plowing Equipment Requirements

Priority

Completion Timeframe

Total Plowing Equipment

Requirements

City Equipment

Rental

Equipment

Priority 1 Streets 2 x 12-hour shifts

(night shift) 10 graders and 16 loaders

5 graders and 3 loaders

5 graders and 13 loaders


(day shift)


(day and night shifts)

Total 12 x 12-hour shifts

Current City equipment for use in winter maintenance is summarized as follows:

5 City-owned graders (3 have wing plows) and 2 John Deere graders were leased on a monthly basis in January 2014.

3 loaders and 1 load plow (for lanes).

8 tandem-axle sanding trucks (all are equipped with underbody plow, front plow and pre-wet system; 5 have wing plows).

1 single-axle truck equipped with underbody and front plow.

1 truck fitted with an anti-icing tank (11,000 litres).

1 Bombardier tracked sidewalk plow (fitted with material trailer and pre-wet system).

2 MT-style, rubber-tire sidewalk plow (fitted with material trailer and pre-wet system).

1 slide-in anti-icing tank (6,800 litres).

1 Ice Buster.

1 Kodiak loader-mounted snow blower.

With the exception of graders, CPG’s snow clearing fleet is within the recommended size. CPG has five graders that are used for snow clearing, two more than the recommended requirement. CPG does not have a reliable supply of rental graders to supplement the City forces for snow and ice control. This is the main reason why CPG needs to own and run five graders in the winter, despite the fact that the majority of graders sit idle in the summer.


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Condition Assessments

CPG Fleet provided a list of 17 units that are used primarily in the snow removal and

sanding operations for inspection to gain some insight to the level and quality of

maintenance that the unit has received. The follow units were inspected during our site

visit:

Table 7 Inspection List

The list also provided us with brief commentary from the Shop Supervisor as to the major

issues with each unit. The units were inspected in the shop, in the yard where the unit

was parked, and in one case, on the job where the unit was working. The detailed

condition assessment is attached as Appendix 1.

Inspection Process

The inspections were conducted using generalized component lists developed for each

group of equipment. Precise measurements using standard tools and gauges were not

done as that level of detail was not requested or necessary for this purpose. Ordinarily

the recent repair history of each unit would be considered and commented upon in this

type of assessment but unfortunately the data that was presented was found to be

unreliable and incomplete and was therefore not used.

Unit # Year Make and Model Type

7280 2004 COLPRON SPREADER(4552) Towed Sander


7287 2002 COLPRON SPRDR TRLR(4007) Towed Sander

2626 2007 STERLING LT9500 T/A DUMP Dump Truck T/A


4827 2006 CAT LOADER 938G S II Loader



4842 2006 VOLVO L110 LOADER Loader

4819 2006 JD 410G BACKHOE Backhoe

4820 2006 JD 310SG BACKHOE Backhoe

5011 2007 CAT 160H GRADER Grader

5012 2007 CAT 160H GRADER W SN/WNG Grader

5013 2006 VOLVO G970 GRDR Grader

4549 2005 MT TRACKLESS Sidewalk Machine

4552 2009 MT6 TRACKLESS Sidewalk Machine

4007 2003 BOMBARDIER Snow Cat


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External factors contribute to vehicle condition. These factors help place the results in

context and may have an effect on future operations and replacement schedules.

Vehicle Storage. All of the CPG vehicles and equipment that we observed are stored

outside without cover. This can have a deleterious effect on the equipment and may

accelerate the wear. For example, hydraulic hoses that are continually exposed to

intense sunlight often wear more quickly due to weather checking and cracking. Over

time these hoses tend to seep oil or break prematurely. CPG should consider

examining ways to provide some weather protection when equipment is not in use.

Another example is using simple tarp covers for sanding equipment. For larger units,

CPG may consider a covered storage barn. It may also be beneficial to organize some

process at the end of the snow season wherein operators are engaged in cleaning

and preparing equipment for storage during the summer months.

Misuse of Vehicles. When vehicles and equipment are used inappropriately it is likely

that the units will suffer a high failure rate, multiple repeat repairs, and a shortened life

cycle. It is understandable in occasional emergency situations that vehicles and

equipment be misapplied to alleviate a certain situation. However if the misapplication

is chronic, the owner has every reason to expect high repair bills, equipment failures,

and shorter life cycles. One such case is the use of the graders for ice cutting. The

shop indicated that wear on the moldboards and rotation circles was excessive

however they continue to try to use the equipment the same way with the same results.

CPG should examine other means of ice cutting such as using a blade attached to the

grader ripper or heavy dozer blades mounted to the loaders.

Operator Maintenance. In most fleet operations, the equipment/vehicle operator has

defined responsibilities to perform some types of minor maintenance (such as daily

greasing) and to ensure that the unit is properly cleaned during heavy use. The failure

to perform simple daily maintenance almost always leads to premature wear of critical

parts and/or excessive wear due to corrosion. Also, when pre and post-trip inspections

are only cursory, small problems can blossom into major problems in short order. In

some of the equipment such as the sidewalk sanders, it was fairly apparent that the

corrosion was due to a low level of cleaning to remove salt. CPG should explore the

possibility of engaging operators at the end of the winter season to thoroughly clean

equipment and ensure it is stored properly until the next snow season.

PM Compliance. When PM schedules are not adhered to for whatever reason,

vehicles and equipment eventually suffer major problems. The intent of Preventative

Maintenance is to inspect and service key components to ensure that problems are

resolved in a timely manner. When shops are backlogged or have an excessive

number of PMs that are overdue, it is a given that the units have accelerated wear

and tear that has not been addressed. The CPG shop admitted that many of the units

were overdue for PM services due to more pressing repair needs. As such, equipment


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problems have gone undetected until the unit fails and comes in for repair. Thus

problems that could have been detected and addressed while still minor issues have

blossomed into more expensive repairs and higher downtime.

Deferred Repairs-When obvious problems are not addressed in a timely manner or

the owner chooses to put off the expense for whatever reason, it is almost a guarantee

that the equipment and vehicles will deteriorate prematurely. Fleets that chronically

defer maintenance and repairs to save a dime now will almost always have to spend

dollars later on. The prime example of this situation can be found on the backhoes

that were inspected. Although the shop contends that the excessive wear was due to

the loading of dump trucks during the winter season, this did not explain why the hoe

portion of the units was loose and worn out. The pins and bushings were severely

worn and should have been replaced- those repairs were continually deferred until the

entire unit was failing and became too expensive to repair.

Although the above topics may seem to be “common sense” and easily avoidable, our

inspections of the vehicles indicate evidence that these factors have impacted the

condition of the vehicles. This statement is not intended to indict any particular aspect of

the CPG operations or fleet shop. Rather, it is to lend context to the overall findings of the

inspections.

The following findings group the equipment into the following categories:

No Life

These units are completely worn out and the wear is so extensive that refurbishment is

useless. Units in this category should be replaced.

7280-Towed Sander-badly corroded, repairs too extensive, poor operator

maintenance. Units were not properly cleaned or stored.





4819-Backhoe-major components worn out, too much deferred maintenance, too

expensive to refurbish.

4820-Backhoe-very poor condition, too much deferred maintenance, already

scheduled for replacement in 2014.

4549-Sidewalk Machine-poor condition, Unit has had extensive in-house

modifications that are not appropriate. Excessive “roading” has accelerated the wear


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and tear on the unit and contributes to the operator complaints. CPG should re-

examine the process for clearing sidewalks and applying salt.

4552- Sidewalk Machine-poor condition. Excessive “roading” has accelerated the

wear and tear on the unit and contributes to the operator complaints. CPG should re-

examine the process for clearing sidewalks and applying salt.

4007-Snow Cat-unit is falling apart, poor maintenance in the past, bad application.

Tracks are not usually the best application on pavement in that the twisting of the unit

during turns and other maneuvers causes extreme stress to roller/drive system.

Extended Life – High Cost

These units have potential to be refurbished at high cost but well less than the cost to

replace. Potential is to gain more than five additional years life. Work should be performed

by qualified vendor.

4827-Loader-some hydraulic hose replacements, some pins and bushings, may need

brakes, worst case engine top end.

4828-Loader-most pins and bushings, engine appears weak, test hydraulic pump,

may need brakes.

4842-Loader-bucket and boom pins should be replaced, test hydraulic system and

transmission, worst case engine top end.

5012-Motorgrader-rotation circle and moldboard need extensive repairs or

replacements, tires, some hydraulic hoses.

5013-Motorgrader-unit will need pins and bushing throughout, engine should be

tested, tires, some hydraulic hoses.

Extended Life – Moderate Cost

Units in this category are heavily worn but could be refurbished at a moderate cost to

extend life at least five years.

5011-Motorgrader-unit has already had extensive repairs to rotation circle but could

use slightly more, moldboard is badly damaged but is tight, engine should be tested

but low hours suggest no repairs may be needed.

2626-Tandem Dump Truck-possible engine overhaul, bed should be replaced,

dashboard should be replaced after different mounting for radio, rear tires (converted

to other use).

2627-Tandem Dump Truck- possible engine overhaul, bed should be replaced,

dashboard should be replaced after different mounting for radio (converted to other

use).


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No Action

Units in this category are high use but in good condition at present and should be operated

for at least one more year before re-evaluating.

4829-Loader-Although unit has high hours it appears to be in good condition. Engine could be tested for condition however at present time it appears to be able to run at least one more year.

Rental Equipment

The shortage of contractor graders is the bottleneck that significantly restricted CPG’s capacity to perform snow clearing last winter. Despite 14 contractor graders registered on the rental equipment list, only one contractor grader came to work for the City from December to February. The contractor then left to work for another client after February. To cope with the situation, CPG had to lease two graders and train two operators to supplement their fleet. Even with the two leased graders, the total number of graders was still three below the recommended 10 required for undertaking a full plowing operation. The community of construction equipment contractors surrounding Prince George has gone through drastic changes over the years. The interview results of the two private contractors indicated:

There is fierce competition to meet demands for construction equipment in Northern British Columbia, especially in logging and mining industries, this depletes resources available in CPG.

The companies’ owners are getting close to retirement age. They are likely to either scale back their operation or let someone take over the business. Both contractors indicated they are thinking of retiring in a few years.

Replacement of graders is expensive.

Once owners have sold their graders, the supply pool is likely to see a permanent loss, as equipment may not be replaced.

It is difficult to find qualified, reliable operators in the area.

Increased operating costs make it more difficult to stay in business.

In the past, CPG had provided a retainer contract to a grader contractor to guarantee commitment of a grader with two operators for one winter season. CPG currently does not offer retainer contracts.

One grader contractor felt that CPG’s decision making on hiring snow and ice services contractors is reactive and not timely. As a result, instead of waiting for the decision, contractors may have opted to work for other clients.


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Many of the issues listed above are outside of CPG’s span of control in that there is little it can do about market factors in the area. The last two bullet points, however, deal with CPG procurement practices and can be controlled and changed if desired. The current CPG rental equipment bidding system is unsustainable for the purpose of obtaining a reliable supply of rental equipment in the long run. Some considerations with the equipment rental system are: 1. In general, newer equipment is more productive, fuel-efficient, versatile and capable

than older equipment. Because newer equipment tends to provide better operator comfort, ease of operation and safety, operators prefer to operate newer equipment. In an operating environment where it is difficult both for CPG and rental companies to recruit and retain qualified operators, this is a real advantage. The current rental equipment bidding system is not effective in attracting operators with new equipment. For the dump truck category, CPG’s rental equipment ranking is solely based on bid price submitted by contractors. The contractor with the lowest bid price is placed first on the call-out list. As a result, contractors with lower bid prices are hired first and laid off last. Contractors with newer equipment usually have higher bid prices. The only factor other than price used to rank contractors is an age clause where vehicles older than 20 years are placed at the bottom of the list.

This systematic weakness in the City’s rental equipment procurement process may not have been a problem during the years when there was enough equipment available to keep the system viable. However, as old equipment is retired and new equipment contractors choose to work elsewhere, the problem has now become more critical and unmanageable. This has happened to the grader classification.

2. CPG has no reserve list of contractors available to them on retainer to respond to a snow event. Presently, CPG has to compete with parking lot operators and other private businesses that pay a higher hourly rate than most of the contractors’ low bid rates. CPG had awarded a retainer contract to a grader contractor six years ago but discontinued the practice.

3. Outsourcing a portion of the snow clearing operation would make good operational

and economic sense for CPG since the majority of the plowing equipment required is supplied by private contractors that are hired on an as-required basis. This is, of course, based on the assumption that outsourcing achieves cost-savings, provides reliable and quality snow clearing service, and enhances CPG’s ability to meet the level of service. The areas that are considered good candidates for outsourcing are the areas that are farthest from CPG’s works yard on 18th Avenue. With shorter travel time to service areas closer to the yard, the City forces can be more efficient to deliver their service to these areas.

The severe shortage of rental graders available for CPG makes it very challenging to fully explore the option of outsourcing. If the grader shortage is a strong indicator of the market capacity of very few potential snow contractors looking for work in Prince


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George, there may not be enough competition in the market to ensure CPG getting a fair and competitive contract price. Even if CPG could get a competitive price for a couple of years, it is uncertain if the City will continue to get a competitive price in the long run unless there are more players participate in the market. For this reason, current market conditions make the feasibility of a outsourced solution unlikely for CPG.

1. OPPORTUNITIES FOR IMPROVEMENT



CPG uses a mixed strategy to use private contractors to supplement its own forces and fleet for winter maintenance.

Yes

CPG has a reliable supply of private equipment that can be hired on as required basis.

Partial A strategy to ensure an adequate supply of rental graders should be developed.

CPG’s winter maintenance fleet is within the range of a city the size of CPG.

Yes

CPG’s winter fleet is in good condition for snow operations tasks.

No Fleet renewal and reconditioning will improve vehicle availability.

CPG has an effective, sustainable rental equipment procurement system.

No

A strategy to improve the sustainability of the rental equipment bidding system should be developed. A seasonal minimum guaranteed payment to secure the rental graders should be considered.

RECOMMENDATIONS

Change the rental list system by including a “slotting factor” which adjusts for the age of the equipment offered. Include other qualitative factors in structuring the rental list.

Offer a premium rate for grader rentals that occur during a snow event to secure more contractors to work for the City. Set that rate based on provincial guidelines, age of equipment, and local factors.

Consider a seasonal minimum guaranteed payment or a retainer to secure committed grader contractors to work for CPG.

Invest in fleet renewal or reconditioning as per the specific recommendations of the condition assessments.


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OPERATIONS MANAGEMENT

INDUSTRY BEST PRACTICE

Operations management in snow clearing and ice control is concerned with overseeing, planning, and controlling the process of operations in the delivery of snow and ice control services. It involves ensuring that service delivery is efficient in optimizing the use of equipment, people, materials, technology, shifts scheduling, and work tracking to achieve the desired LOS. An effective management process for snow and ice control operations should be structured to include the following elements to meet the LOS:

Winter preparation calendar.

Winter shifts coverage.

Work tracking.

Scheduling of Snow Clearing Operations.

Control of materials.

Making snow and ice control decisions.

Enforcement of winter parking restrictions.

Winter Preparation Calendar

Effective winter maintenance requires a considerable planning effort prior to the winter season. A winter preparation calendar is a good tool to identify all pre-winter activities and assign roles and responsibilities to ensure the required tasks are attended to prior to winter. The calendar should be shared among people who are part of the winter preparation team, i.e. Streets Supervisor, Foremen, Fleet Supervisor, and Trainers. The required winter preparation tasks are shown in Table 8.

Table 8: Winter Preparation Tasks

Winter Preparation Tasks

Inspect and repair winter equipment

Review and update winter maintenance information on City website.

Inspect all streets to ensure all conditions hazardous to snow and ice control are reported and repaired, e.g. high manholes that could damage a blade

Review and fill winter shift personnel vacancies.

Review and update all snow plowing and sanding routes

Schedule winter training and equipment refresher courses.


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Confirm weather service provider Update contact list and information.

Update Standard Operating Procedures Inspect snow disposal sites and initiate maintenance activities as required.

Initiate spreader mounting and calibrate spreader controller

Order and stockpile winter maintenance materials.

Confirm availability of rental equipment Implement winter shifts.

Winter Shifts Coverage

Winter shifts coverage should support a municipality’s level of service and ensure efficient use of personnel resources. If operating budget allows, the winter shifts coverage should be 24/7 around the clock to ensure winter maintenance personnel are always monitoring road conditions and performing winter maintenance tasks as required. Work Tracking

Work tracking is the process of reporting and keeping track of work activities and any operational concerns that arise during a work process. In the context of snow and ice operations, municipalities must have a detailed work tracking system to record where individual crews worked, the work they did, who did it, the time taken to do the work, and a mechanism to capture any operational issues, such as the location of a manhole collision, property damage (potential claims concerns) and equipment breakdown for review. As work tracking can prove exactly when and where crews worked, it helps management deal with potential liabilities and claims issues that are related to snow operations. The best practice of work tracking is the use of computerized work management system and Geographic Information System technologies to record and track work done by employees daily. In the absence of a computerized system, municipalities should use a paper-based tracking system. Scheduling of Snow Clearing Operations

Snow clearing involves a large number of City and private personnel and equipment working together under pressure with the objective to achieve the LOS as quickly and efficiently as possible. Municipalities must have an effective scheduling methodology to plan and complete plowing routes. The sequence of plowing, level of service, average daily production, available equipment, and streets inventory are all inputs to the development process of detailed plowing schedules. Control of Materials

A variety of winter maintenance materials is used for snow and ice control operations throughout the winter. Good control of materials must be maintained to ensure the consumption of materials is monitored and timely re-stocking is completed so that materials never run out mid-storm.


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Making Snow and Ice Control Decisions

Municipalities must know the current and potential weather conditions for snow and ice control operations. Best practices in snow and ice management require:

Predicting the character of snowstorms and pavement conditions.

Selecting an appropriate treatment strategy.

Making a time-sensitive decision to respond to the snow event.

Implementing it in a timely fashion.

Winter maintenance is resource intensive and often strains maintenance budgets. Considerable preparations, planning, organization, decision making, operational knowledge, and evaluation are required to ensure the best use of resources. Making timely and proper decisions on winter maintenance operation can improve services and reduce costs. Transportation Association of Canada (TAC) and Federal Highway Administration (FHWA) emphasize the importance of using Road Weather Information System (RWIS) to support decision-makers’ judgment. An effective snow and ice decision making process should use the RWIS to improve efficiency and effectiveness. Road Weather Information System is a weather forecasting system developed to provide the weather characteristics and the prediction of pavement conditions for winter maintenance. A key component of RWIS is the use of pavement sensors to monitor pavement temperatures. RWIS has been used for over 30 years by road and airport authorities around the world to improve the accuracy of decision-making. RWIS technologies integrate weather data and pavement conditions and provide weather information in the road environment specific to snow and ice control operations. Snow and ice control decision-making should be based on pavement temperatures rather than air temperatures. Area-specific contract weather forecasting service is more accurate and timely. To maximize the benefits of RWIS, contract forecasting service with RWIS capabilities should be used. The best practice in the snow and ice decision making process should include the following steps:

Install pavement sensors at strategic locations and implement RWIS technology to monitor weather and pavement conditions.

Subscribe to a reputable weather forecasting contract service.

Assemble and analyze information about the nature and characteristics of the anticipated snow event.

If necessary and available, consult the contract meteorologist for additional weather information.


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Estimate when and where the event will begin, its extent, and severity.

Decide whether or not to initiate a treatment, when to start it and what type of treatment to apply.

Be proactive. Make the decision.

Monitor roadway and weather conditions once initial treatments are applied. Pay attention to pavement temperature and changes in precipitation type and intensity.

Evaluate treatment effectiveness, determine when, or if, they should continue, stop, or alter the treatment.

Conduct a post-storm assessment

An understanding of pavement temperature forecasts and trends can improve the accuracy of decision making. All personnel involved in the decision making process should be trained on weather forecast interpretation, RWIS, and Salt Management Plan. These training programs apply to the positions of Manager of Transportation, Streets Supervisor, and Streets Foremen.

Enforcement of Winter Parking Restrictions Policy

A parking restrictions policy must be well understood by the public, have an appropriate penalty mechanism that fits its purposes, and be effectively enforced for compliance. To promote good compliance, an awareness program should be provided to inform the public about the policy. Any time the City undertakes a plowing operation, the public should be reminded to observe the policy. This may be accomplished through news media coverage, the City’s website, email blasts, and/or notifications through social media such as Facebook and Twitter. FINDINGS

Winter Preparation Calendar

CPG does not use a work calendar for pre-winter preparations. As a result, winter preparation tasks are not done in a well-organized manner. Some pre-winter tasks require resources from other departments to complete and it becomes difficult to coordinate the resources without a winter preparation calendar. Also, the roles and responsibilities of staff are not clearly defined, making it difficult to hold staff accountable for their roles. Winter Shifts Coverage

CPG’s snow policy commits snow and ice control operations to be available on a 24-hour a day basis, 7 days a week during the winter season. Full 24/7 coverage is important for


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winter maintenance as street maintenance crews are scheduled to monitor weather conditions and respond to road conditions around the clock. The City of Calgary provides a full 24/7 winter maintenance coverage around the clock. The City of Winnipeg operates a full 24/7 winter shifts from November to April with winter maintenance crews scheduled to cover three 8-hour shifts daily, 7 days a week. CPG has 81% winter shifts coverage. As shown in Table 9, out of 168 hours a week, the City has service gaps totaling 32.5 hours when there are no Streets employees working. As a result, the City’s ability to physically monitor and respond to road conditions is weakened and the response time during these service gaps is longer. The 24/7 winter shifts coverage does not apply to Parks employees as they are not scheduled to rotational winter shifts. A service gap is a time slot within a 7-day work window when no one is assigned to provide snow and ice service. There are two service gaps in the City’s current setup. They are identified as follows:

From 22:30 Friday to 07:00 Saturday (8.5 hours) = 5% in a week.

From 22:30 Saturday to 22:30 Sunday (24 hours) = 14% in a week.

Table 9 Winter Shift Coverage

Shift Sun Mon Tue Wed Thu Fri Sat

Day ● ● ● ● ● ●

Afternoon ● ● ● ● ● ●

Night ● ● ● ● ●

The core of Streets consists of 50 City equipment operators, 5 Streets Foremen, 1 Supervisor, and a Dispatcher/Admin Support. All employees except the Dispatcher report to the Manager of Transportation. The City forces are supplemented with rental equipment hired on an “as required” basis. The Streets employees are utilized to staff three 8-hour shifts, Day/Afternoon/Night, covering from 22:30 Sunday night to 22:30 Friday night (5 8-hour shifts per person per week). A small crew made up of two equipment operators is added to the Day and Afternoon shifts Tuesday to Saturday. All Streets employees, including Foremen, are rotated to work through the three winter shifts on a 2-week or a 1-month rotation basis. The 5 foremen are assigned to the three 8-hour shifts as follows: two on days, one on afternoons, and two on nights. A Standby Foreman is assigned on duty to monitor weather and road conditions, and respond to emergency calls that come in after hours during the week. He will assess


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situations and decide if additional resources are needed. The use of a Standby Foreman is necessary for after-hours service response, especially during weekends when there is less employees working. The Standby Foreman is paid 2 hours per day, 7 days a week, for standby duties and overtime, if required, for call-outs. The Standby Foreman system should continue as it can reduce unproductive callouts of personnel. When responding to a major snow event, CPG does not utilize its crews to the fullest to shorten the completion timeframe. Crews are typically scheduled to work extended 10-hour shifts whenever a full plowing operation is called for, usually during and after a major snow event. They will work weekends as operationally required. Whenever a full plowing operation is required, the extended 10-hour shift effects the Day and Night shift only. The Afternoon shift stays intact to work their 8 hours from 14:30 to 22:30. Some of the Afternoon shift employees could be reassigned to Day shift to fill vacancies and work the overtime as required. CPG should move to a 2 x 12-hour shifts model that is proven more efficient and productive to respond to snowstorms. The temporary 12-hour shift is not difficult to implement as it does not require additional equipment or personnel. The incremental overtime costs would be offset by a shorter cycle time and the benefits of getting the streets cleaned quicker. The three 8-hour regular shifts resume after the plowing operation is complete. Assuming plowing begins on a Sunday night, a 12-hour schedule for plowing Pririty 1, 2, 3 streets is shown in Table 10.

Table 10 12-Hour Shift

Shift Sun Mon Tue Wed Thu Fri Sat

Day

12-hour ● P 2 ● P 2 ● P 3 ● P 3 ● P 3 ● P 3

Night

12-hour ● P 1 ● P 1 ● P 3 ● P 3 ● P 3 ● P 3

CPG has a good system to manage overtime. Overtime in Streets is administered in such a way that it is equally shared among employees, where possible. Employees who want to work weekends or during statutory holidays are required to sign a call-out sheet to indicate their availability.


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Work Tracking

The work tracking system that CPG uses for snow and ice operations is ineffective and lacking in necessary detailed information. Individual crew activities are summarized in a one-page daily report that captures the equipment units, employees, and assigned work areas without detailed locations. Most of the work assignments are provided by Foremen verbally at the beginning of the shift. Additional instructions and directives are given through face-to-face conversation or a two-way radio system. This may make it easier for experienced operators to find their routes, if they are familiar with the areas they work; however, it could become very challenging for new operators who have not learned their routes yet. At the end of the shift, staff are required to mark their finished routes on a large erasable transparent fiberglass board with the City map behind it. There is one individual map to track work progress for each activity, namely, sanding trucks, graders/loaders, and sidewalk machines. The current work tracking method presents the following deficiencies:

It is difficult to organize and prioritize work in detail in each work zone.

Information marked on the fiberglass map may not be accurate as it is difficult to remember what one has done after 8 or 10 hours.

Once the information on the fiberglass map is erased for a new day, the information is lost.

There is no traceable paperwork to support work accountability and performance measurement.

It makes it difficult to prove exactly when and where the work was performed, which could be extremely important for resolving potential legal issues and investigating damage claims, especially when there are private contractors working in the same area.

As the majority of the instructions are related to locations and routes to be covered, a paper map with the routes highlighted would be an effective tracking tool. CPG should develop a work tracking system that includes the following:

An individual set of route maps prepared ahead of time for each category of priority streets. Sanding and plowing will have separate sets of maps developed.

Foremen may alter the routes but use the same map to indicate changes.

A signature box is provided on the back to verify who does the work and the routes covered.

At the end of a shift an employee indicates where he finishes on the map and completes the form. The employee writes comments, such as the location where damage may have happened, on the form.

Foremen collect and check the route map at the end of shift. The foreman on the next shift can review the information, if required.


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Employees can still mark their completed routes on the fiberglass wall map to provide a “big picture” of the work progress. A generic route map form is shown below.

Scheduling of Snow Clearing Operations

CPG’s residential snow clearing operation lacks detailed planning. Scheduling snow-clearing operations is very complex. CPG is a city that is quite spread out for its population. The City has a total of 1,241 lane kms of paved roadways, of which 55 percent or 683 lane kms are residential streets. When plowing residential streets, CPG schedules crews to follow the 5-day garbage collection calendar so that streets are plowed prior to collection day. The intent is rational and logical to minimize the conflict between snow clearing equipment and garbage collection trucks working in the same areas. The potential of garbage carts damaged by snow equipment is significantly reduced. The residential snow clearing operation is intensive and time sensitive. As there are more equipment and personnel involved in residential plowing than for garbage collection, more planning and coordination is required for snow clearing. The focus of scheduling the plowing of residential streets is about determining the quickest way to plow all the

Route Map No. East – 2A Priority 1 Zone 3 Route 2

Total 50 Lane Kms. Date:____________________________________ Operator Name:___________________________ Equipment Unit: ___________________________ Material Used:

Sand: ___ Salt: ____ Liquid Deicer:____

Shift: Day____ Afternoon ____ Night ____ Comments:_______________________________

Operator Signature_________________________ Routes Completed: Yes ____ No ____ Foreman Signature: ________________________

Routes Highlighted on Map

Map


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residential streets in each garbage collection zone in the shortest time, instead of optimizing the time to collect garbage in the City. Therefore, significant scheduling adjustments are required. Without the support of a good work tracking process, it is difficult to determine the average daily production of plowing crews. In the absence of a detailed plowing schedule and working under the constraints of the garbage collection cycle, crews could encounter situations where they are bumping into each other. Streets could be missed unknowingly, until reported by residents. The City does not currently utilize Geographical Information System (GIS) technology to develop schedule plowing routes. Like CPG, other municipalities schedule the plowing of residential streets to follow five garbage collection zones – Monday to Friday and complete plowing in 60 hours (5x 12-hour shifts). For example, the City of Winnipeg appointed a taskforce prior to implementing the 60-hour plowing schedule and developing a set of plowing schedules for each of the five collection days. A plowing schedule indicates the routes with the starting location highlighted in a map and the total plowing distance to be covered by a crew within a 12-hour shift. It took the taskforce ten months to complete the schedule to effectively coordinate 36 plowing crews following the garbage collection zones. The success of the taskforce is based on the following factors:

Strong input from foremen who have intimate knowledge and experience about their local areas

Ongoing meetings with contractors to get their feedback and commitment to follow the plowing schedules

Ability to use daily production data from work tracking system

Ability to use GeoMedia application to analyse information and produce plowing maps.

Control of Materials

CPG has good control of winter materials. Foremen are responsible for monitoring the consumption of winter materials and determining if re-ordering is required. The layout of the public works yard makes it easy for staff to monitor the inventory level of materials. The Dispatcher/Admin Support staff compiles monthly usage reports and looks after re-ordering of materials. Making Snow and Ice Control Decisions

It is very challenging and difficult for CPG to make good decisions on snow and ice operations. CPG currently does not have access to road weather information system (RWIS) technologies or subscribe to contract-weather forecasting service for winter maintenance. Geographical differences throughout Prince George makes it difficult to obtain accurate weather forecasting. Supervisors, Foremen, and Dispatcher have access to Canadian weather websites and the City’s Waste Water Treatment Centre which provides the City with snow


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accumulations during the day. Reliance on public weather information means CPG is very ineffective in making proactive and timely decisions on snow and ice control operations. CPG is currently not getting the full benefits of its own weather station. The City built its own weather station at Vellencher Road north side of the city for less than $20,000. In addition to meteorological data, the station includes permanent pavement sensors that were installed 18 inches below pavement surface at the top of Foothills Boulevard at Vellencher Road. The real-time pavement temperatures and weather data are integrated with the City’s Supervisory Control and Data Acquisition System (SCADA). The station is not currently used as the instruments need calibration. The City had in the past used other weather forecast services but discontinued them due to inconsistent weather forecasts. CPG has the capability of measuring pavement temperatures using non-contact instruments. Four of the sanding trucks are equipped with truck-mounted infrared road temperature sensors. Foremen are provided with hand-held infrared laser thermometers to check pavement temperatures. The infrared sensors are not as effective as the permanent pavement sensors as they can only be used on exposed bare pavement. If properly and regularly calibrated, the pavement sensors are the preferred method for measuring pavement temperatures. The hand-held infrared sensors should be used as an alternate method. BC’s Ministry of Transportation and Infrastructure (MOTI) maintains an RWIS network and subscribes to the commercial weather service of the Weather Network to maintain their Province’s highway system. The RWIS weather information is available online via a password-protected website. Provincial RWIS stations that are close enough to be valuable in tracking incoming weather and road conditions are located:

50 kms north of Prince George along Highway 97 (Summit Lake Stn. 34791).

150 kms south of Prince George along Highway 97 (Dragon Lake Stn. 42091).

In sharing the common goal of promoting public safety for winter driving, CPG should approach MOTI regarding access to the RWIS network and assess the feasibility of sharing RWIS information. Enforcement of Winter Parking Restrictions Policy

Vehicles in violation of the CPG’s winter parking restrictions bylaw are subject to a $50 ticket and/or may be towed. The public may call the City at 250-561-7600 for the latest information on City Snow Removal Operations. Whenever the City is going to undertake a plowing operation, the City reminds the public of the parking restrictions through issuing news releases, media interviews, and media coverage. CPG should be more proactive to encourage the public to subscribe to a free email notification service on parking bans, post updates on the progress of plowing


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operations on the City’s website, and send out parking restrictions information to social media users. Interviews with Streets staff indicated that parked vehicles are a concern for winter maintenance. Parked vehicles become a more sensitive issue when the progress of plowing operations does not go as quickly as planned. The issue of parked vehicles obstructing snow removal reportedly continues to be concern over the years due to lack of consistent bylaw enforcement. Bylaw Services Division is responsible for enforcing the bylaws in CPG. The number of parking tickets and vehicles towed for impeding snow clearing operation for 2013-14 and 2012-13 are shown in Table 11. The numbers indicate that enforcement was not consistently performed for each plowing operation for the two years shown

Table 11

Winter Shift Coverage Based on the observations of Streets staff, the actual number of parking violations is much higher than the number of tickets issued. Staff indicated that better communication and coordination of plowing schedule and locations between Streets and Bylaw Services are needed to make the enforcement process more effective.

OPPORTUNITIES FOR IMPROVEMENT



CPG has a winter preparation calendar. No A winter preparation calendar should be developed.

CPG has a 24/7 winter shifts coverage. Partial Weekend crews to bridge service gaps should be scheduled.

CPG maximizes resources to respond to snow events.

Partial Extended 12-hour shift should be implemented.

CPG has a computerized or paper-based work tracking system.

Partial A detailed paper-based work tracking system should be developed.

Winter Parking Tickets Issued No. of Vehicles Towed

2013-14 210 124

2013-12 114 62


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CPG has an effective scheduling methodology to plan and improve plowing routes and schedules.

Partial Detailed plowing routes and schedules should be developed.

CPG uses pavement temperatures to make snow and ice control decisions.

Partial The pavement sensors and related weather instruments at the Vellencher Road weather station should be repaired and calibrated.

CPG subscribes to area-specific contract weather forecasting service with RWIS information.

Partial Area-specific contract weather forecasting service with RWIS information should be subscribed.

CPG provides all personnel involved in the snow decision making process with snow-related training.

Partial Streets Supervisor and Foremen should be provided with snow-related training.

CPG has good control of winter materials. Yes

CPG has an up-to-date parking restrictions policy for snow and ice control operations approved by the appropriate authority.

Yes

CPG has the ability to declare a special on-street parking restrictions for heavy snowfall events.

Yes

CPG’s winter parking restrictions policy is effectively and consistently enforced.

No

The enforcement protocol to support snow and ice control operations should be reviewed. Communication and coordination between Streets and Bylaw Services should be improved.

CPG has a public awareness program for winter parking restrictions.

Yes

CPG uses emails and social media to promote awareness of winter parking restrictions.

No Use of e-notification and social media should be developed for parking restrictions.

CPG uses City website to frequently inform the public on progress of plowing and status of parking restrictions.

Partial Snow-related information on the website should be reviewed and updated.

RECOMMENDATIONS

Develop a winter preparation calendar that identifies all tasks that need to be completed prior to winter, defines the roles and responsibilities of all responsible staff, and determines the schedule and process to coordinate and prepare the tasks.


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Schedule the 2-person Day and Afternoon (Tuesday to Saturday) crews to work Wednesday to Sunday and assign a new 2-person crew to cover the Night shift on weekends.

Move the current extended 10-hour shift to 12-hour shift to fully utilize equipment and personnel when responding to major snow events. .

Develop a detailed work tracking system. Develop the route maps for sanding and plowing individually for each category of the three priority streets.

Assign a taskforce to develop plowing schedules that follw the garbage collection calendar. Use Geographical Information System (GIS) technology to develop detailed plowing routes and maps. Crews must be spaced out to avoid bumping into each other in the zone. A mechanism should be developed to deal with situations when crews could not complete the zone as scheduled.

Calibrate pavement sensors and instruments at the Vellencher Road weather station.

Assign a single individual the calibration responsibilities. All related training and diagnostic tools should be provided to the individual to undertake the annual calibration and trouble-shoot operational problems during the winter.

Get quotes from several reputable weather forecasting service providers. Select and subscribe to area-specific contract weather forecasting service with RWIS information.

Provide Streets Supervisor and Foremen with snow-related training for winter maintenance decision making.

Have Streets and Bylaw Services to jointly develop an enforcement protocol of parking restrictions to support snow and ice control operations.

Have Streets to contact media and technical support staff to jointly develop a strategy to use e-notification and social media for winter parking restrictions.

Review and update snow-related information on City website. Assign the responsibilities to a single individual responsible for updating the information.

ICE CONTROL OPERATIONS


Municipalities must implement a balanced deployment of personnel, materiel, equipment, technologies, and strategies to achieve the 5 R’s to meet the LOS with the intent to minimize cost and environmental impacts. The 5 R’s are:

Right amount.


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Right material.

Right location.

Right time.

Right people (trained personnel). Snow and ice control strategies can be classified into the following categories:

Anti-icing (treatment before the snow event).

Deicing (treatment during / after the snow event).

Mechanical removal of snow and ice (plowing).

Traction enhancement (applying abrasives).

Combinations. Anti-icing

Anti-icing is a proactive snow and ice control strategy to prevent the formation of snow and ice bonded to a pavement surface by timely application of a chemical freezing-point depressant before a snow event. Proper use of anti-icing can:

Improve roadway safety.

Reduce the use of deicer.

Make plowing more effective and efficient. Like any snow and ice control strategies, anti-icing relies on the prediction of pavement temperatures and accurate weather forecast information to apply the liquid chemical in a timely fashion at the onset of a snow event. There are conditions under which the use of anti-icing is limited. Anti-icing is effective only when the pavement temperature is within the effective temperature range of the anti-icing chemical. Salt brine is best applied when the pavement temperature is above -7 C. Anti-icing with salt brine is not recommended for pavement temperature below -7 C or during freezing rain or sleet events. An effective anti-icing program requires:

Support of Road Weather Information System (RWIS).

Considerable judgment in making decisions.

Timely execution of anti-icing operations with equipment and personnel.

Knowing the limitations of anti-icing.


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Knowing what other strategies should be deployed if anti-icing is deemed ineffective for the conditions.

Green Building Operations Manual indicates that calcium chloride can leave an oily, slippery residue after use. The City of Winnipeg tested the use of liquid calcium chloride as an anti-icing chemical and found the surface slippery during the first hour of application. . Although liquid calcium chloride can work at lower temperatures than salt brine, many cities prefer using salt brine as the anti-icing chemical for lower cost and better availability. Depending on the delivery destination, the cost of liquid calcium chloride can be five times or more than that of salt brine. Federal Highway Administration’s recommended application rates of salt brine at 23% concentration by weight for pavement temperature between 0 and -7 C for frost and ligh snowstorm are 60 and 90 litres per lane kilometer, respectively, making salt brine more cost effective than calcium chloride. Deicing

Deicing is a reactive snow and ice control strategy that involves the application of a chemical to melt the snow and ice on pavement surfaces. Salt (NaCl) is the most common and cost-effective chemical among deicing chemicals. Salt is effective when pavement temperatures are between freezing point and -7 C. The use of salt is ineffective and not recommended when pavement temperatures fall below -7 C. Excessive amounts of salt are required at low temperatures. The best practice for salt application requires the use of proper spreader controller technology. Groundspeed-oriented electronic controllers on salt spreaders help to ensure that salt is applied at the set rate regardless of the speed of the truck being used to spread the salt, and that salt stops discharging when the truck is stopped. Spreading pre-wetted salt optimizes salt application. The controllers must be calibrated annually and recalibrated periodically to ensure that they accurately measure the exact amount of material used. The Salt Management Plan developed by individual municipalities should be followed and reviewed periodically to determine performance gaps and identify opportunities for improvement. Traction Enhancement

Applying abrasives is necessary to enhance traction when either of two conditions exist:

Temperatures are so low that use of deicing chemicals is ineffective.

Snow or ice is already bonded to the pavement surface and cannot be easily removed. Abrasives should not be applied to bare pavement as they will reduce the friction. The impact of abrasives is usually short-lived because traffic will rapidly disperse it. A small amount of deicer such as salt is usually mixed with the abrasives to keep the stockpile workable and free of lumps. The best practices of applying abrasives are:


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Use of the appropriate type of abrasives for the desired road conditions.

Pre-wetting abrasives to reduce material loss.

Selecting the appropriate application rate to avoid over-application.

Frequent field observations of road conditions to determine if application rate needs to be adjusted or re-application is required.

Pre-winter calibration of abrasive spreading equipment. Pre-wetting

Pre-wetting is the process of spraying a liquid chemical (salt brine or liquid calcium chloride) or a solid chemical such as salt or abrasive (sand) to enhance their effectiveness. When solid salt is sprayed with a liquid chemical, it jump-starts the formation of brine faster than would occur without pre-wetting, making the melting process work quicker. Another key benefit of pre-wetting is significant reduction of material loss resulting in cost savings. When salt and sand are coated with liquid chemical, the chemical helps to make them adhere to the surface better and last longer, instead of bouncing off the pavement surface. When pre-wetting sand, the pre-wet liquid adds weight to the sand and cushions it as it hits the surface. The pre-wet liquid will partially melt the ice and allow the sand to become embedded in the ice layer. Calibration of Controller Equipment

The best practice for winter maintenance calls for the equipment and hardware to be calibrated before the winter and recalibrated periodically as required. The effectiveness of applying ice control chemicals and abrasives for winter maintenance relies on the accurate calibration of on-board equipment and hardware instruments installed on each sanding truck. Calibration is an essential procedure to measure the amount of material applied to the roadway at various travel speeds. Because each sanding truck operates slightly differently, each truck should be checked and calibrated separately for each type of material used, i.e. salt, sand, fracture, and liquid deicer. A single individual should be assigned the calibration responsibilities to ensure control equipment is calibrated annually before the winter. Field investigation is required if there is any radical deviation in spreader output compared to the control setting. Calibration prevents under and over application of materials, and therefore could reduce costs and mitigate unnecessary environmental impacts. FINDINGS

Anti-icing

CPG initiated an anti-icing program using liquid calcium chloride in 2000. The anti-icing operating procedure was developed to specify when, where, and how much liquid calcium


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chloride should be applied in the City. The application rate outlined in the operating procedure is 125 litres per lane kilometer. The anti-icing program ran for two years and was discontinued due to the City not having accurate weather information and the high cost of applications. The anti-icing cost was $5,000 to $10,000 per application. Deicing

CPG has two salt storage sheds with a combined capacity of 300 tonnes. The City used 2,198 tonnes of salt in 2013. Past salt usage is given in Table 13. There was a salt ration imposed by the salt supplier last winter due to the high demand for of salt in Western Canada. The ration alert did not affect the City’s salting operation. All of CPG’s spreader trucks are equipped with groundspeed controller to regulate the amount of salt applied on the roads, based on the speed of the truck. Unfortunately, the controller and pre-wetting equipment does not work due to equipment not calibrated. CPG’s Salt Management Plan identifies many improvement objectives in the areas of:

Salt application methods.

Salt storage methods.

Record keeping.

Snow Disposal. In the areas we investigated, many of the desired improvements have either partially been implemented or not implemented at all. The results are shown in Table 12.

Table 12 Salt Management Plan Status

Improvement Objectives in Salt Management Plan

Implemented

Implemented but not being done

presently

Not Implemented

Salt Applications Methods 2 areas 1 area 3 areas

Salt Storage 1 area -- 5 areas

Snow Disposal -- 1 area 6 areas

Record Keeping 1 area 3 areas 5 areas

Training on Salt Management

-- 7 areas --


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Traction Enhancement

The abrasives that CPG uses are sand with 2% salt, and winter fracture (crushed rock) with 2% salt. Fracture is exclusively used in Downtown streets for air quality controls. Used abrasives are picked up by sweepers during spring cleanup. The on-board spreader control system was not calibrated. The amount of winter maintenance materials used for the last 5 years is shown in Table 13. The usage data of sand and winter fracture show significant fluctuations, which indicate either poor record keeping practices and/or substantiates the inconsistency of applying substances without calibration.

Table 13 Fracture and Salt Use

Year Sand c/w 2% Salt (tonnes)

Winter Fracture c/w 2% Salt

(tonnes)

Salt (tonnes)

2009 10,442 2,689 2,304

2010 5,332 2,159 n/a

2011 6,218 7,650 2,234

2012 n/a 8,902 2,195

2013 1,468 2,930 2,198

Pre-wetting

CPG had implemented pre-wetting with all the sanding trucks equipped with tanks and on-board equipment capable of doing pre-wetting with liquid calcium chloride. The program ran for a few years with success. However, it stopped the last couple of years because the pre-wetting equipment was not maintained and calibrated. Spreading abrasives without pre-wetting would result in significant loss of materials, especially when applying materials on high-speed roadways. Calibration of Controller Equipment

CPG uses the IQAN-based electronic spreader control system manufactured by Parker Hannifin Corporation. The system has not been calibrated for two years. The staff that were trained to do the calibration were promoted out of the job. Since then, there has not been anyone trained to perform calibration. Another process variable is that different operators share the use of equipment. Individual truck operators must manually control the settings to apply materials to conditions. This is not in compliance with the CPG Salt Management Plan. As a result, the current process of applying ice control materials in CPG is inconsistent, ineffective, and difficult to manage.


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OPPORTUNITIES FOR IMPROVEMENT



CPG has developed and implemented an up-to-date ice control program.

Partial

Anti-icing and pre-wetting equipment should be maintained and calibrated. The anti-icing chemical should be changed to salt brine. The anti-icing and pre-wetting operating procedures should be updated and implemented.

CPG has developed application rates for all winter materials.

Partial The application rates for all winter materials should be checked and updated.

CPG has fully implemented a Salt Management Plan.

Partial The Salt Management Plan should be followed up to determine how outstanding improvements can be implemented.

CPG calibrates spreader controllers before winter annually.

No The spreader controllers should be calibrated annually.

CPG assigns the controller calibration responsibilities to a single individual.

No Dedicated individuals should be assigned the calibration responsibilities. They should be trained to perform calibration.

Continued field observations are made on material applications to detect deviations of spreader output from set rates.

No Field observations should be made on material applications.

RECOMMENDATIONS

Assess the conditions of the anti-icing and pre-wetting equipment. Repair and calibrate the equipment.

Use salt brine as the anti-icing chemical. Update the standard operating procedure of anti-icing and pre-wetting. Run pilot test to assess effectiveness of application rates for various conditions and adjust the rates as required.

Assign the calibration responsibilities to dedicated individuals. Provide them with all related training and diagnostic tools to undertake the annual calibration and trouble-shoot operational problems during the winter. Repair and calibrate spreader controllers annually. Recalibrate spreader controllers periodically.

Assign a team to oversee the implementation of Salt Management Plan. Identify resources and prioritize items for implementation.

Have Streets Foremen to make field observation on material applications and adjust the applications as required. Check field performance of ice control activities and enforce compliance of all ice control programs.


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TRAINING


To be effective in winter maintenance operations, municipalities must invest in snow-related training to enable employees to deliver snow and ice control services effectively and efficiently. Ongoing training should be provided to keep staff abreast of new skills and technologies. Training is an investment in human capital, and human capital is the most important asset an organization has. In a fast-changing work environment, best-run organizations invest substantially in training to ensure their workforce has the ability to respond quickly and reliably. For municipalities, the workforce responsible for snow and ice control operations is expected to do the same – respond quickly and reliably. Training benefits to employees include skill improvement, self-development, increased self-confidence, and a sense of growth. Training benefits to the organization include customer service through higher productivity, improved morale, lower costs, and stronger identification with corporate goals. A good training program should have:

A training needs assessment.

Training objectives.

Training program content that meets required objectives.

FINDINGS

Equipment Operator Training

There are no formalized equipment operator training programs that utilize full-time

trainers in CPG. All equipment training programs, with the exception of the Class 3 license

upgrade, are provided in-house through a peer training process. CPG’s peer equipment

training is provided by individual departments’ “Seconded Trainers” who are experienced

operators appointed to train new operators. The trainers are paid $0.70 an hour more

than their regular pay rate when doing training. There are 35 teams of Seconded Trainers.

Each team is assigned to a specific training program. Sixteen of the teams are related to

Streets operations.

The peer-training program is administered under Risk and Procurement. The Fleet Trainer coordinates the training with individual departments, oversees the Drivers’ and Operators’ Instructional Manual and operator orientation. He also provides refresher courses on operating safety during season changeovers. All training-related costs are incurred by individual departments. Once the trainee passes the initial one-on-one training, obtains the minimum hours of operating experience, and is deemed acceptable


45

by the trainer, the Foreman will have their input through field observations and determine if the trainee can graduate. The Fleet Trainer will do the final evaluation and certify the trainee. A Class 3 driver’s license with air endorsement is desired to operate winter equipment such as the tandem-axle sanding trucks, loaders, and graders. Truck operator trainees need to go to private driver training schools to get their Class 3 license training. The average cost of Class 3 training is around $3,000 per person. The costs of the training will be reimbursed to the trainees once they successfully complete the course and obtain their Class 3 license. If there were no more truck operator trainees available internally, an external posting would be issued to recruit sander truck operators that have the required license. The Seconded Trainers are important training assets to CPG. The competencies of the trainers are critical to the credibility of the program. The workload of Streets is high all year round. Scheduling of peer training is challenging for Streets employees. A mechanism to resolve conflict between training schedules and time away from work is crucial. The results of the staff interviews indicated that the quality of peer training in Streets is inconsistent among the trainers. Many felt that the overall training program is reactive to fill short-term vacancies only. There are not enough cross-trained equipment operators to perform diverse tasks when vacancies and absences occur. Snow-Related Training- Findings (cont’d)

CPG’s investment in snow-related training is inconsistent. In-depth snow-related training (hereafter referred to as training) is severely lacking for the last few years. For the period of 2002-4, CPG provided substantial training on ice control when the City implemented anti-icing and pre-wetting procedures. Streets staff were sent to Kamloops to attend snow and ice control and weather training. About 10 years ago, Streets used to schedule pre-winter “Think Snow Meetings” for all staff to promote awareness of standard operating procedures and encourage information exchange among senior and junior employees. This type of informal training meeting should be revived as it stimulates learning and is very beneficial in mentoring younger employees. Training was provided when CPG began to implement the Salt Management Plan in 2006. However, the priority of training continued to decline afterwards. None of the current Foremen have received any weather training. Recent high turnovers due to retirements in Streets has made it more challenging to keep up with training. As a result, substantial job knowledge and skills have been lost. CPG has recently implemented a succession planning program for internal staff. There has not been any formal winter training provided to the current supervisory personnel for the last few years. Winter maintenance is the primary responsibility of Streets employees in the winter. CPG should provide a comprehensive winter


46

maintenance training program that ensures Streets employees are knowledgeable and competent to carry out their duties. This review has identified many key areas that need to be improved through training, including:

Road Weather Information System and Decision Making.

Understanding Weather Forecast Information.

Pre-winter training on Standard Operating Procedures.

Anti-icing.

Pre-wetting.

Calibration of Spreader Controller.

Equipment Operator Training.

Salt Management Plan.

It is not likely that all staff will need the same level of training. The amount of training and the level of detail of training that is required by specific personnel will vary. CPG should conduct a training needs assessment and develop individual training plans for employees. OPPORTUNITIES FOR IMPROVEMENT



CPG has conducted a training needs assessment for employees.

No

A training needs assessment should be conducted. An individual training plan for Streets employees should be developed.

Provide employees with required training. No Snow-related training appropriate to individual’s responsibilities should be provided.

CPG has a well-established peer training program.

Partial The criteria and the process of recruiting trainers should be reviewed.

CPG provides equipment operators with crossing-training.

Partial More cross-training should be provided to equipment operators.

Provide trainers with ongoing support. No Seconded trainers should be provided with “Train the Trainer” training and advanced operating skills training.


47



Training is reflected in staff’s job description. No Training should be reflected in the job description of Streets staff.

RECOMMENDATIONS

Work with Human Resources to develop a mechanism to conduct a training needs assessment. Conduct the assessment. Develop an individual training plan for Streets employees.

Provide employees with snow-related training appropriate to positional responsibilities.

Estimate and prioritize training requirements. Determine training delivery plans and secure trainers. Prepare an annual training calendar.

Assess the needs for backup equipment operators of all equipment types. Provide equipment operators with cross-training in accordance with the requirements and priorities.

Provide Seconded Trainers with “Train the Trainer” and advanced operating skills training. Provide recognition to Seconded Trainers.

Get feedback from equipment trainees periodically on quality of peer training and take actions to address any concerns.

Reflect snow-related job knowledge and training in the job description of all Streets employees based on the results of training needs assessment.

Unit # Year Make and Model Type



7287 2002 COLPRON SPRDR TRLR(4007) Towed Sander






4842 2006 VOLVO L110 LOADER Loader

4819 2006 JD 410G BACKHOE Backhoe

4820 2006 JD 310SG BACKHOE Backhoe

5011 2007 CAT 160H GRADER Grader

5012 2007 CAT 160H GRADER W SN/WNG Grader

5013 2006 VOLVO G970 GRDR Grader

4549 2005 MT TRACKLESS Sidewalk Machine

4552 2009 MT6 TRACKLESS Sidewalk Machine

4007 2003 BOMBARDIER Snow Cat

Towed Equipment7280 7287 7293

Body ConditionRusty, corroded Rusty, corroded

Substantial

rust,cracks

HitchGood New New

TiresFair Mismatched tires Fair

SuspensionSagging, worn

Fair-no obvious

cracks

Worn, frame is

cracked in several

places

BrakesOperable Operable Operable

Wiring/Connectors

Some cracked

wires-fair

Some cracked

wires-fair

Corroded, wires

cracked

Hoses/FittingsSome corrosion Corroded Corroded, ruined

ControlsMinor leaks Minor leaks in box Leaking, operable

Operating SystemOperable Operable

Pre-wet rusted, fill

pipe broken

Notes

Unit is marginal-

will need major

work

Unit in marginal

condition-tires are

a problem

Unit in very poor

condition

Unit #

All three units in poor/very poor condition. Appears

operator maintenance is poor. Units not cleaned after

use.

HD Truck2626 2627

Log bookYes-up to date Yes-up to date

Meter236,640 237,992

Cab exteriorFair Fair-no damage

Dump Bed

Rusted, tailgate

hinge bad

Rusted through on

bolsters, poor

Frame

Good-no cracks

visible

Good-minor rust ,

no visible cracks

Suspension

Fair-front

suspension

appears worn

Good

Tires

Only 1/3 left on

driversGood

LightingAll operable All operable

WipersOperable Operable

Heater/DefOperable Operable

GaugesAll operable All operable

Cab Interior

Worn-Dash broken

badly-seat worn

out

Fair-seat

worn,dash broken

GlassGood

Cracked

windshield

Air SystemOperable Operable

Hydraulic System

Operable-some

leaks, slow

Operable-some

minor leaks

Engine CompartmentEngine oil leaks Minor leaks

Unit #

Notes

Basically ok-very

hard miles-worn

Shows its age-runs

ok

Both trucks are showing their age but

have been reasonably maintained.

Beds are the worst problem.

Loader4827 4828 4829 4842

Log bookYes-up to date

Up to date but

incorrect meterYes-up to date Yes-up to date

Meter13,717 15,578 13,176 13,085

Body Exterior

Fair-minor rust

around door,

engine cowling

damage

Surface rust, cab

rusted

Surface rust, one

fender damagedFair

Tires

Good-more than

50%Fair-less than 50%

Good but less than

50%

Good but less than

50%

Bucket Condition

Good-no major

damageGood/Fair Good

Good-no major

cracks or damage

Boom/Pins

Fair-some

looseness, grease

leaking

Very looseWear is not

excessive

Bucket pins very

loose-boom loose

Center Pins

Fair-grease

leaking, some playLoose

Fair-steering is

accurate

Poor-steering is

slightly wobbly

Hydraulic Hoses

Weather checked-

drooling oil

Worn-much

seepageGood/Fair

Weather checked-

only minor leakage

Quick Hitch (if appl)OK OK OK

Cab InteriorFair-seat is worn Very Worn Fair-seat worn Good

Glass

Small crack in

windshieldGood Good Good

GaugesAll Operable All Operable All Operable All Operable

Unit #

Hydraulic ControlsGood Fair Good Good

LightingAll Operable All Operable All Operable All Operable

Hydraulic Operation

Slow but all

functionalSlow but workable Good

Fair but all

functional

Engine CompartmentSeveral oil leaks Many leaks Dry Good

Notes

Machine wear is

what expected for

# hours

Unit in need of

extensive work incl

engine

Unit had extensive

work on trans, diff,

brakes

Fair condition for

the # of hours

Units definitely showing age, looks like some work has been deferred (pin

replacement) Could be salvaged with major refurb

Backhoe4819 4820

Log bookYes-up to date Yes-up to date

Meter8,811 8,535

Body Exterior

Fair-some rust,

dents

Rough-broken

hood, dents, rust

TiresGood Fair

BrakesOperable Operable

Front Bucket Cond.

Fair-shows much

usePoor-clamshell

Rear Bucket Cond.Good Fair

Boom/Pins (front)

Fair-getting loose

in some partsVery loose, sloppy

Boom/Pins (rear)

Loose, wobbly but

operable

Very loose, sloppy,

need replacement

StabilizersOperable-pads OK

Operable-pads

worn

Hydraulic Hoses

Chaffed, worn,

leaking

Very bad, chaffed,

leaking, weather

checked

Cab InteriorFair-seat worn Fair

GlassGood Good

GaugesAll Operable All Operable

Hydraulic ControlsFair Sloppy, Sticky

LightingAll Operable All Operable

Unit #

Hydraulic OperationGood/Fair

Poor-slow,

unresponsive

Engine CompartmentMinor leaks Wet-oil leaks

NotesTested w/ operator

Unit is due for

auction very soon

Both units badly worn however the

problems are not all use in the pit-Poor

maintenance practices

Motorgrader5011 5012 5013

Log bookYes- up to date Yes- up to date Yes- not up to date

Meter9,258 7,898 11,884

Body ExteriorFair Fair

Fair-a little rough in

spots

Tires

Good-more than

50%

Fair-less than 1/3

left

Poor-side walls

cracke badly-

recaps are poor

Rotation AssemblyRecently shimmed

Fair/Poor-loose,

wobbly

Fairly tight

considering use

Moldboard

Cracked several

times-shims look

new

Poor-very loose,

shims worn, many

cracks

Badly worn, shows

very heavy use

Center PinsFair Fair Did not test

Hydraulic Hoses

Good-only minor

seepage

Fair-some

seepage at

connections

Fair-some

seepage and

weather check

Cab InteriorGood Good Fair-seat is worn

GlassGood Good Good

GaugesAll Operational All Operational All Operational

Hydraulic ControlsGood-all tight Good Good

LightingAll Operational All Operational All Operational

Hydraulic OperationGood

Fair-slow but

works OK

Only minor check

but seems

functional

Wheel TiltFair-a bit sloppy Good Did not test

Engine Compartment

Slightly wet

otherwise goodSome seepage

Fair-minor

seepage

Unit #

Notes

Unit in Good/Fair

condition-has had

circle work done

recently

Unit needs

moldboard work

and circle repairs

Unit has been

used very hard

All three units have been used very hard and have suffered

a great deal of wear and tear

MT Trackless4552 4549

Log bookYes-up to date

Yes-up to date Unit

in shop for repairs

Meter4,914 6,710

Body Exterior

Poor-body damage

and rust

Poor-modifications

are rusting out

TiresFair

Fair-not factory

tires-high floats

Hydraulic Hoses

Fair-leaking in

places

Poor-many leaks,

hosed chaffed

HitchOK OK

Cab Interior

Fair-seat in poor

condition

Poor-very rough,

seat badly worn

Glass

Poor-windshield

badly clouded

Poor-windshield

scratched

Gauges

Did not work

properly when

keyed

Could not operate

Hydraulic ControlsFair Could not operate

LightingAll Operational Could not operate

Hydraulic Operation

Fair-hydrostatic

driveCould not operate

Engine Compartment

Poor-Radiator

badly clogged, oil

leaks

Fair-many small

leaks

Notes

Unit is in rough

shape

Unit has been

modified for other

work-

Both units are pretty rough and show a

lot of wear for the hours-may be bad

application

Unit #

Snowcat Unit #

4007

Log book

Yes-not up to date

or accurate

Meter2,593

Body Exterior

Poor-cab is rusted

along fron lower

floor

TracksGood

Rollers/Idlers

Very Poor-all

rollers worn-one

was falling off

Hydraulic HosesFair

HitchFair

Cab Interior

Poor-seat and

panel worn, loose

GlassGood

GaugesAll Operational

Hydraulic ControlsPoor-loose, worn

LightingAll Operational

Hydraulic OperationDid not operate

Engine CompartmentPoor-Oil leaks

Notes

This unit is in poor

shape and should

be retired

Annex B

FLEET SERVICES

BEST PRACTICE

REVIEW

for the

CITY OF PRINCE

GEORGE

July, 2014



Fleet Services Best Practice Review for the City of Prince George

TABLE OF CONTENTS

INTRODUCTION ............................................................................................................. 1

OVERVIEW OF CURRENT FLEET ................................................................................ 3

BEST PRACTICE EVALUATION .................................................................................... 8

ASSET ALLOCATION AND UTILIZATION MANAGEMENT ....................................... 8

Industry Best Practice ............................................................................................... 8

Findings .................................................................................................................... 9

Opportunities for Improvement ............................................................................... 10

Recommendations .................................................................................................. 11

ACQUISITION AND DISPOSAL ............................................................................... 12

Industry Best Practice ............................................................................................. 12

Findings .................................................................................................................. 13



OPERATIONS MANAGEMENT ................................................................................ 16


Findings .................................................................................................................. 17



INFORMATION MANAGEMENT .............................................................................. 20


Findings .................................................................................................................. 26



CUSTOMER RELATIONSHIP MANAGEMENT ........................................................ 28


Findings .................................................................................................................. 29




1

INTRODUCTION

Mercury Associates conducted a best practice review of the City of Prince George’s (CPG’s) fleet operations in order to identify opportunities to improve the City’s ability to provide fleet-dependent services to residents and taxpayers. Mercury Associates utilized a variety of information collection and analysis techniques including quantitative performance measurement, business process mapping and gap analysis. These techniques were used throughout the following steps: 1. Initial Information Request. The City was given a detailed checklist specifying the

types of documentary material (e.g., organization charts, policy and operating procedure statements, sample forms and reports) and quantitative data (e.g., operating budgets and actual expenditures, maintenance work order, vehicle meter readings) needed to conduct this snow operations review. Most of the material was received in late May with follow-up documents in June and July.

2. Kick-Off Meeting. A kick-off meeting was held May 26, 2014 to meet with City personnel and explain the methodology that we would be following. We also used this opportunity to learn more about the goals of interested parties within CPG.

3. Interviews. Following the kick-off meeting, Mercury personnel met with a full range

of City personnel including management, supervisors, shop personnel and fleet customers. The aim of the interviews was to confirm the details received in the Information Request and seek further information where necessary. The following interviews were conducted:

Administrative Coordinator, Transpo Cathy McCallum

City Manager Beth James

Court Coordinator Sean Baker

Customer- Deputy Fire Chief Blake King

Customer- Manager, Utilities Blake McIntosh

Director, Corporate Services Kathleen Soltis

Supervisor, Development Services Chrystal Lloyd

Director, Legal and Regulatory Walter Babicz

Director, Operations Bill Gaal

Dispatcher, Operations Cindy McDonald

Equipment Operators- Day Shift All

Equipment Operators- Afternoon shift Darren Sisson and Robert Waite

Fleet Administrator Dawn Russman

Fleet Trainer Guy Hudson

Grader Operator Dave Kidd

Manager, Arenas Wade Loukes


2

Manager, Asset Management Frank Blues

Manager, Bylaw Fred Crittenden

Manager, Financial Planning Kris Dalio

Manager, Human Resources Rae-Ann Emery

Manager, Parks and Solid Waste Dave Bradshaw

Manager, Risk and Procurement Ray Borgia

Manager, Transportation Flavio Viola

Mechanics All

Partsperson Greg Rogers

Project Manager Gina Layte Liston

Supervisor, Fleet Operations Robin Shaw-McLaren

Supervisor, Fleet Operations Terry Hawkes

Supervisor, IT Brad Frenkel

Supervisor, IT Peter Wilms

Supervisor, IT Craig Telford

Supervisor, IT Jason Spenrath

Supervisor, Operations Administration Mickey McFarland

Supervisor, Parks Sean Lebrun

Supervisor, Solid Waste Chris Bjorn

Supervisor, Street Mick Jones

4. Analysis. Mercury then compared the data and interview results from CPG with known industry benchmarks to identify opportunities for improvement and recommendations.

5. Documentation and draft report. The report which follows covers the main functional

areas of the fleet services review.


3

OVERVIEW OF CURRENT FLEET

The City of Prince George (CPG) owns a diverse fleet of 465 vehicles and equipment. The composition is typical for a municipal organization that offers a variety of services to customers. The following figure provides an overview of the vehicles by major type in CPG’s fleet.

Figure 1 CPG – Equipment Type

Fleet Services falls under the Manager of Transportation and has a variety of customers or client groups. The main customers include the normal range of Parks and Public Works groups as well as Fire. Police and Transit do not fall under the CPG fleet. The ‘other’ category, representing 16% of all assets includes mainly equipment that is not self-propelled.


4

The next figure (Figure 2) shows a summary of the fleet distribution by City Division or functional group.

Figure 2 City Divisions or Functional Groups

The number and percentage of vehicles allocated to each Department is not representative of the importance or value of the resources held by each. For example, Fire only has 7% of the total vehicles (by number) but the value of their assets is 28% of the overall total as shown in Figure 3 on the next page. Parks has 22% of the vehicles but they only represent 8% of the total fleet.


5

Figure 3 Fleet Value by Client Group

Fleet age is one of the most important factors influencing operating costs. Figure 4 on the next page shows the breakdown of the various types of vehicles with the average age per type reflected on the vertical axis.


6

Figure 4 Average Asset Age

The City’s fleet is significantly older than we recommend as a best practice. The overall average age of the fleet is 9.6 years, which means that the average actual replacement cycle is close to 20 years. This is exceedingly long for a mixed fleet and more than double standard industry practice. Even if we exclude the lift equipment (7) and trailers (25) in the fleet, the average current age is 9.3 years, which far exceeds industry best practice. To further illustrate the advanced age of the fleet, the next chart shows a distribution of vehicles and equipment by model year.

20

18

16

14

12 ,__ f--

~ .. ., ,.!:: 10 - f-- ,__ f--., "" <[

8 - - f-- f-- f--

6 f- f-- ,__ f-- f-- f-- ~ f-- f-- - f-- ~ f-- f--

4 f- ,__ I-- ,__ ,__ f-- f-- ,__ ,__ ,__ ,__ ,__ ,__ ,__ f-- I--

2

0

- f-- ,__ - - f-- ~ f-- - f-- f--

i f-- - f-- f-- ~

-

Equipment Type


7

Figure 5 Model Year

Not only are there a significant number of assets dating from 1999 and before, the purchasing pattern reflects a series of troughs and peaks. These spikes are difficult to budget for and most municipalities prefer a smoothed approach where year-over-year expenditures are consistent and predictable.

60

50

40

1/1 -; 1/1 ~ 30

0 #

20

10

0

.,,_o\q, f;:)" f;:)'1, f;:)", d" f;:)<-:, f;:)'o Q'- f;:)'o f;:)'1> .,_Cl "" .,_'1, .,_n, .,_I> <c'l, ,fl '1,(3 '1,(3 '1,(3 '1,(3 '1,(3 '1,(3 '1,(3 '1,(3 '1,C) '1,C) '1,C) '1,C) '1,C)

r;, '17 ci<:l

,i;

Model Year


8

BEST PRACTICE EVALUATION

We reviewed the City’s fleet management program policies, procedures, and practices in approximately 40 functional areas of fleet activity. The results of this evaluation serve as the foundation for specific recommendations for re-engineering or upgrading current organizational structures, staffing levels, facilities, and business processes, so as to reduce the costs and/or improve the quality and effectiveness of both fleet management and maintenance activities. ASSET ALLOCATION AND UTILIZATION MANAGEMENT

Industry Best Practice The goal of utilization management is to optimize or right size the number of vehicles in a fleet such that there are no more vehicles than required. This keeps fleet-related costs as low as possible without sacrificing productivity. Vehicle utilization can be expressed in terms of annual kilometers driven or hours of use for the vehicle. The kilometers or hours of use are measured and tracked in the Fleet management Information System (FMIS) to be able to verify that utilization targets are met. There are a number of best practices associated with fleet utilization management. First, a municipality should have a structured process for defining vehicle and equipment needs and for determining the most cost-effective means of meeting them. Organizations should understand the operational and cost impacts of alternative vehicle provision methods, including mileage reimbursement, vehicle pools, car rentals, and car allowance and be creative in crafting a strategy that incorporates the most cost-effective methods of meeting specific needs. Second, a municipality should have a standard method for determining utilization thresholds and a policy that applies across departments. Utilization targets should be in line with the function and operating environment of specific units in specific Departments. These targets often relate to a cost/benefit analysis of the point where it is cheaper to rent a vehicle for occasional use, or reimburse employees for the use of a personal vehicle, rather than own a lightly used asset. For passenger cars operating in Canada, this threshold is approximately 12,000 km/year. Naturally, there is specialized or emergency equipment needed by a municipality that might not meet utilization thresholds but which is essential. The utilization thresholds and consequences of not meeting them should be published in a formal fleet policy. Utilization studies cannot be done once and put away, as transportation needs change over time. A third best practice in this area is the conduct of an annual review of vehicle utilization focusing on identifying under-utilized assets and assessing their criticality to an organization. Organizations should adopt a methodology that identifies lightly used assets and then measures their criticality to the organization. Some questions to ask to determine criticality include:


9

How many like assets are available to perform this function?

If this vehicle is in the shop, how is it replaced?

What are the consequences of not having this vehicle? Once lightly used and less-critical assets are identified, organizations need to have strategies in place to deal with them. If an asset is absolutely critical despite being lightly used, it should be rotated to a higher-use area in order to balance utilization across the fleet. Other options for lightly used assets with high criticality are to share them or pool them amongst users. These recommendations should be solicited during the annual utilization review. In order to make this option palatable, organizations must put in place easy and cost effective processes for reserving and charging for pool vehicles. Even in organizations with control mechanisms in place, users sometimes find ways to justify retaining an asset that they do not really need. A fourth best practice aims to prevent this – utilizing a cost charge-back system and rates that create economic disincentives for agencies to hold on to lightly used vehicles. Findings We did not conduct a rightsizing study as part of this review; rather, we studied the fleet utilization policies and practices in effect at CPG. In interviews, all customers reported serious attention to utilization and a sincere intent to keep only the vehicles needed to perform their duties. Fleet size has not increased for many years and would have to be justified and approved at the Director level, subject to approval by Council. There are no written policies in this area. Following a recommendation from a MMK Consulting Fleet Financing Program Review in 2009, CPG conducted a fleet utilization review. CPG formed a working group who established utilization guidelines and reviewed all submissions from customer groups. The group separated full and part-time assets by hours with a usage total of 600 hours per year indicating a part-time unit and 1,400 hours per year a full-time unit. Vehicles with an odometer had to clock 12,000 kilometers per year to be considered a full-time unit. The retention of all vehicles or equipment that fell under the threshold had to be justified to the working group. The initial review, completed in 2012, identified six vehicles for sharing and five vehicles for elimination. The data in this review, however, was incomplete with the low utilization of many units being justified as the result of “incorrect meter reading.” There has not been an annual rightsizing review since 2012 and there are no written utilization policies. CPG engages in extensive reimbursement for business use of employee vehicles. They have adequate written policy that describes the reimbursement program. Their reimbursement program has three classes: 1. Frequent users. These users travel at least 3,000 km/year. They receive a monthly

flat rate (car is $305 and truck is $374) as well as a per kilometer rate that fluctuates monthly and a $30 monthly insurance fee.


10

2. Infrequent users. These users travel less than 3000 km/year. They receive $24/month

for cars and $30/month for trucks to offset additional insurance costs as well as a per kilometre rate that fluctuates monthly.

3. Mileage only – These users receive a per-kilometer rate only and are covered for business use under their personal insurance policies for up to six uses per month.

Users in the first two groups must submit proof of insurance to payroll every year. The rates were sanctioned in the MMK Consulting review in 2010 based on their comparison to similar municipalities. The monthly allowance is meant to cover approximately 60 percent of the lease amount of a vehicle. The written policy states that vehicles have to be safe and adequately maintained but does not go into detail about what this entails. Reviews of the program are done annually to ensure users meet the qualification thresholds. Managers have to justify the need for the allowances and it has to be approved by a Director. The requirement for a truck versus a car is based on the equipment to be carried and the operating environment. The reimbursement program was implemented in 1993 because of insufficient funds to replace City-owned vehicles. Users may decide to opt out of the program in which case the City would have to provide a vehicle. There were some concerns voiced in interviews that the reimbursement rates are insufficient and that more users may choose to opt out. This would put the onus on the City to provide work vehicles. Opportunities for Improvement



A standard method for determination of utilization thresholds and a centralized written policy for utilization.

Partial Improve utilization policy.

Annual review of vehicle utilization focusing on under-utilization to ascertain the actual need for low utilization vehicles.

Partial Conduct an annual utilization review similar to the 2012 study.

Rotate or pool low use assets. Partial Informal arrangements now in place should be formalized.

Users are charged for vehicle ownership and a management fee thus providing financial incentive to return unnecessary vehicles.

No Rental rate structure should act as a disincentive to ownership of low use vehicles.


11



Policy on cost effective alternatives for occasional transportation requirements, e.g. mileage reimbursement, vehicle pool, car rental, or car allowance.

Partial Improve the policy on reimbursement.

Cost benefit analysis to demonstrate when rental, reimbursement or ownership is the most efficient option.

No Conduct a rent vs own vs reimburse study of specific vehicle applications.

Recommendations

CPG should create a formal utilization policy in the Fleet Management Manual. This policy should describe utilization thresholds that can be empirically justified, the conduct of an annual utilization review and the procedures or options to deal with under-utilized assets.

Once formalized, an annual utilization review should take place with care taken to get accurate meter and odometer readings for all vehicles in order to reach valid conclusions.

CPG should establish service level agreements (SLAs) and memoranda of understanding (MOUs) between user groups in order to formalize pooling and sharing arrangements. For example, vehicles assigned to Streets for the winter months and transferred to Parks for the summer should be identified and their usage for these dual purposes monitored.

Users should be charged a rental rate that includes actual operating charges, a capital replacement portion and an administrative overhead fee. This may act as a disincentive to retaining lightly used vehicles. The administrative overhead fee should include a representative percentage of fleet management, FMIS and other administrative costs. Although not previously charged, the City plans to start assessing an administrative component in 2015.

The Reimbursement Policy should be improved by including a step-by-step justification for reimbursement in comparison with other options. Any request for reimbursement should include the annual cost for reimbursement and the annual lifecycle costs of the City owning the same vehicle.

A detailed cost/benefit analysis that compares reimbursement to rental to ownership should be undertaken for every new vehicle purchase request. In addition, a review of those already in the program should be done to determine cost effectiveness.


12

ACQUISITION AND DISPOSAL

Industry Best Practice Acquisition Process

Vehicle acquisition is the process of identifying the need for a new or replacement vehicle, creating specifications for the asset, conducting a RFP or tender process, evaluating bids, and bringing the new asset into the fleet. There are three main players in fleet acquisition in a municipal environment – the fleet management, the asset user, and the procurement organizations. Ideally the fleet management organization works collaboratively with fleet users to understand the type of vehicle needed to fulfill a job, and creates a vehicle selector or catalogue which identifies the standard vehicles and options available to fleet users. Users must be consulted in the process as they are the best qualified to describe what the vehicle needs to do. The more specialized the vehicles and equipment, the greater the need for collaboration between user groups and fleet management. Once a specification is created and agreed on, fleet management should require formal sign-off from the user signifying their agreement. There should be a formal process in place to identify the need for a new or replacement vehicle. All organizations should have a ten-year replacement plan and use it as the basis to identify vehicles due for replacement. Replacement should be guided by optimal replacement cycles to ensure that vehicles are not kept past the point where operating costs are unsustainable. Where fleet management and the user disagree about the need to replace or delay replacement of a vehicle, there should be a comprehensive study done of the impact of the delayed replacement of that vehicle on the operating budget. As a best practice, procurement should own and execute the RFP or tender process, including approval of the selection criteria (technical and pricing) and their respective weighting. The criteria and weighting should be published with the RFP to assist vendors in structuring their bids and make the evaluation process easier to follow. A collaborative approach between fleet management, fleet users and procurement is necessary in evaluation in order to rank the proposals and choose the supplier. The best arrangement is when procurement is accountable for terms and conditions, while fleet management is responsible for the technical components of the contract. In almost every vehicle acquisition, a performance-based RFP process is preferred over a tightly-written design specification and low-price tender. Fleet is accountable for the vehicle design, and as such, they do the quality assurance and quality control for the delivered vehicles. For a newly specified vehicle, equipment or upfitting, the prototype is examined thoroughly by fleet management and fleet users and deficiencies or sign-off are provided to the supplier. On receipt of the new vehicle, fleet management should ensure that administrative processes are followed to license the vehicle and enter it in the FMIS.


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Peak Period

Fleet management has visibility of all vehicles that are to be replaced and retired and ensures these vehicles are returned and marked in the FMIS as “to be retired.” Fleet manages the need for extra vehicles for peak periods by ensuring that new vehicles are ready when the peak period starts, and are delivered to fleet users on a timely basis, allowing users to keep the “to be retired” vehicles until the peak period is over. In addition to flexible replacement scheduling, fleet management should rent vehicles for peak periods if there are insufficient vehicles to meet the demand. In our experience, the peak period for an organization is predictable and is planned as a “program” run by fleet management. This means that fleet management works collaboratively with user organizations to identify the quantity and type of vehicles required, to ensure that safe and reliable vehicles are provided to them for a specified time period, and to retrieve the vehicles designated for retirement at the end of the peak period. Retention of these vehicles post peak period results in “fleet creep” and is to be avoided. Disposal

Well-run disposal or remarketing programs seek to:

Maximize the price of sale. The best in class organization leverages seasonality (e.g., spring) and may also do inexpensive repairs/touch-ups on the vehicles. As well, procurement does an RFP and holds contracts with the preferred auction companies.

Reduce the time a vehicle is parked waiting to be disposed of. The vehicle can rust, lose battery charge and diminish in overall value as it sits unused. Fleet management takes a lead role in salvaging useable items from the vehicle, getting the vehicle ready for auction, and transporting it to the right auction company. Fleet manages and tracks the disposal program and follows up with the auction company as required.

Reduce the cost of disposal in the organization. An efficient process enabled by the FMIS will go a long way in reducing the organization’s cost to dispose of a vehicle. In the case where the organization is very resource constrained or does not have the expertise, the remarketing process is outsourced. There are companies who specialize in the value chain of vehicle remarketing and the contract can be structured to pay the client up front for the vehicle, rather than waiting for the actual disposal to occur.

Identify alternative means of remarketing to possibly include trade-in or virtual auctions depending on the type of vehicle.

Return remarketing funds to the user organization as an incentive to take care of the vehicles under their care and control and dispose of them at the optimal time.

Findings


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CPG has recently reorganized and the responsibilities for acquisition and disposal have evolved since that time. Prior to October 2013, Fleet Services came under the Director of Corporate Services and had almost exclusive control over the procurement process. Although there was some consultation with users, Fleet made the final decisions. The responsibilities in these areas are currently in flux, but certain trends appear to have emerged. Acquisition

Responsibility for fleet acquisition now falls under the Director of Operations. Fleet Services is working to be more inclusive of users in the process. Since there is no formally documented process, the roles of each are still unclear. Customers have reported that Fleet had dictated vehicle replacement decisions in the past, ignoring actual requirements. One example cited was users asking for short box pick-ups and getting longer ones ill-suited for animal control. Even when users were consulted on specifications, they did not always get what they asked for, as there was no sign-off on the specification to indicate agreement. Cooperation appears to be improving, even in the short time since October. There are still issues, however, with the time required for vehicle procurement. There are often delays in getting replacements on time. For example, there are two garbage trucks due to be replaced in 2014. The specifications were finalized by the user in October and handed over to Fleet Services. The tender was just released so it is unlikely that the City will receive new trucks this year. This also applies to a new bucket truck for Parks where the specification is still under review. Users reported confusion and unfamiliarity with the acquisition process. With the organizational changes, many are not sure where responsibilities now lie. There is no formal, written procedure that would clarify this. The two Fleet supervisors have been asked to look at policies and procedures that currently exist and identify gaps. Disposal

The bulk of disposal or remarketing is done through sales at Ritchie Brothers Auction. The returns are low and the money does not go back to the users for fleet renewal but goes to a central Mobile Equipment Replacement Reserve (MERR) fund. Disposal is not happening in a timely manner, as there have been no vehicles sold since October. Again, there is confusion between the interested parties as to what their responsibilities are in this function.


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Acquisition and disposal policy and procedures are well documented and understood by all.

No Develop detailed policies and procedures for acquisition and disposal.

The roles of Fleet, the user and Procurement in the acquisition process are clearly defined and understood.

No Delineate responsibilities between the participants in the acquisition process.

Customers are given ample input into the specification process and sign-off on the final specification.

No Increase user involvement and ensure agreement by sign-off on the final specifications.

Disposal is timely to maximize dollar return. No Reduce delays to remarketing of replaced assets.

Peak period requirements are managed as a program by Fleet Services

No Only retain replaced assets as approved and managed to cover peak periods.

Proceeds from remarketing are returned to users for fleet renewal.

No

Ensure remarketing proceeds are returned to the user for fleet renewal as an incentive to care for and replace vehicle at the optimal time.

Recommendations

Develop an acquisition policy that includes:

o Justification for a new or replacement vehicle

o Responsibilities of all entities involved in the acquisition process

o Development and sign-off of specifications

o Timelines for acquisition

o Procedures on receipt of the vehicle

Develop a remarketing policy that describes:

o Approval for disposal

o Disposal methods

o Key performance indicator (KPI) targets (days to sale, $ return on value)

o Return of proceeds to users

o Timelines to maximize seasonal benefits


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Assign Fleet Services to manage a program so vehicles due for replacement are retained to cover for peak periods. Ensure these vehicles are disposed of at the end of this period.

OPERATIONS MANAGEMENT

Operations management consists of a wide variety of fleet management-related functions that are largely administrative in nature. These include vehicle and operator licensing, accident review, and driver records checks. Industry Best Practice Vehicle Registration and Licensing

Fleet management should be responsible for obtaining license plates for new vehicles and replacing any lost or stolen license plates for all fleet user client groups. The centralization of this function provides for a single point of contact for both the Provincial Licensing Authority and fleet user client groups for all matters related to vehicle registration and licensing. A copy of the ownership is provided with the vehicle and the original is filed at fleet management in case there is vehicle theft or loss of the ownership slip from the vehicle. Fleet ensures that the license plate numbers are accurate in the FMIS and adds, deletes, or modifies the license plate number as appropriate. Fleet management also ensures that the Provincial Licensing Authority is advised of any significant changes to the vehicle (e.g. colour change, addition of a trailer, etc.). All license renewals and distribution of renewal proof and valid insurance slips are the responsibility of fleet. Fleet management also returns the license plate from a written-off or retired vehicle to the Provincial Licensing Authority to maximize the refund. Drivers’ Licenses

User groups must ensure that drivers have a valid driver’s license and any other certifications or specialized licenses required to operate a vehicle. Close cooperation between user client groups, fleet management, health and safety, and human resources organizations is essential to ensure that the tools and processes are available and well communicated. Regular (biennial) verification of all drivers’ records is best practice and signed consent from all drivers is necessary. Accident Review

All accidents should be recorded regardless of the extent of loss. A review committee should meet regularly to determine the cause of accidents and make a determination of preventability. This review committee should also recommend remedial training or disciplinary actions for at-fault drivers.


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Organizations should have a demerit system in place to identify high-risk drivers and take remedial action with regard to these drivers prior to a serious accident or infraction. Demerits should be awarded for a full range of unsafe driving practices, as well as for preventable accidents. A simple example of a demerit system defining typical infractions, points awarded and consequences appears below with some common point allocations.

Figure 6 Example: Demerit System

Organizations should keep thorough records of accidents including the date, time of day, driving conditions, driver’s name, causes and costs. A review should be done annually as a minimum to identify trends in any of these areas. Commercial Vehicles

Commercial fleets operating in British Columbia must adhere to the Commercial Transport program which monitors safety on the highways, promotes public safety and protects infrastructure through the development of standards and policies for heavy commercial vehicle weights and dimensions. One of the most important requirements is the pre-trip inspection of regulated vehicles. Inspections are mandatory and must be properly recorded. Defects must be reported immediately and the vehicle is grounded should any safety-related defect be identified. All defects are recorded and sign-off is required when the defect is repaired. Findings Responsibility for fleet and driver qualifications is shared between Risk and Procurement and Fleet Services. The Manager of Risk and Procurement has a Fleet Trainer who looks after a variety of safety and training related functions. This individual’s responsibilities extend to National Safety Code compliance, trailer hook-ups, permitting for size and weight, fleet mini-audits, pre-trip inspection training and compliance and driver testing.

Infraction (within 5-yrs.)

DUI

Reckless driving

Speeding (first offense)

Speeding (subsequent offenses)

Seatbelt

-- Action

12 0 Incentive or recognition

8 1-6 Remedial training

1 >4 Not eligible as a new hire 4

>7 Not eligible for a driving

2 position


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Procurement has delegated the authority to Fleet to license and insure vehicles on behalf of the City. Vehicle Registration and Licensing

The responsibility for vehicle licensing and registration has been centralized. The ultimate responsibility lies with the Director of Legal and Regulatory Services who has authorized two representatives in Fleet Services to carry out this function. Both Fleet supervisors are authorized to license and insure City vehicles. Driver’s Licenses

CPG is very proactive in its programs to ensure drivers are properly licensed on the equipment they need to operate and in the performance of regular checks of driver abstracts. The Fleet Trainer coordinates a training program for drivers and equipment operators relying on seconded trainers to mentor new operators. The City has a detailed Driver’s Handbook that covers all of the main information that a driver needs to know. The Fleet Trainer reviews this Handbook with new employees and has them sign as having read and understood the material. Employees also provide signed permission to have their driver abstracts checked. Driver abstract checks are done annually. Risk and Procurement requests the records from the Provincial authority, Insurance Corporation of British Columbia (ICBC). The Fleet Trainer reviews the records and then goes through any issues with individual supervisors. There is no internal demerit system in place. Accident Review

There is an Accident Review Committee (ARC) in place who reviews crashes to identify cause. The Committee consists of the Manager of Risk and Procurement, the Fleet Trainer, Health and Safety and two Union representatives. Upon receipt of an accident report, the Fleet Trainer reviews the file and determines whether the accident was preventable. If so, the case is reviewed by the ARC. Their mandate is to identify accident causes only; they do not assign blame and do not recommend sanctions against the driver. The driver and the immediate supervisor are present for the review. The ARC looks at three areas – training, equipment and operations – and evaluates whether something in any of these areas needs to be changed. Discipline, if warranted, is handled outside of the accident review process and is at the discretion of supervisors. It is applied according to a progressive discipline system established by Human Resources. The City experiences approximately 30 to 40 crashes per year. It maintains a record of these accidents in an Excel spreadsheet and tracks the types of vehicles involved and the causes. Direct costs of accidents are charged to the user organization. There is no annual review or report of these findings. A full risk management review was beyond the


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scope of the current project so we did not look into accident frequency rates or causal analysis. Commercial Operators Vehicle Registration

CPG has not had an external Provincial audit of their commercial vehicle compliance. In our interviews, supervisors report that pre and post-trip inspections are done regularly by 85 percent of personnel, done sporadically by 10 percent of personnel and not done by 5 percent of personnel. Drivers fill in defect sheets as irregularities are noted. A weakness in the current system is that mechanics are not signing off the defect sheets as repairs are made. This can cause issues as drivers might take a vehicle believing a repair has been made when it has not. Opportunities for Improvement



Organization has a central point of contact for all matters related to vehicle licensing.

Partial Authority with Procurement, delegated to Fleet.

Drivers are required to give written consent for the organization to access Driver Abstracts and these records are verified at least twice per year.

Partial Written consent is given but checks could be done more frequently (biannually).

A Driver demerit system is used to identify and monitor high-risk drivers.

No Adopt an in-house demerit system.

All accidents are investigated regardless of severity in order to determine cause and preventability.

Yes

An Accident Review Committee assigns preventability and cause to accidents.

Partial Committee is not used to identify preventability.

Total costs of accidents are captured in the FMIS and regular reports are generated for user client groups.

No

Creating and sharing accident statistics would be beneficial.

CVOR vehicles are clearly identifiable in the FMIS and all CVOR requirements are completed and documentation is audit-ready

No Improve sign-off on defect sheets.


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Recommendations

Transfer the authority for vehicle licensing and insurance to the individuals (in Fleet Services) responsible for performing these tasks.

Increase the frequency of driver abstract checks to once every six months.

A proactive system should be implemented to identify drivers that are high risk. Even if a driver has not had a license suspended by the Provincial authority, they may have higher risk behavior. Awarding demerit points for fines, at-fault crashes and other driving offenses can provide a clearer picture of the driver’s profile. The next step is to design consequences for drivers who fall in elevated risk brackets.

The Accident Review Committee should determine whether an accident was preventable before determining causes. Having a Committee, rather than an individual make this determination, alleviates the pressure on the individual and makes the decision appear fairer.

CPG should create an annual accident report for management detailing any trends identified in terms of types of vehicles involved in crashes, high-risk locations, high-risk activities and overall causes. Any trends can then be proactively addressed to reduce their impact in the future. KPIs such as incidents/million kilometers, incidents/hours driven, total collision costs/number of collisions, and percentage of vehicles or drivers in a collision should be tracked. A collision per million kilometer rate under 4 is a good target.

Fleet Management should enforce mechanic sign-off on the defect sheets so that operators can rely on them to know if a repair has been completed.

INFORMATION MANAGEMENT

Industry Best Practice A best-in-class fleet services organization is clear on the fleet management functions for which it is accountable and the key performance indicators (KPIs) it must use to measure and review fleet performance. It ensures that the required data entry or import into the fleet management information system (FMIS) is in place and that online dashboards and reports are implemented and the organization and fleet user community is able to see the detailed data in the FMIS. The fleet management organization proactively sends out the KPIs for review and action planning. Fleet Management Functions

The overall goal of fleet management is to support operations. A secondary goal is to do so in a manner that is safe and economically efficient. Achieving cost efficiency involves balancing capital investment in vehicle replacement with operating costs where operating costs include maintenance and repairs, fuel, fleet administration, licensing, insurance and accident repairs. An FMIS is key to assisting decision making across these functions. Some of the areas where an FMIS can assist are shown below.


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Figure 7 FMIS Uses in Functional Areas

Fleet Management Function

Description and Goal

Performance Management

Monitor fleet performance; determine baseline performance, set targets, identify trends and exceptions for management action.

Business Planning

Establish management priorities and strategies for the fleet. This may include strategies to achieve performance targets such as improving vehicle utilization, optimizing fleet size, reducing operating costs, reducing GHG emissions etc.

Capital and Expense Budget Management

Develop fleet capital and operating budgets and forward-looking capital plans, track actual performance and rationalize deviations from plan. Secure funding for fleet replacement and/or leasing. Billing to fleet users for vehicle ownership and operating cost.

Vehicle Replacement

Establish vehicle retirement criteria and develop vehicle replacement plans. Develop vehicle selector and specs to provide the lowest cost vehicle that meets user functional requirements and business plan priorities.

Maintenance

Establish and implement preventive maintenance standards that balance cost versus unplanned maintenance and vehicle downtime. Use a network of internal garages and external service suppliers at contracted prices. Challenge and authorize repair estimates. Emergency roadside assistance. Ongoing 3rd party service and price assurance. Maintain fleet in a manner that ensures compliance with applicable legislation (i.e., CVOR, emissions testing, etc.,)

Fuel

Provide a fuel card or onsite fueling stations to obtain fuel at discounted prices and track fuel consumption to the vehicle. Implement fraud mitigation.

Annual license and Insurance Renewal

Annual renewal and distribution of license stickers and insurance slips.

Traffic Infraction Processing

Payment processing and rebilling to fleet users.

Accident Claims Settling insurance claims for collision damage.

Driver Training and Record Management

Accident incidence monitoring, defensive driver training and ensure driver’s licenses are valid.

Fleet User Service Provide support and liaison with vehicle users for any fleet issues. Ensure the highest possible level of fleet availability (uptime).

Vehicle Disposals Manage vehicle dispositions to optimize revenue obtained.


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Fleet Management Function

Description and Goal

Fleet Management Information System (FMIS)

Ensure the consolidated information needed to effectively manage the entire fleet is tracked and accessible to Fleet Services, to fleet users and the organization.

Key Performance Indicators

Best-in-class fleet organizations employ fleet report cards focused on both management and user department information needs. The example shown below lists common KPIs used in asset, maintenance and fuel management.

Figure 8 Key Performance Indicators

KPI Description

Asset Utilization

# Vehicles Count of fleet size.

Km Travelled

Total distance travelled. Includes estimated km travelled as well as actual distance travelled from odometer reading updates.

Km/Vehicle Provides utilization trends.

Odometer Reporting (%) Number of vehicles with odometer reading updates divided by # vehicles expressed as a percent.

Ownership $ Ownership cost.

PM & Repair $ Preventive maintenance and repair cost.

Collision, Abuse $ Collision, abuse and vandalism cost.

Fuel $ Fuel cost for all vehicles.

Total $ Total vehicle cost.

Total $/km Total vehicle cost per km.

Total $/Vehicle Total unit vehicle cost.


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KPI Description

Asset Maintenance and Repair

% PM Compliance Percentage of the fleet that is on schedule for PM’s, equals (# Vehicles - # PM’s Due)/ # Vehicles.

% Legislative Compliance Percentage of the fleet that meets legislated maintenance requirements (where applicable).

% Unscheduled Repairs # of unscheduled repairs approved divided by the # Vehicles (1 above).

Total Downtime/incident Sum of downtime hours for all vehicles divided by the total number of incidents.

% Unscheduled Downtime Unscheduled downtime hours divided by total downtime hours expressed as a percent.

Fleet Availability %

Percentage of time vehicles were available for customer use. Equals = (Total # Vehicles x days in period x 12 hours (a business day) less Total Downtime Hours)/(Total Vehicles x days in period x 12 hours).

Asset Sustainability

Fuel Efficiency (L/100Km) Total liters of all fuel types purchased * 100 divided by km travelled. GHG in tonnes of CO2.

It is important for organizations to capture this type of data, but it is also useful to know how they are doing relative to similar organizations. For each of the maintenance KPIs a corresponding industry benchmark is shown. When a City knows their own performance level they can compare to this benchmark and identify areas for improvement.

Figure 9 KPI with Benchmark

Performance Measure

Description Target

Fleet Availability Rate

The degree to which the fleet service provider is able to ensure the regular availability of fleet units to their user departments. Availability rates should be highest for mission critical fleet units.

95 to 98%

Repair Service Turnaround Time

Measures the percentage of service and repair activities completed with daily timeframes. This measure is related to fleet availability but focuses on minimizing lengthy repairs.

80% in 24 hrs. 90% in 72 hrs.

PM Program Compliance

Measures the number of PM’s performed on the date scheduled. A low compliance rate indicates that PM’s are not being performed regularly. A high PM compliance rate is a

95% on-time


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Performance Measure

Description Target

basic building block for an effective maintenance and repair program.

Scheduled Repair Rate

Measures the portion of all repairs identified and conducted in a controlled, planned manner. The combined purpose of the PM program, operator inspections, and service writing is to identify and take care of problems in a planned, scheduled manner so they do not result in unscheduled and costly breakdowns.

66%

Mechanic Productivity

Tracks the percentage of annual payroll hours (i.e. 2,080 plus OT) that are posted to work orders. 70%

Comeback Rate

Measures the percentage of time a customer returns a vehicle or piece of equipment back to the shop for the same problem within a specified period of time. It is a measure of service quality that reflects the accuracy of service writing and diagnostic activities as well as repair quality.

1%

Fleet Management Information System (FMIS)

There are several types and tiers of FMIS available in the marketplace. The best-in-class FMIS is rich in functions that are modular so that the customer may choose only the modules it needs. Functionalities such as self-serve querying, asset lifecycle management from inception to retirement, cost capturing at detailed vehicle level, asset transfers, vehicle pool management, fuel management, comprehensive maintenance and repair management workflows and screens, purchase order creation and invoice payment are commonplace. File transfer capability both in real-time and batch mode can be done easily. Report creation and individualized dashboard creation functionalities are user-friendly in the FMIS. Either SQL or Oracle database can be implemented. The suppliers of such FMIS software are consultative and provide professional services as well. The applications and database services can be deployed in the customer’s IT environment or be provided by the FMIS supplier as a subscription based service which is available using the Internet. Each business model has its pros and cons but both work well. A smaller municipality benefits from acquiring a purpose built commercial off-the-shelf (COTS) fleet management information system rather than using an SAP system or trying to develop their own system for fleet purposes. A COTS allows them to track meaningful data that can result in real efficiencies at a reasonable cost. The primary benefit of a fully integrated FMIS is the ability to manage all aspects of a fleet operation through a single interface and toolkit. Having all pertinent transactional and management data consolidated in a single system and available to all fleet users provides an effective tool for day-to-day operational management, a basis for timely management decisions, and an efficient information retrieval and reporting platform. An FMIS is also capable of integrating data obtained from various telematics systems into the fleet database. Data from Automatic Vehicle Locating (AVL), Global Position Systems


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(GPS) and other systems can be captured and used to improve fleet efficiency in many areas. Some of the key areas that telematics can help improve performance are salt management, route optimization and fuel savings.

Leading systems are aligned with best practice processes and include standard reports and analysis tools for tracking all aspects of fleet operations. Commercial off the shelf solutions typically include these benefits:

Built in business rules help frame how data is managed, processed, and validated.

Standard designed screens, modules, and functions support best practice fleet processes.

Predefined common asset schemas and data attribute listings are provided, such as vehicle class codes, work task codes, and parts numbers.

Offers flexibility and user defined areas even though most data capture and workflow processing is mostly pre-defined.

In the table below we have provided examples of COTS FMIS for small fleet (Tier 2) and fully functional (Tier 1) systems. These COTS packages come with a range of customization options.

Figure 10

Example of COTS Available

Tier 1

Asset Works (Fleet Anywhere) www.assetworks.com

Chevin Fleet Solutions (Fleet Wave) www.chevinfleet.com

Faster Asset Solutions (Faster Web) www.ccgsystems.com

Tier 2

Collective Data (collectiveFleetPro) www.collectivedata.com

Ron Turley Associates (RTA) www.rtafleet.com

CFA (CFAWin) www.cfasoftware.com

Some of the differences between Tier 1 and Tier 2 systems are the depth of functional features in certain areas (such as financial management, supply chain, and replacement

http://www.assetworks.com/

http://www.chevinfleet.com/

http://www.ccgsystems.com/

http://www.collectivedata.com/

http://www.rtafleet.com/

http://www.cfasoftware.com/


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planning), the level of customization available, resources available from the software company for implementation and training, and the flexibility of reporting and dashboard modules.

Reports

With a good FMIS it is possible to collect a lot of useful data that can be analyzed and turned into information for decision makers at every level. Organizations should have a reporting matrix that defines what information should be collected and to whom it should be communicated. The frequency and means of communication are the final elements of a reporting matrix.

Figure 11 Reporting Matrix

Information From To Time Means

“Serious” collision

Division Fleet Manager Immediate Phone/email

Fleet Manager Senior Management

Within 24 hours Phone/email

Fuel Report

Division Fleet Manager Monthly FMIS


Quarterly Written report

Vehicle selector criteria


Annually PPT Presentation

Collision Report Fleet Manager Senior Management

Quarterly Written report

Vehicle downtime

Shop Supervisor

Fleet Manager Weekly FMIS


Semi-annually (as part of fleet update)

Written report

Findings Fleet Services at CPG suffers from inadequate data collection and analysis and can track few of the indicators listed in Figure 8. In the 1990s, Fleet engaged an outside company to assist them in building a fleet management system. In 2003 the City migrated to JD Edwards in order to integrate diverse financial and administrative functions. When Fleet transitioned to JD Edwards they found it to have only 50 percent of the functionality of their former system, but developed some work-arounds to enhance that capability. KPIs

Fleet Services is not actively tracking and reporting on important KPIs. They can, and do track some utilization data and fuel usage but KPIs such as overall fleet downtime, repair delays awaiting parts, cost per Vehicle Equivalency Unit, for example, are not tracked. The full range of KPIs described in Figure 8 would allow CPG to have a better understanding of fleet performance and costs and to make improvements.


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FMIS

The FMIS is JD Edwards, which is a good financial management system. It has some fleet and asset management capabilities that can be enhanced. There are no changes or upgrades envisaged in the next five years. CPG recognized the weakness of JD Edwards in the asset management of linear assets and has recently acquired City Works to address this shortfall. The situation with Fleet is similar but currently there are no plans to acquire a fleet-specific system. CPG has not used telematics for fleet operations to any significant extent. They had an automatic vehicle location (AVL) system installed on plows but did not use the data generated so discontinued their use. Plans were underway to purchase a system to reduce fuel usage but the project was not finalized. The City is actively pursuing options now for salt management and route optimization. Reports

Due to the lack of a functional system and poor data, Fleet does not generate any reports to customers or management. There is no reporting matrix to define what information should be passed on a regular basis. Opportunities for Improvement



Comprehensive FMIS, which is feature rich and modular, enables entire vehicle lifecycle management and flexible reporting, and is used by Fleet Services and its clients alike. The FMIS is also a data and document repository for fleet.

No Acquire a fleet-specific system.

Fleet Services has well defined KPIs, regular reviews with clients and stakeholders facilitated by the FMIS for which Fleet Services is accountable.

No Collect the necessary data to generate KPIs and produce regular reports.

One FMIS environment for all clients within an organization

Partial Ensure the FMIS interfaces with JD Edward system and encompasses various ad hoc spreadsheets and access databases.

A reporting matrix defines information requirements for all levels as well as reporting intervals.

No Develop a reporting matrix.


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Telematics use is driven by Return on Investment (ROI) calculations and designed to improve overall fleet performance.

No Implement telematics solutions to improve salt management and route optimization.

Recommendations

CPG should acquire a Tier 2 system with good functionality that interfaces easily with JD Edwards. They should follow the steps for system selection and implementation:

o Needs analysis (data can be found in this section) o Review of systems available o Identify selection criteria o Select system o Define implementation timelines and parameters o Implement system

CPG should develop a reporting matrix that identifies information and KPIs that are valuable to fleet customers as well as senior management. The matrix should identify who is responsible for generating the information, to whom it needs to be delivered, how frequently it should be passed, and in what format it should appear.

CPG should identify and acquire a telematics solution to improve fleet efficiency in three key areas – fuel usage, salt management and route optimization.

CUSTOMER RELATIONSHIP MANAGEMENT

Industry Best Practice Customer service management and effective communications are central to the effective performance of any fleet management organization. Good customer service management stems from an acute sensitivity to the needs and concerns of fleet users, and manifests itself in a set of communication, decision-making, reporting, and feedback processes which encourage fleet users to actively participate in the management and maintenance, and not simply the utilization, of a fleet. A clear understanding of the needs and concerns of customers is also critical to effectively running a fleet management organization. The organization’s understanding of its customers’ needs should not be entirely based on informal communication. The lack of a formal customer communication mechanism can limit a fleet organization’s ability to quickly revise its service practices to keep pace with changes in its customer’s service needs. Relevant information may be lost or misinterpreted if communicated only through informal channels. In addition, the lack of a formal communication mechanism can prevent a fleet services organization from gathering consistent information with which to


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evaluate customer satisfaction with their services on a year-to-year basis. Annual satisfaction surveys should be part of an organization’s customer service plan. A fleet management steering or advisory committee is an excellent forum to both pass important information to customers and to get their feedback. This type of committee should not only be used during a fleet review, but kept as a standing body with a formal charter and regularly scheduled meetings. Another important means of communication is through regular (monthly, quarterly and annually) fleet reports. Frequent reporting on achievement of goals and progress towards meeting targets tracked in a performance measurement system is one of the most effective ways to communicate with customers. A good fleet information management system is key to facilitating this process. Fleet customers should be approached to determine what their information needs are on an ongoing basis and then reports should be tailored to meet those needs. Findings Most customers report that they are satisfied with most aspects of Fleet. There is a marked difference in the levels of satisfaction with maintenance and repair services for the heavy-duty fleet compared to the light-duty or emergency vehicles. Accordingly, Streets, with almost exclusively heavy-duty vehicles, is less satisfied than their counterparts. The results of an informal, verbal survey appear below.


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Figure 12 Customer Survey

This survey was conducted during our site visit and the results are to be tempered by the reality of the recent reorganization. Many respondents mixed comments on the old system with observations on improvements in the new system. Overall satisfaction with Fleet is good and improving. CPG does not conduct annual customer satisfaction surveys of this type so these results could not be compared with results in the past. The City has an Accident Review Committee but no fleet management steering committee. It also has a Snow Committee that was used to guide this review. The City does not have a regular reporting matrix for fleet.

Definition Arenas Bylaw Dev Svcs UtilitiesSewer

WaterParks Fire Streets

Please rate the process of taking vehicles to the garage for work and picking them

up after completion of service. Are you met promptly by garage personnel, are they

courteous and understanding of the problem, and do they contact you when the vehicle

is ready for pick up?

4 4 4 2 3LD-5,

HD-2.5

Fire 5,

Other 2 2

Quality of Service means when a vehicle repair is made, the problem is cured for a

reasonable period of time (at least 30 days). The vehicle does not have to be

returned to the garage to be reworked for the same problem.5 4 4

4 3.5 2.5 5 3.5

Timeliness of Service means that vehicle service and repairs are completed within a

reasonable amount of time according to the amount of work to be done. For example,

light duty vehicles receive PM (preventive maintenance) service and are back in

service within 24 hours or less (unless additional repair work is required). Medium

and Heavy duty vehicles and Equipment receive PM service within 48 hours. Most

major repairs are completed within one week.

4 4 4

4 2 2 5 2

Vehicle Availability means that 95% or more of a department's vehicles are

available for duty on any given day. Even though you may not have statistical data on

this, please rate your opinion of Vehicle Availability.4 4 4

4 2013 - 2, 2014 - 34 5 1

The Acquisition Process is the entire process of acquiring new vehicles and

equipment including the specification of the right type of vehicle, upfitting, receiving the

new vehicle, and operator training if necessary.3 1 (old) 4

3 3 3 5 4

Communications. Does the Fleet Department communicate adequately with your

department? This includes reports that you may get from the fleet department,

notifications for Preventive Maintenance, notification that repairs are completed, and

other communications that are written, verbal, or transmitted by computer.

4 4 2

3 2.5 2.5

Fire 5,

Other 2 2

Please rate your overall satisfaction with the Fleet Department.4 4 4

3 3 3 4 2


31




Customers participate in managing the fleet business through a Fleet Steering Committee.

No Create a Fleet Steering Committee

Customer service surveys are conducted annually on an “active” basis (i.e., customers must respond, versus passive surveys that are optional such as a “drop box” or mail back approach).

No Conduct annual customer service surveys and benchmark the results.

Fleet management meets with major customers at least once per year.

No Arrange regular customer meetings.

Customers and senior management receive regular and useable fleet reports.

No Create a reporting matrix for fleet activities.

Recommendations

CPG should formalize a fleet management steering committee. It should create a charter for this committee to include an annual review of fleet replacement plans, fleet budget requests, fleet utilization levels, and other pertinent fleet-related issues, challenges, and opportunities. Members should be representatives from Fleet Services, Procurement, and a cross section of fleet user organization representatives.

CPG should conduct an annual survey to determine the level of satisfaction of fleet users with Fleet Services’ performance. The results of the survey should be retained and used to measure improvements or identify emerging problems.

Fleet Services should meet with its principal customers to discuss fleet replacement, service satisfaction, and any problems they are facing. Customers can communicate any unusual requirements or requests for additional services.

Annex C

FLEET

REPLACEMENT

PRACTICES

for the

CITY OF PRINCE

GEORGE

July 2014



Report on Fleet Replacement Practices

Table of Contents

INTRODUCTION ............................................................................................................. 1

PRINCIPLES OF EFFECTIVE FLEET REPLACEMENT ................................................ 1

DETERMINATION OF OPTIMAL VEHICLE REPLACEMENT CYCLES .................... 2

REPLACEMENT PLANNING ...................................................................................... 3

REPLACEMENT FUNDING ........................................................................................ 4

REPLACEMENT PRIORITIZATION ........................................................................... 5

FINDINGS ....................................................................................................................... 6

VEHICLE REPLACEMENT CYCLES ......................................................................... 6

Optimal Replacement Cycle Analyses ...................................................................... 6

Target and Actual Replacement Cycles .................................................................. 13

FLEET REPLACEMENT PLANNING AND COSTS .................................................. 14

FINANCING FLEET REPLACEMENT COSTS ......................................................... 18

Pros and Cons of Alternative Capital Financing Approaches .................................. 19

Comparison of Replacement Financing Options ..................................................... 22

CONCLUSIONS ............................................................................................................ 28

RECOMMENDATIONS ................................................................................................. 28

APPENDIX .................................................................................................................... 30

OPTIMAL REPLACEMENT CYCLE ANALYSIS - LOADERS ................................... 30

OPTIMAL REPLACEMENT CYCLE ANALYSIS - GRADERS .................................. 30

OPTIMAL REPLACEMENT CYCLE ANALYSIS – SIDEWALK SNOW MACHINE ... 30


1

INTRODUCTION

This section of our report presents the results of Mercury Associates’ assessment of fleet replacement practices employed by the City of Prince George (CPG). Specific areas included in this analysis are:

Determining optimal replacement cycles for selected types of assets in the City’s fleet;

Determining the long-term replacement costs of the fleet; and

Modeling the costs of various alternative financing approaches.

PRINCIPLES OF EFFECTIVE FLEET REPLACEMENT

An effective fleet replacement program is essential for controlling fleet performance (i.e., vehicle suitability, availability, reliability, safety, and environmental impacts) and total cost of ownership. Before discussing our evaluation of CPG’s fleet replacement practices and recommendations for improving them, it is useful to review the major components of an effective fleet replacement program, as they provide the philosophical and analytical framework that our project team used as the point of departure for conducting this evaluation. There are five key components of an effective fleet replacement program. They are: 1. Empirically validated vehicle replacement cycle guidelines that identify when specific

types of fleet assets generally should be replaced to minimize their life cycle costs (i.e., total cost of ownership).

2. A long-term fleet replacement plan that pinpoints anticipated replacement dates and costs of individual assets based on the application of recommended replacement cycles and quantifies year-to-year, fleet-wide replacement costs and future variations therein.

3. A capital financing approach that facilitates securing sufficient funds each year to acquire replacement vehicles by making such funding requirements smooth, predictable, and, to the fullest extent possible, invulnerable to competition from other competing capital funding requests.

4. A short-term replacement prioritization and earmarking process for designating specific vehicles and pieces of equipment to be replaced in the coming fiscal year.

5. A budgeting and funding process that enables fleet user organizations to secure the amount of funds needed each year to execute the replacement plan based on the selected financing approach.


2

DETERMINATION OF OPTIMAL VEHICLE REPLACEMENT CYCLES

Vehicle replacement guidelines should be based on the economic theory of optimal vehicle replacement, which is illustrated graphically here. As a vehicle ages, its capital cost diminishes and its operating costs (e.g., maintenance, repair, and fuel) increase. The combination of these two costs produces a U-shaped total cost curve that reflects the total cost of ownership of the asset. Ideally, a vehicle or piece of equipment should be replaced around the time the rise in annual operating costs begin to outweigh the decline in annual capital costs – that is, when the two cost curves intersect and the total cost of ownership begins to increase. The total cost curve is different for every type of vehicle and, indeed, for every individual vehicle of a given type. This variability is caused by differences in the design and engineering of different types of vehicles, in operating environments, in the quality of care vehicles receive, and a variety of other factors. In recognition of this fact, most organizations develop recommended replacement cycles for a class or type of vehicles, which will approximate the optimal replacement cycle for most of the units in that particular class. Historically this was most often accomplished in an informal manner based on discussions with mechanics and drivers, and a comparison of replacement cycles with peer organizations. Best practice fleet organizations develop these cycles empirically using optimal replacement cycle analysis techniques. This analytical approach involves modeling the stream of costs associated with acquiring, operating, and disposing of a particular type of vehicle or piece of equipment over a range of potential ages or replacement cycles, and identifying the cycle that will result in the lowest total cost of ownership. The simplest way to identify this cycle is with a metric called equivalent annual cost (EAC). What is most important about an empirical approach to determining optimal vehicle replacement cycles is that it provides the foundation for planning and making replacement decisions based on objective information as opposed to opinion, subjective judgment, or past practice. In our experience, even the best-educated or well-intentioned individuals in an organization may believe cost savings or avoidance opportunities exist where they do not, in fact, exist. Moreover, biases against a particular replacement philosophy or approach may lead some stakeholders to promote suboptimal strategies or decisions. For example, fleet maintenance supervisors are aware of the impact that replacement decisions can have on their garage staff. Changing cycles in a way that would significantly decrease the amount of maintenance work required may color the way they view such options. In the absence of hard data, it is not difficult to make almost any approach sound more cost effective.

Economic Theory of Vehicle Replacement

1-

8

OPERATING CAPITAL

* TIMEAJSAGE


3

Optimal replacement cycle analyses are valuable for examining the “hard” capital and operating costs associated with alternative replacement cycles for a given type of vehicle. It is important to note, however, that there often are other costs, some more easily measured than others, which are also impacted by an organization’s replacement cycle decisions. These include items such as:

Unmanageability of repair costs

Increasing vehicle downtime and its impact on fleet size

Service disruptions

Reduced employee productivity

Reduced employee safety

Reduced public safety

Higher greenhouse gas emissions

Decision makers who assume that cutting replacement purchases is a good way to help balance the budget need to understand that such cuts typically just transfer fleet costs from the capital to the operating side of the general ledger, actually increasing the total cost of ownership of a the fleet in the process. Regardless of its net effect on current fleet costs, the deferral of replacement purchases on a regular basis unquestionably leads to an older fleet with significant downtime at best, and at worst, the inability to provide services due to unreliable transportation. Delaying replacement increases future replacement spending needs, often resulting in growing and increasingly unmanageable fleet replacement backlogs. REPLACEMENT PLANNING

Item 2 from the list of effective fleet replacement program components calls for a long-term fleet replacement plan that projects future vehicle replacement dates and purchase costs associated with the use of a stated set of replacement cycles. It quantifies year-to-year, fleet-wide replacement costs and future variations therein, allowing for effective long-term planning and budgeting. A key benefit of a long-term replacement plan is its ability to help fleet managers educate decision makers as to the magnitude of fleet replacement costs and the inherent annual peaks and valleys in such costs over time. It specifically helps fleet management organizations and their customers address two misconceptions held by many nonprofessionals that often are major factors behind an organization’s failure to devote enough funds to fleet replacement, which is the primary impediment to, in turn, replacing vehicles and equipment in a timely manner. One of these misconceptions is the belief that fleet replacement costs are quasi discretionary and that there is no compelling reason to fill 100 percent of the requests for fleet replacement funds that line organizations make each year. The other is the belief


4

that it is not necessary to vary to any significant degree the amount of funds devoted to fleet replacement spending from year to year. A good fleet replacement planning process not only quantifies the costs of replacing the fleet over the long term so that management and budget decision makers can see that this is a significant, recurring cost of doing business. It also illustrates the consequences of under-funding replacement expenditures by translating spending shortfalls into future spikes in, and backlogs of, replacement spending needs. REPLACEMENT FUNDING

Items 3 and 5 from the list of essential elements of an effective replacement program pertain to the manner in which an organization finances fleet replacement (i.e., vehicle and equipment acquisition) costs. The best fleet replacement plans are of no value without the annual funding required to implement them. As an example, the chart below shows the annual replacement costs over a period of 20 years of a government fleet of about 600 vehicles and pieces of equipment1.

Sample Long-Term Fleet Replacement Plan

As can be seen, year-to-year fleet replacement spending requirements are quite volatile with peaks and valleys of varying magnitude occurring routinely throughout the 20-year period. The first year is very high, reflecting a backlog of vehicles requiring replacement. This unevenness is common in virtually all mixed-vocational fleets.

1 This fleet is used for illustrative purposes only but is consistent with most governmental fleet operations.

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"2 ,, ~ :E E ... .., ~ 'ii

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t :l

j •

S;.


5

Even during good economic times, securing sufficient funds to replace vehicles and equipment in a timely manner is a challenge for many organizations. In our experience, the vulnerability of fleet replacement funding in most organizations stems less from a lack of appreciation of the importance of vehicles or of the need to replace them on a regular basis, and more from a lack of willingness to commit sufficient funds to fleet replacement. This reluctance is greatly impacted by the large numbers of vehicles that may need to be replaced in some years and the inability of certain capital financing approaches to effectively deal with the resulting replacement spending needs that are inherently uneven from year to year. Most organizations, particularly in the public sector, do not have a good mechanism for accommodating year-to-year changes in spending requirements when the source of funds (i.e. tax revenues) for such expenditures is relatively static. The solution to this problem lies in pursuing one of two courses of action: eliminating the volatility in fleet replacement spending requirements, or eliminating the volatility in replacement funding requirements. While annual volatility in the replacement cost of a fleet (i.e., spending requirements) can be managed to a certain extent over the short term – say three to five years – it cannot be completely eliminated in a fleet comprised of many different types of vehicles. The year-over-year volatility of replacement funding requirements, on the other hand, can be managed quite well, depending on the method used to finance fleet replacement costs. REPLACEMENT PRIORITIZATION

Item 4 from the list of effective fleet replacement program requirements indicates the need for a short-term replacement prioritization and earmarking process for designating specific vehicles and pieces of equipment to be replaced in the coming fiscal year. This process takes us from the data-driven model of a long-term fleet replacement plan, to the real-world review of vehicles proposed to be replaced in a given year. Because a fleet replacement plan and the replacement cycle guidelines for different types of vehicles on which it is based derive from cost and other information for the “average” or “typical” vehicle or piece of equipment of each type, they do not fully take into account the unique characteristics of each asset in a fleet. The long-term replacement plan should serve to identify which assets are candidates for replacement each year, not which assets will definitely be replaced each year. These candidates should be scrutinized using criteria that are not limited to age and life-to-date kilometers or hours of use. A replacement prioritization process includes reviewing a vehicle’s application and use to determine if it will be required long term. It also reviews the application and condition of the vehicle, identifies the type of replacement unit required and prioritizes vehicles on the replacement list for use in order/delivery cycling. Best practice organizations use a scoring system to set priorities. The system incorporates values for factors or attributes that are unique to each vehicle, including current utilization level; front-line or backup assignment status; recent repair history and pending repair/refurbishment costs; perceived reliability, suitability, and safety; and ease of replacement.


6

FINDINGS

VEHICLE REPLACEMENT CYCLES

Optimal Replacement Cycle Analyses

Earlier in this report we outlined the principles of effective fleet replacement and the role of replacement cycle guidelines for specific types of fleet assets. We explained that the industry best practice is to develop these guidelines empirically using life cycle cost analysis (LCA) techniques. This approach involves modeling the stream of costs associated with acquiring, operating, and maintaining and repairing a particular type of vehicle or piece of equipment over a range of potential ages or replacement cycles, and then determining the cycle that will result in the lowest total cost of ownership. A key metric we use in identifying optimal replacement cycles is equivalent annual cost (EAC). The EAC of a capital asset is a uniform dollar amount, the net present value of whose payments for a given period of time (i.e., replacement cycle) is equivalent to the net present value costs of owning and operating that asset over the course of that period. It is a useful metric for comparing the costs of alternative replacement cycles (i.e., streams of future costs of different durations) for an asset in order to determine which cycle results in the lowest total cost of ownership. While the analysis of objective data is essential for identifying optimal replacement cycles, it is important to note that there also are indirect asset costs which are impacted by an organization’s vehicle replacement policies and decisions, and that may not be easy to quantify but nonetheless should be taken into account when reviewing and interpreting empirical analysis results. These factors include:

The predictability and, hence, manageability of asset repair costs, both of which tend to diminish as assets age;

Maintenance and repair-related asset downtime and its impact on fleet size;

Service disruptions resulting from unexpected asset breakdowns;

Impacts on employee efficiency, productivity, effectiveness, and safety associated with asset availability and reliability levels;

Reduced driver/operator confidence in and satisfaction with asset performance, and corresponding changes in asset usage decisions and practices; and

Technological obsolescence which impacts everything from repair parts availability to fuel consumption rates.

In consultation with Fleet Services, we selected four types of assets for inclusion in the optimal replacement cycle analysis component of this study: dump trucks, loaders, graders, and sidewalk snow machines. The number of each type of unit in the fleet is shown in Figure 1.


7

Figure 1 Asset Types Included in Replacement Cycle Analysis and Quantities of Each

Asset Type Number of Units Model Chosen for Analysis

Dump Truck 11 Sterling LT9500

Loader 5 Caterpillar Loader 938G SII

Grader 5 Caterpillar 160H Grader

Sidewalk Snow Machine 5 MT 6 Trackless

Total 26

We selected specific elements of historical data for each asset of each type to include in our analysis. These data items pertained to the principal direct costs associated with owning and operating each of the asset types such as original purchase prices and in-service dates; and miles driven and maintenance, repair, and fuel costs for the past year. The types of information we assembled and the sources of each are shown in Figure 2.

Figure 2 Information Sources for Cost Modelling

Data Required for Analysis Source

Fleet Inventory City of Prince George

Original Purchase Prices City of Prince George

Annual Asset Usage City of Prince George

Asset Residual Values CARCAP

Asset Maintenance and Repair Costs City of Prince George and Other MAI Clients

Fuel Economy Rates (HPL)2 City of Prince George

Fuel Prices The World Bank website (worldbank.org)

Fuel Economy Deterioration Factor U.S. EPA CAFE and work truck fuel economy standards in effect in 2014

For each type of asset identified above, we conducted a life cycle cost analysis using a proprietary software program called ORCA™ developed by Mercury Associates for this purpose. We used this program to calculate the equivalent annual cost (EAC) associated with keeping each type of asset in service for periods ranging from 1 to as many as 20 years, and identified the replacement cycle that would result in the lowest EAC. We made a final replacement cycle recommendation based on review of the EAC calculations, especially relative differences (often small) between the EAC under the lowest-cost replacement cycle and under replacement cycles that are one or two years shorter or

2 Hours per litre. All of the assets that were analyzed in this study have meters that were measured in hours which is why the metric for fuel economy is in hours per litre.


8

longer than it. We also took into account other “soft cost” considerations such as those discussed above (e.g., reliability, predictability of repair costs, parts availability, and technological obsolescence). For each group of assets examined, we usually perform extensive statistical analysis of historical asset usage and maintenance and repair cost data in order to 1) determine the average annual level of usage during the primary period of use of each asset type during its service life; and 2) develop regression equations for estimating a) annual asset maintenance and repair costs, and b) end-of-year asset fair market values (FMV) as a function of changes in asset age (i.e., potential replacement cycle) and accumulated usage. However, due to the small size of the CPG fleet and the limited availability of historical cost data for the specific assets in the City’s fleet, it was necessary to utilize regression equations we recently developed for another public-sector client with similar types of assets for whom we conducted a comprehensive fleet replacement cost and modernization justification study. We estimated fuel costs based on the fuel efficiency in hours per litre of each asset type, the 2012 City of Prince George region average cost per litre of fuel ($1.52 for gasoline and $1.39 for diesel) as reported by the World Bank, and an annual fuel price inflation rate of 3 percent. We also included an annual fuel efficiency degradation factor of 1 percent to reflect the fact that assets become less fuel efficient as they age and the fact that keeping assets in a fleet for a long time deprives fleet owners of gains in new vehicle fuel efficiency made possible by advances in vehicle engineering and manufacturing required to comply with fuel economy standards. Figure 3 summarizes the results of our analyses; detailed analysis results for each type of asset can be found in the appendix to this report. The “de facto” replacement cycle was determined by developing a frequency distribution of the assets in each class by current asset age and examining the results. If the current ages of all the assets in a given class displayed a normal distribution, the current de facto replacement cycle would be double the current mean age of the assets. In a non-normal age distribution, typical in older and smaller fleets, doubling the current mean age of the assets tends to overstate the age at which most assets in a given class currently are being replaced. As can be seen, the de facto replacement cycles appear to be largely in line with the City’s target replacement cycles, with one exception and one caveat. The exception is the City’s dump truck fleet, which includes one 18 and two 17 year-old trucks, the recent annual usage of which is not substantially lower than that of the younger (5 and 7 year-old trucks in the fleet). We decided on a de facto replacement cycle for this class of assets by doubling the median age of all of the units of this type in the fleet. The caveat is that the use of de facto cycles of 10 years each for loaders and graders reflects the fact that none of the units of either type currently exceeds the City’s target replacement cycle. However, seven of the ten total units in these two classes are within two years of reaching the target, meaning that the de facto replacement cycles will exceed


9

Figure 3

Current and Recommended Replacement Cycles and Associated Annual Asset Operating Cost Savings

(costs in 2014 dollars)

Replacement

Cycle

Average Annual

Operating Costs

(2014$)

Replacement

Cycle

Average Annual

Operating Costs

(2014$)

Replacement

Cycle

Average Annual

Operating Costs

(2014$)

Dump Truck 11 9.3 10 $50,881 14* $70,010 7 $41,918 $28,092 $ 309,014

Loader 5 8 10 $44,480 10 $44,480 10 $44,480 $0 $ -

Grader 5 6.8 10 $42,533 10 $44,521 12 $44,521 $0 $ -

Sidewalk Snow Machine 5 8 9 $11,524 12** $10,605 10 $9,742 $863 $ 4,314

Total 26 $ 313,328

*Based on two times current median age of 7 years. ** Based on oldest machine in inventory.

Asset Type

Number

of Units

Current Mean

Age (Years)

Average

Annual

Operating

Cost Savings

per Asset

(2014$)

Total

Average

Annual

Operating

Cost Savings

(2014$)

City of Prince George's

Target

City of Prince George's

De Facto

Mercury Associates'

Recommended


10

the target cycles without wholesale modernization of the loaders and graders in the next few years. The optimal replacement cycles we identified in this study are similar to those we have found in numerous other studies of this type that we have performed for public-sector fleets over the last 15 years. As can be seen, substantial operating cost 3 savings could be realized by replacing dump trucks more quickly than at present. If the City were in fact replacing its dump trucks every 14 years on average, we estimate that it could save more than $300,000 per year by replacing these trucks every seven years. Since we have chosen to assume that loaders and graders will be replaced at the City’s target replacement cycles, which are identical to our recommended cycles, there are no cost savings associated with these asset classes. Finally, we recommend that the sidewalk snow machines be replaced every 10 years, versus the City’s target cycle of nine years and de facto cycle of 12 years. There would be a small reduction in annual operating costs by implementing this recommendation. Below are the details of the optimal replacement cycle analysis for one of the four types of assets: dump trucks. Analysis results for the remaining classes of assets can be found in the appendix to this report. The key assumptions and inputs we used for the dump truck replacement cycle analysis included the following:

1. New vehicle purchase price: $270,000

2. Average annual usage (hours): 1,325

3. Fuel economy rate (HPL): 0.1

4. Fuel cost per litre: $1.39

5. Annual fuel efficiency degradation rate4: 1 percent

6. Annual inflation rate for M&R and fuel costs: 3 percent

7. Discount rate: 6 percent

8. Residual values by vehicle age and accumulated usage (in hours), expressed as a percentage of current vehicle purchase price, obtained from residual value analyses performed for like types of trucks in other organization’s fleets.

3 Our estimation of annual cost savings from implementing the recommended replacement cycles is limited to asset operating costs because the capital cost values used in determining optimal replacement cycles are economic rather than fiscal impact (i.e., cash) values. It is of limited value to decision making to quantify asset capital cost savings from a change in replacement cycles without specifying how the capital costs are actually paid (financed). That said, the cost savings shown in Figure 3 would be reduced somewhat by the increase in asset capital costs that would result from the use of shorter replacement cycles. 4 Per year of vehicle age.


11

9. Maintenance and repair cost projections based on regression analysis of heavy duty truck costs developed for another Mercury Associates client.

City agencies currently keep dump trucks in service for up to 18 years. The mean age of all the dump trucks currently in the fleet is 9.3 years, the median age is 7 years, and the target replacement cycle is 10 years. The results of our analysis, shown in Figure 4, indicate that these vehicles’ total cost of ownership (indicated by the equivalent annual cost – EAC – shown in the bottom row of the table) is at a minimum under a replacement cycle of seven years. Comparing the average annual operating cost of this type of vehicle under a seven-year cycle and the de facto 14-year cycle, it can be seen that the City would save an estimated $28,000 per vehicle per year by replacing these vehicles every seven years. Based on the total number of dump trucks in the fleet, this translates into more than $300,000 in operating savings per year. Even if we assume that the City replaces these trucks every 10 years, its current target replacement cycle, average annual operating cost savings associated with moving to a seven-year cycle would approach $9,000 per truck per year. It also should be noted that this savings amount does not include any of those indirect costs of aging vehicles mentioned earlier, such as the growing unpredictability of repair costs. For example, our life cycle cost analysis (Figure 4) shows that predicted annual maintenance and repair costs increase by more than $22,000 or approximately 80 percent between Age 7 and Age 10, with most, if not all, of this increase being attributable to increased repair requirements, which are generally unscheduled and thus cannot be performed as efficiently as can scheduled services.


12

Figure 4 Optimal Replacement Cycle Analysis for Dump Truck

Replacement Cycle (years) 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Year-End Meter Reading (hrs) 1,325 2,650 3,975 5,300 6,625 7,950 9,275 10,600 11,925 13,250 14,575 15,900 17,225 18,550

Capital Cost

Depreciation Schedule 70.0% 58.5% 48.8% 40.8% 34.1% 28.5% 23.8% 19.9% 16.6% 13.9% 11.6% 9.7% 8.1% 6.7%

Year-End Fair Market Value

Capital Cost $ 81,000 $ 31,134 $ 26,005 $ 21,721 $ 18,143 $ 15,155 $ 12,658 $ 10,573 $ 8,831 $ 7,376 $ 6,161 $ 5,146 $ 4,299 $ 3,591

Operating Costs

Annual M&R Cost (2014$) $ 7,984 $ 9,748 $ 11,901 $ 14,529 $ 17,738 $ 21,656 $ 26,439 $ 32,278 $ 39,407 $ 48,111 $ 58,737 $ 71,710 $ 87,548 $ 106,884

Annual Fuel Cost (2014$) $ 23,196 $ 24,133 $ 25,108 $ 26,123 $ 27,178 $ 28,276 $ 29,419 $ 30,607 $ 31,844 $ 33,131 $ 34,469 $ 35,862 $ 37,311 $ 38,818

Total Annual Operating Cost (2014$) $ 31,180 $ 33,881 $ 37,009 $ 40,652 $ 44,916 $ 49,932 $ 55,858 $ 62,886 $ 71,251 $ 81,242 $ 93,206 $ 107,572 $ 124,859 $ 145,703

Cumulative Operating Cost (2014$) $ 31,180 $ 65,061 $ 102,070 $ 142,722 $ 187,638 $ 237,570 $ 293,428 $ 356,313 $ 427,564 $ 508,806 $ 602,012 $ 709,584 $ 834,443 $ 980,146

Avg Annual Operating Cost (2014$) $ 31,180 $ 32,531 $ 34,023 $ 35,680 $ 37,528 $ 39,595 $ 41,918 $ 44,539 $ 47,507 $ 50,881 $ 54,728 $ 59,132 $ 64,188 $ 70,010

Total Cost

Annual Total Cost $ 112,180 $ 65,015 $ 63,014 $ 62,373 $ 63,059 $ 65,087 $ 68,516 $ 73,459 $ 80,083 $ 88,618 $ 99,368 $ 112,718 $ 129,158 $ 149,293

Cumulative Total Cost $ 112,180 $ 177,195 $ 240,209 $ 302,582 $ 365,642 $ 430,728 $ 499,244 $ 572,703 $ 652,785 $ 741,403 $ 840,771 $ 953,489 $1,082,647 $1,231,940

Equivalent Annual Cost $ 112,180 $ 88,946 $ 80,556 $ 76,210 $ 73,733 $ 72,396 $ 71,890 $ 72,066 $ 72,855 $ 74,230 $ 76,193 $ 78,767 $ 81,993 $ 85,932


13

Target and Actual Replacement Cycles

The City has established replacement cycles based on age (years in service) and usage (kilometers or engine hours) for all vehicle and equipment classifications. They are based on historical experience, surveys of like organizations, and life cycle analysis performed in-house and as part of a 2009 consulting study. In addition to performing optimal replacement cycle analyses for four specific vehicle and equipment types, as was discussed in the previous section of this report, we reviewed the City’s current replacement cycle guidelines for all other types of vehicles and equipment in the fleet. While we found most of these guidelines to be reasonable, we have recommended adjustments to some cycles, as summarized below. The changes are based on the condition of the fleet, operating environment, industry standards, and our experience with similar fleet organizations.

Figure 5 Recommended Changes to Existing Replacement Cycles

Classification Current

Replacement Cycle (months)

Recommended Replacement

Cycle (months)

Pickup trucks, compact 72-120 96

Pickup trucks, ½-ton 96-120 96

Pickup trucks, ¾-ton 120 96

Dump trucks, HD 120 84*

Backhoes 60 144

Excavators 60 144

Graders 120 144*

Trailer mounted pumps 96 120

Wood chipper 96 120

Stump grinder 96 120

*Recommended replacement cycle as a result of the ORCA.

If the City were replacing its fleet assets in accordance with the replacement cycles we recommend it use, the weighted average cycle for all the different types of assets in the fleet would be 9.4 years. Assuming that the assets in a fleet are normally distributed by age, which is not unreasonable for a fleet of 315 units, their average age would be one-half of their average replacement cycle, or 4.75 years. However, as of June 1, 2014, the current average age of the fleet is 9.6. We can infer from this that the “de facto” average replacement cycle for the assets in the fleet is two times 9.6, or 19.2 years. This is nearly double what we would expect it to be.


14

As the following graph reflects, the distribution of the City’s fleet by age is skewed by the large number of older vehicles still in the active fleet as of June 2014. In fact, more than 15 percent of the fleet is model year 2000 or older. Also apparent from this figure is the impact of the 2009-10 recession on recent fleet replacement spending levels.

Figure 6 Distribution of Fleet Assets by Model Year

FLEET REPLACEMENT PLANNING AND COSTS

At present, the City-wide fleet (excluding small tools and equipment) consists of 315 vehicles and pieces of equipment5. The distribution of assets by type is shown in Figure 7. Fleet Services has developed a long-term fleet replacement plan that identifies projected replacement dates for each asset in the fleet. Each year they meet with their customers to prioritize replacement requests based on operational need and funding availability. Final recommendations, along with a five-year replacement plan, are provided to City Council for final budget approval. The City fleet has an estimated total replacement cost (in 2014 dollars) of $35.4 million. Estimated asset purchase prices vary, by asset type, from $5,000 (e.g., small utility trailer) to $1.7 million (aerial ladder fire apparatus).

5 Note that small tools and other fleet assets with an individual replacement cost value estimated to be under $5,000 were not included in the fleet replacement analysis.

60

50

40

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20

10

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Model Year


15

Figure 7 Distribution of Fleet by Asset Type

In order to further evaluate the City’s fleet replacement practices, we quantified the long-term replacement costs of the fleet using our proprietary computer program CARCAP™ (Capital Asset Replacement Cost Analysis Program™). We used this program to develop fleet replacement plans and analyze various costs and other outcomes associated with their implementation. This program allows us to project the remaining life, future replacement dates, replacement costs, residual values, ages, book and fair market values, book and effective depreciation costs, and maintenance and repair costs of each individual asset in a fleet. CARCAP™ generates a replacement plan by 1) comparing the current age and odometer or hour meter reading of each individual asset in the fleet against recommended replacement criteria in age, kilometers, or engine hours for that type of asset; 2) projecting when each asset will reach each applicable criterion or threshold for replacement; and 3) estimating the purchase price of the asset in the year in which it will reach whichever threshold comes first. The specific steps we followed to determine the replacement costs of the City of Prince George’s fleet were the following: 1. Obtain a detailed inventory of all fleet assets;

2. Assign every asset in the inventory to a specific vehicle or equipment category or class;

3. Develop analysis parameters (e.g., recommended replacement cycles in months - in addition to the optimal cycles identified for the four asset categories discussed above - current purchase price, and purchase price inflation rate) for each asset class;


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4. Apply these parameters to the fleet inventory to develop a “baseline” fleet replacement plan that predicts the future replacement dates and costs of every individual asset in the fleet over the next 20 years; and

5. “Smooth” the baseline plan to obtain a more realistic replacement plan capable of being implemented.

Our analysis made no assumptions about future changes in the size or composition of the fleet. Using these replacement cycle guidelines, purchase prices, and other planning parameters, we developed the baseline replacement plan shown graphically in Figure 8. This plan projects future replacement dates and costs for each asset in the fleet each time during the 20-year analysis period that it meets the recommended age for replacement. This figure shows the sum of the resulting fleet replacement costs by year.

Figure 8 Baseline Fleet Replacement Plan

As can be seen from the exhibit, there is a backlog of assets in need of replacement, where “backlog” is defined as the number and replacement cost of units in the first year of a replacement plan that meet or exceed the recommended age for replacement. In the fleet, 167 assets – roughly 53 percent of the total of all the assets – will meet or exceed

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recommended replacement cycles in the first year of the plan. The estimated replacement cost of these vehicles (in 2015 dollars) is $13.4 million. Figure 9 below summarizes selected information on the fleet that can be gleaned from the baseline plan.

Figure 9 Fleet Replacement Statistics

Total number of assets in replacement analysis 315

Number of asset classifications 107

Current mean asset age (years) 9.6

De facto average replacement cycle (years) 19.2

Average recommended replacement cycle (years) 9.4

Average asset purchase price (2014 dollars) $ 112,445

Gross fleet replacement cost (2014 dollars) $ 35.4 M

Average annual fleet replacement spending requirement $ 3.8 M

Average annual replacement expenditures (2009-13) $ 1.7 M

Current replacement backlog $ 13.4 M

Number of assets that exceed recommended replacement age 167

Percentage of assets that exceed recommended age 53%

The above table indicates that the City is spending too little on fleet replacement to ensure that its fleet assets are replaced in a timely manner. The estimated replacement cost of all the vehicles in the fleet is $35.4 million. If the vehicles in the program are to be replaced every 9.4 years, the average annual replacement cost of the fleet would be $3.8 million (excluding the proceeds from the sale of used vehicles). Over the last five years, however, the City’s actual capital outlay for vehicle purchases averaged around $1.7 million per year. As can be seen in Figure 10, the baseline replacement plan has many peaks and valleys in future spending requirements, the largest of which would result from the actual replacement of more than $13.4 million worth of assets in the first year. The existing replacement backlog did not arise overnight and there is no reason to think that it can or should be eliminated overnight. In short, the baseline replacement plan is a very valuable benchmarking tool, but not a practical plan for modernizing the City of Prince George’s fleet. Since there is no compelling reason for the City to eliminate this backlog in a single year, the next step in our analysis was to create a “smoothed” replacement plan by modifying the initial replacement dates of many individual assets in the fleet. The results of this plan smoothing process are illustrated in Figure 10. While there are still some peaks and valleys in this “smoothed” replacement plan, it is more consistent in the early years of the plan. All subsequent analysis for the purposes of evaluating alternative financing approaches uses the smoothed fleet replacement plan.


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Figure 10 Smoothed Replacement Plan

FINANCING FLEET REPLACEMENT COSTS

Cities such as Prince George generally use one (or a combination) of methods for financing fleet capital costs:

Purchase with cash using funds appropriated on an annual ad hoc (year-to-year) basis;

Purchase with cash accumulated in a sinking or reserve fund, usually accompanied by a cost-charge back system that collects funds from fleet user organizations incrementally to defray the costs of the fleet assets they use;

Purchase with funds borrowed from financial institutions (e.g., an equipment loan, a master “lease-purchase” agreement, a line of credit, etc.) and/or investors (e.g., certificates of participation, general obligation bonds, etc.); and/or

Leasing from a fleet leasing company, the financing arm of a vehicle/equipment manufacturer; and/or another type of financial institution, such as a bank.

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There are advantages and disadvantages to each of these approaches, several of which are discussed below. Pros and Cons of Alternative Capital Financing Approaches

Outright Purchase with Ad Hoc Appropriations of Cash We refer to the use of annual, ad hoc appropriations of cash to finance the replacement of fleet assets as a “pay-before-you-go” approach. By this, we mean that the entire capital cost of replacing each asset in the fleet is paid at the beginning of the asset’s service life. The advantages and disadvantages of the cash financing approach can be summarized as follows. Advantages

This is an approach that is widely used in the public sector; therefore it is generally accepted in all branches of government and by the public. It is the simplest of the capital financing methods to administer.

There is no out-of-pocket interest expense. This can be a real advantage from a fiscal perspective but not necessarily from an economic one. Specifically, unless an organization has cash in excess of its needs, using cash to pay the full purchase prices of vehicles before they are used is not “free.” The cost of using cash in such a manner involves the opportunity that is lost to use the cash for other organizational priorities that might yield a higher “return” or, at a bare minimum, to earn interest on the cash by investing it.

Disadvantages

The use of this financing approach almost always leads to sub-optimal replacement decision making. This results from the inherent conflict, described earlier, between short-term budget making and vehicle total cost of ownership minimization, which requires a long-term perspective. If the marginal cost of replacing a vehicle is the full purchase price of a new vehicle, repairing an old vehicle will almost always be cheaper in fiscal terms than replacing it.

If no cost charge-back system or other incremental payment method exists, the ongoing cost of having a vehicle at the disposal of an organization is not apparent to vehicle users, leading to the inefficient deployment and utilization of fleet resources. Fleet users experience little economic benefit in disposing of underutilized or unneeded vehicles whose original purchase price they view as a sunk cost.

It is our experience that the cash financing approach is the least effective method for financing the replacement of fleet assets over the long term. Sinking Fund and Charge-Back System


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Although replacement spending requirements under a sinking fund approach are identical to those required if cash financing is used, replacement funding requirements are different. This is because using a sinking fund permits vehicles’ capital costs to be paid for incrementally (after a vehicle is first added to the fleet; the first-time purchase of a vehicle must be paid up front under this financing approach). That is, each year users are charged for a portion of the vehicle’s replacement cost (i.e. depreciation plus a replacement surcharge) and this is put into “savings” to pay for the replacement vehicle when the time comes. The advantages and disadvantages of the sinking fund financing approach are summarized as follows. Advantages

Replacement funding requirements (i.e., fiscal impacts) do not fluctuate significantly from year to year because using a sinking fund permits the capital costs of vehicles to be paid for incrementally. Smooth, predictable funding requirements increase the likelihood that sufficient funds will be made available to replace all vehicles in a timely manner because the annual budget process is never “blindsided” by unexpectedly large appropriation requests.

Sinking funds are often less of an annual target for decision makers who sometimes equate requests for capital appropriations with discretionary or quasi-discretionary spending needs.

Payment of regular charges for the use of each vehicle in the fleet encourages fleet user organizations to pay attention to how many and what types of vehicles they need to meet their business needs (in contrast to the cash financing approach where the ongoing costs of having assets at their disposal are largely ignored because they are perceived of as having been one-time expenses that, by definition, occurred in the past).

Disadvantages

This financing method requires rigorous and administratively complex fund management procedures, including the proper development and application of charge-back rates, to ensure that reserve fund inflows and balances are sufficient to meet replacement spending outflows. Failure to do so leads to depleting the fund balance or building up unnecessarily large fund balances.

The cash in a sinking fund is susceptible to being diverted to meet other spending needs or simply not used, usually out of an overabundance of caution, when budget dollars get tight.

Financing fleet growth to meet new programmatic needs is somewhat expensive because it requires that funds be appropriated to the user agency both for the entire purchase price of the new asset(s) and for the payment of the first year’s replacement charges for the asset(s).


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Despite these drawbacks, sinking funds are far superior to the cash financing approach in terms of sustaining replacement programs in the public sector and they work well for many government jurisdictions. Debt Financing and Leasing Like a sinking fund, debt financing allows organizations to spread the capital costs of fleet replacement purchases over the service lives of the vehicles in the fleet. However, rather than accumulating cash in a sinking fund to pay for replacement vehicle purchases, this approach involves borrowing money and repaying it after vehicles have been placed in service. The primary advantages and disadvantages of the debt financing and leasing approaches are summarized as follows. Advantages

As with a sinking fund, debt financing and leasing allow organizations to spread out the capital costs of fleet replacement purchases over the service lives of the vehicles in the fleet. This eliminates most of the year-to-year volatility in replacement funding requirements, and reduces the likelihood that fleet replacement spending will be subordinated to other priorities and needs, particularly during lean budget years.

Allows the cost of money (i.e., interest charges) to be passed on appropriately to all programs.

If loan or lease payments are made by fleet user agencies directly or via an internal cost charge-back system, greater attention to vehicle selection and utilization will occur. This results in fleet size and composition that is better attuned to actual fleet user agency operating needs and, hence, lower overall fleet costs.

Disadvantages

As indicated above, the use of debt creates competition for the use of statutorily (and often politically) limited borrowing capacity with capital improvement project funding needs that usually enjoy stronger political support than does the routine replacement of vehicles.

One of the perceived drawbacks of debt financing is the cost of borrowing money; i.e., real or imputed interest charges. There is no question that interest charges increase the total capital cost of a vehicle. However, to the extent that debt financing enables an organization to replace vehicles that it otherwise would keep in service for excessive periods of time, interest payments may actually result in lower vehicle total cost of ownership.

It may be difficult to change back to a sinking fund or cash financing approach once an organization has committed to debt or lease financing.


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Since about mid-2010, the City has been financing the replacement of vehicles primarily by entering into 5-year capital “leases” (i.e., loans) with the Municipal Finance Authority (MFA). Regardless of a given asset’s useful life, the City secures a 5-year loan and pays off the principal balance at the end of the 5th year. In the case of a unit that has a service life of 12 years, the City makes payments on the first 5 years of the loan on a 12 year loan (roughly 40 percent of the acquisition cost) and then pays the balance at the end of the 5th year. In the case of a unit that has a service life of 8 years, the payment schedule is adjusted to a maximum of 50 percent of the acquisition cost over 5 years. Again, the balance is paid off at the end of the 5 years. Any remaining balance (i.e., the amount not repaid during the initial five year period) is funded by the Mobile Equipment Replacement Reserve (MERR). The MERR was initially established to work as a traditional sinking fund. Users were charged a rental rate that included a capital and operating component. The capital portion of the rate was calculated to recover the full capital cost of the asset and a surcharge to provide for the additional cost of the asset when it was replaced. These revenues were deposited into the MERR to provide funds for the future replacement of the asset. All disposal proceeds from the sale of decommissioned fleet assets were also deposited into the MERR. However, since 2010 when the City moved to the MFA financing approach, the capital charge-back rate has not been tied to the actual capital cost of the asset. For example, if a Zamboni is acquired using MFA financing under this approach, and has an expected useful life of 10 years, a monthly loan payment is calculated for 120 months. However, the customer is only charged the actual monthly loan payment for the initial 60 months (the maximum term limit allowed without electoral assent). There is no attempt to recover the remaining 60 months’ worth of payments from the customer. The loan balance is then paid at the end of 60 months with funds that have been previously deposited in the MERR. The current balance in the MERR is $3.7 million. Of that amount, the City is already committed for existing loan buyouts of $2.1 million. While a debt financing approach for fleet renewal is a viable financing alternative, the fact that the amount charged to the customer does not equate to the actual capital cost of the asset is not appropriate or sustainable with the current funds in the MERR. The payback period should be aligned as closely as possible to the actual expected useful life of the asset. We understand that the current 5 year loan payback period is to avoid additional approval of the electors. Comparison of Replacement Financing Options

The final step in this component of the project was to explore the merits of several replacement financing approaches that might merit consideration by the City. The approaches selected for investigation were: outright purchase using cash from ad hoc (year-to-year) appropriations, a sinking fund, and loans. We made this comparison using the smoothed replacement plan shown in Figure 10.


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Our fleet replacement planning and cost analysis software CARCAP is designed to calculate funding requirements, by vehicle and by year, under each of these approaches. Outright Cash Purchase In the case of cash appropriations, the annual funding requirement is equal to the net fleet replacement costs (purchase price less sales proceeds) of replaced assets, as identified in Figure 11. Under this approach the City would be required to meet the total funding requirements each year with cash.

Figure 11 Replacement Funding Requirements under Outright Cash Purchase Financing

Approach

Replacement Reserve Fund In the case of a replacement reserve or sinking fund, 100 percent of the purchase price is paid from the sinking fund in the year the vehicle is replaced and proceeds from the sale of the vehicle are placed in the fund in the year in which it is disposed of. Budgetarily, the annual cost is the sum of replacement rate income from all vehicles.

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The replacement rates we calculated for each vehicle in the fleet include two components: 1) a depreciation charge that is based on the original purchase price of the asset less its projected residual value at the end of its useful life; and 2) a replacement surcharge, which is computed based on the long-term difference between reserve fund starting balance, income from depreciation charges, used vehicle sale proceeds, and interest earnings, and outlays for replacement purchases. The surcharge is calculated so that each vehicle is appropriately charged based on its percentage share of the total capital costs of all the assets in the sinking fund-based replacement program. Figure 12 shows annual fleet replacement costs, funding requirements (i.e., replacement charges), and the sinking fund balance over a 20-year period. The beginning balance for FY 2015 is assumed to be $1.6 million (the current MERR balance less previously committed MERR funds for projected MFA loan “buyouts”). The bars in this exhibit represent gross fleet replacement costs each year; the line shows year-to-year sinking fund revenues, which are the amounts that the City would charge fleet users for their assigned vehicles; the yellow triangles represent additional infusions of cash required to maintain a positive fund balance, and the shaded area represents the fund balance in each year.


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Figure 12 Replacement Funding Requirements under Reserve Fund Financing Approach

Note that the fund balance increases in the years leading up to major spikes in replacement spending needs. It is this fund balance that serves to smooth out the peaks and valleys in replacement funding requirements. Because a sinking fund permits the payment of fleet capital costs incrementally, spikes in these costs usually do not result in the deferral of fleet replacement purchases and the development of large replacement backlogs (as long as there is the political will to expend the funds). As can be seen, there is not enough cash in the sinking fund to pay for the implementation of the smoothed replacement plan we developed. Additional infusions of cash, either a large infusion initially or smaller infusions over a period of years, as depicted in Figure 12 would be required to maintain a positive fund balance. Loan Financing In the case of a loan financing program, the funding requirement is a monthly or annual loan payment amount based on a user-defined financing period and (all-in) cost of borrowing; a loan pay-off amount, applied in the event that a vehicle must be retired before the end of the assumed financing period; and proceeds from the sale of the vehicle at the end of its life, which are assumed to be received in the year in which it is replaced. We utilized our recommended replacement cycles as the loan term except in instances

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where the cycles exceed 120 months where the loan term was set at 120 months and not the current 5 year payback term limits under the current approach. Charge-back rates would be set to recover the full cost of the loan and no “balloon” payments would be required at the end of 5 years. The use of this financing approach would require electoral assent since it is committing the City to payments for a period exceeding five years. Under this approach, there is no need to maintain a capital equipment reserve fund (i.e. MERR). Figure 13 shows the annual replacement costs and funding requirements using a loan financing program.

Figure 13 Replacement Funding Requirements under Loan Financing Approach

Figure 14 compares several replacement financing approaches. The approaches selected for investigation were: ad hoc appropriations of cash, a sinking fund, and debt financing (loans). CARCAP™ is designed to calculate funding requirements, by vehicle and by year, under each of these approaches.

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Figure 14 Comparative Replacement Funding Requirements under Alternative Capital

Financing Approaches

Another obvious distinction between the cash and reserve fund approaches, on the one hand, and the debt approach on the other, is the sizable near-term budgetary savings that would be realized by moving to a more traditional debt financing approach where the cost of the asset is paid for over the expected useful life of the asset. A side-by-side comparison of the fiscal impacts of the three financing approaches over the next 1, 5, and 10-year periods are is shown in Figure 15.

Figure 15 Comparative Funding Requirements and Potential Budgetary Savings

Approach Year 1 Years 1-5 Years 1-10

Outright Cash $3.9 M $20.8 M $39.8 M

Reserve Fund $2.7 M $19.6 M $38.6 M

Loans $0.1 M $7.0 M $25.3 M

Budgetary Savings Using Loans v. Reserve Fund

$2.7 M $12.7 M $13.3 M

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Ad Hoc Cash Purchases Reserve Fund Revenue + Cash Infusions Loan Payments

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As can be seen, the City could realize budgetary savings estimated at $12.7 million over the next five fiscal years by using a debt financing approach where loan terms (and payments) are tied closely to the expected useful life of the assets over a reserve fund approach. Although this would require electoral assent, it would also eliminate the need for the MERR, freeing up an additional $1.6 million in funds.

CONCLUSIONS

The City is not replacing its fleet assets in an effective manner under its current financing approach of using MFA financing where repayment of the loan is capped at 5 years to avoid electoral assent. An indication of how well the City has been served by this financing approach is the current average age of the assets in its fleet, which is roughly double what it should be. Replacements have been significantly curtailed over the last several years, most likely due to concerns that the MERR balance would not be sufficient to fund additional loan payoffs if new approvals were acquired using the current approach.

RECOMMENDATIONS

Adopt the changes to replacement cycles contained in this report (Figure 5). Ensure these cycles are followed in order to lower the overall age of the fleet.

Depending upon the capital financing approach used, and not taking into account current MFA loan obligations (which would be covered by a portion of the current MERR fund balance), the average gross replacement cost of the City’s fleet ranges from $2.5 to $4.0 million per year over the next 10 years. These amounts would be reduced by the proceeds from the sale of used vehicles which are estimated to average $0.53 million per year over the same period. Thus, average annual net fleet replacement spending requirements would be approximately $2.0 to $3.5 million per year.

o To the extent that the City continues with the current approach (MFA), capital charge-back rates should be calculated to recover the full cost of the asset, including the monthly loan payment, fees, taxes, and the outstanding balance at the end of the 5 years.

o To the extent that a more traditional debt financing approach (i.e., aligning loan

terms to the expected useful life of the asset) is selected, users should be charged capital charge-back rates to recover the full cost of the loan and any applicable fees, taxes, and other costs. Elector assent may be required for this approach.

o To the extent that the decision is made to revive the sinking fund financing

approach, establish additional policies and procedures, including formal memoranda of understanding with City budget and finance officials and fleet user agencies, aimed at using this approach in the manner intended – that is, replacing fleet assets in accordance with established guidelines so that de facto


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replacement cycles do not continue to be significantly more than the intended cycles.


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APPENDIX

OPTIMAL REPLACEMENT CYCLE ANALYSIS - LOADERS

OPTIMAL REPLACEMENT CYCLE ANALYSIS - GRADERS

OPTIMAL REPLACEMENT CYCLE ANALYSIS – SIDEWALK SNOW MACHINE


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Figure 16

Optimal Replacement Cycle Analysis for Loaders

Replacement Cycle (years) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Year-End Odometer Reading (hrs) 1,670 3,340 5,010 6,680 8,350 10,020 11,690 13,360 15,030 16,700 18,370 20,040 21,710 23,380 25,050

Capital Cost

Depreciation Schedule 70.0% 58.5% 48.8% 40.8% 34.1% 28.5% 23.8% 19.9% 16.6% 13.9% 11.6% 9.7% 8.1% 6.7% 5.6%


Capital Cost $ 91,800 $ 35,285 $ 29,473 $ 24,618 $ 20,562 $ 17,175 $ 14,346 $ 11,983 $ 10,009 $ 8,360 $ 6,983 $ 5,833 $ 4,872 $ 4,069 $ 3,399

Operating Costs

Annual M&R Cost (2014$) $ 4,174 $ 4,431 $ 4,702 $ 4,991 $ 5,297 $ 5,622 $ 5,967 $ 6,333 $ 6,722 $ 7,134 $ 7,572 $ 8,037 $ 8,530 $ 9,053 $ 9,609

Annual Fuel Cost (2014$) $ 32,375 $ 33,683 $ 35,044 $ 36,460 $ 37,933 $ 39,466 $ 41,061 $ 42,720 $ 44,446 $ 46,241 $ 48,110 $ 50,053 $ 52,076 $ 54,180 $ 56,369

Total Annual Operating Cost (2014$) $ 36,550 $ 38,114 $ 39,747 $ 41,451 $ 43,230 $ 45,088 $ 47,028 $ 49,053 $ 51,168 $ 53,376 $ 55,682 $ 58,090 $ 60,606 $ 63,233 $ 65,978

Cumulative Operating Cost (2014$) $ 36,550 $ 74,663 $114,410 $155,861 $199,091 $244,179 $291,207 $340,260 $391,428 $444,803 $500,485 $558,576 $619,182 $682,415 $ 748,393

Avg Annual Operating Cost (2014$) $ 36,550 $ 37,332 $ 38,137 $ 38,965 $ 39,818 $ 40,697 $ 41,601 $ 42,533 $ 43,492 $ 44,480 $ 45,499 $ 46,548 $ 47,629 $ 48,744 $ 49,893

Total Cost

Annual Total Cost $128,350 $ 73,399 $ 69,219 $ 66,069 $ 63,793 $ 62,263 $ 61,374 $ 61,036 $ 61,176 $ 61,736 $ 62,665 $ 63,923 $ 65,478 $ 67,303 $ 69,377

Cumulative Total Cost $128,350 $201,748 $270,968 $337,036 $400,829 $463,092 $524,466 $585,501 $646,678 $708,413 $771,078 $835,001 $900,479 $967,782 $1,037,159

Equivalent Annual Cost $128,350 $101,280 $ 90,908 $ 84,970 $ 80,981 $ 78,088 $ 75,906 $ 74,234 $ 72,949 $ 71,971 $ 71,244 $ 70,728 $ 70,392 $ 70,211 $ 70,166


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Figure 17 Optimal Replacement Cycle Analysis for Graders

Replacement Cycle (years) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Year-End Odometer Reading (hrs) 1,238 2,476 3,714 4,952 6,190 7,428 8,666 9,904 11,142 12,380 13,618 14,856 16,094 17,332 18,570

Capital Cost

Depreciation Schedule 70.0% 58.5% 48.8% 40.8% 34.1% 28.5% 23.8% 19.9% 16.6% 13.9% 11.6% 9.7% 8.1% 6.7% 5.6%


Capital Cost $100,500 $ 38,629 $ 32,266 $ 26,951 $ 22,511 $ 18,803 $ 15,705 $ 13,118 $ 10,957 $ 9,152 $ 7,645 $ 6,385 $ 5,333 $ 4,455 $ 3,721

Operating Costs

Annual M&R Cost (2014$) $ 4,299 $ 4,562 $ 4,842 $ 5,139 $ 5,455 $ 5,790 $ 6,145 $ 6,522 $ 6,922 $ 7,347 $ 7,798 $ 8,277 $ 8,784 $ 9,324 $ 9,896

Annual Fuel Cost (2014$) $ 30,620 $ 31,857 $ 33,144 $ 34,483 $ 35,876 $ 37,326 $ 38,834 $ 40,403 $ 42,035 $ 43,734 $ 45,501 $ 47,339 $ 49,252 $ 51,242 $ 53,312

Total Annual Operating Cost (2014$) $ 34,918 $ 36,419 $ 37,986 $ 39,622 $ 41,331 $ 43,115 $ 44,979 $ 46,925 $ 48,958 $ 51,081 $ 53,299 $ 55,616 $ 58,036 $ 60,565 $ 63,208

Cumulative Operating Cost (2014$) $ 36,550 $ 74,663 $114,410 $155,861 $199,091 $244,179 $291,207 $340,260 $391,428 $444,803 $500,485 $558,576 $619,182 $682,415 $ 748,393

Avg Annual Operating Cost (2014$) $ 34,918 $ 35,669 $ 36,441 $ 37,236 $ 38,055 $ 38,899 $ 39,767 $ 40,662 $ 41,584 $ 42,533 $ 43,512 $ 44,521 $ 45,560 $ 46,632 $ 47,737

Total Cost

Annual Total Cost $135,418 $ 75,048 $ 70,252 $ 66,573 $ 63,842 $ 61,918 $ 60,684 $ 60,043 $ 59,915 $ 60,233 $ 60,943 $ 62,001 $ 63,370 $ 65,020 $ 66,929

Cumulative Total Cost $135,418 $210,466 $280,718 $347,291 $411,134 $473,052 $533,736 $593,779 $653,694 $713,928 $774,871 $836,872 $900,242 $965,263 $1,032,192

Equivalent Annual Cost $135,418 $105,679 $ 94,217 $ 87,610 $ 83,133 $ 79,853 $ 77,352 $ 75,405 $ 73,880 $ 72,690 $ 71,773 $ 71,084 $ 70,590 $ 70,264 $ 70,085


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Figure 18 Optimal Replacement Cycle Analysis for Sidewalk Snow Machines

Replacement Cycle (years) 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Year-End Odometer Reading (hrs) 476 952 1,428 1,904 2,380 2,856 3,332 3,808 4,284 4,760 5,236 5,712 6,188 6,664

Capital Cost

Depreciation Schedule 70.0% 58.5% 48.8% 40.8% 34.1% 28.5% 23.8% 19.9% 16.6% 13.9% 11.6% 9.7% 8.1% 6.7%


Capital Cost $38,400 $ 14,760 $12,328 $ 10,298 $ 8,601 $ 7,184 $ 6,001 $ 5,012 $ 4,187 $ 3,497 $ 2,921 $ 2,440 $ 2,038 $ 1,702

Operating Costs

Annual M&R Cost (2014$) $ 4,299 $ 4,562 $ 4,842 $ 5,139 $ 5,455 $ 5,790 $ 6,145 $ 6,522 $ 6,922 $ 7,347 $ 7,798 $ 8,277 $ 8,784 $ 9,324

Annual Fuel Cost (2014$) $ 3,359 $ 3,494 $ 3,635 $ 3,782 $ 3,935 $ 4,094 $ 4,260 $ 4,432 $ 4,611 $ 4,797 $ 4,991 $ 5,193 $ 5,402 $ 5,621

Total Annual Operating Cost (2014$) $34,918 $ 36,419 $37,986 $ 39,622 $ 41,331 $ 43,115 $ 44,979 $ 46,925 $ 48,958 $ 51,081 $ 53,299 $ 55,616 $ 58,036 $ 60,565

Cumulative Operating Cost (2014$) $ 7,657 $ 15,714 $24,192 $ 33,113 $ 42,503 $ 52,387 $ 62,792 $ 73,745 $ 85,278 $ 97,423 $110,211 $123,681 $137,867 $152,811

Avg Annual Operating Cost (2014$) $ 7,657 $ 7,857 $ 8,064 $ 8,278 $ 8,501 $ 8,731 $ 8,970 $ 9,218 $ 9,475 $ 9,742 $ 10,019 $ 10,307 $ 10,605 $ 10,915

Total Cost

Annual Total Cost $46,057 $ 22,816 $20,806 $ 19,219 $ 17,991 $ 17,068 $ 16,405 $ 15,966 $ 15,720 $ 15,641 $ 15,710 $ 15,909 $ 16,225 $ 16,646

Cumulative Total Cost $46,057 $ 68,874 $89,680 $108,899 $126,890 $143,959 $160,364 $176,330 $192,050 $207,691 $223,401 $239,310 $255,534 $272,180

Equivalent Annual Cost $46,057 $ 34,608 $30,143 $ 27,532 $ 25,735 $ 24,395 $ 23,352 $ 22,522 $ 21,852 $ 21,310 $ 20,873 $ 20,523 $ 20,248 $ 20,037

Documents

SNOW AND ICE OPERATIONS AND FLEET SERVICES BEST … · practice assessment, snow and ice control operations and fleet replacement practices. This report reflects the findings and