Fleet Management Consolidation Update

1. Fleet Management Consolidation Update Lloyd Waguespack, Deputy Chief of Staff, Mayor’s Office Andy Icken, Chief Development Officer, Mayor’s Office

2. Estimated Fleet Savings Grand Total Savings/Revenues • FY2011 $ 9,963,000 • FY2012 $11,866,000 • Grand Total $21,829,000

3. Table of Contents • Risk/Challenges to Fleet Consolidation • Components of Fleet Management Consolidation • Departments and how they are affected • Details of current status of the fleet • Plans and projected savings

4. Risks/Challenges to Fleet Consolidation • Moving too quickly – The consolidation plan yields the elimination of both maintenance facilities and fuel sites. The plan must be well thought out and must be flexible enough in both timelines and in scope to not adversely affect the citizens of the city. • Avoiding an inconsistent approach We must establish and document clear and well defined policies and procedures early in the planning. The new management will then have to enforce these policies and procedures consistently throughout the implementation phases. • Absence of proper metrics - The effective use of Asset Works M5 and the use of dashboards will have to be setup at the onset so that we can report back to the Mayor and City Council. • Departmental push-back – We will need a consistent and high degree of top down governance as we move through the departments.

5. Risks/Challenges to Fleet Consolidation • Maintaining the ability to provide the core services - We cannot compromise the services of our existing departments. • Well defined boundary lines - Communication and clear lines of responsibility will be key factors in the success of the project. • Developing strong leadership - The new Director must be able to work very closely with and communicate with all Directors. The new Director will have to have a clear understanding of each department’s core functions and the need to not have those functions compromised. • Impact on the labor force - There must be a clear understanding (buy-in) prior to implementation of the plan and the eventual results/impact on the labor force and how that labor force will be aligned in the new organization.

6. Risks/Challenges to Fleet Consolidation • Challenges (continued) • Funding and budget parameters must be properly aligned at the outset to ensure a proper charge back system to the departments. • Customer focused attitude - The performance metrics must be aligned along departmental lines to insure effective monitoring of the department.

7. Components of Consolidation • Maintenance • Fuel • Strategic Vehicle Parts Partnership • Take Home Vehicles • Capital Asset Renewal and Replacement Requirements

8. Details of the current Fleet • The study of Fleet Management started back in January 2010. After considerable analysis the city hired CST Fleet Services to further look at the data and make recommendations for moving forward with a plan to consolidate the city’s fleet management operations. CST presented a Consolidation plan to the City at the end of July. • CST Fleet Services is a consultant that specializes in the area of fleet consolidation • Experience • City of Chicago • City of Detroit • Fedex • State of Indiana

9. Details of Fleet Heavy DutyLight DutyOtherTotal • Solid Waste 402 119 168 689 • Public Works and Engineering 1,738 2,005 769 4,512 • Police Department 106 3,823 139 4,068 • Fire Department 385 546 218 1,149 • Parks 390 330 530 1,250 • Aviation 274 425 275 974 • BARC 0 34 0 34 • Other 83 824 76 983 • Totals 3,378 8,106 2,175 13,659 • Average collective life of these vehicles is 7.4 years

10. Details of the current Fleet • 29 Maintenance Facilities • 250 mechanics • 152 support personnel • 277 work bays – 15,400 bay hours • Only 6 sites have a second shift • Budget – Maintenance Facilities • Operations $106 M • Capital $ 48 M

11. Details of the current Fleet • 99 fuel facilities of which 3 are currently closed (80% of the current fuel consumption by city vehicles is serviced by 24 of these sites) • Budget - Fuel Consumption • Consumption -11 Million Gallons • Cost - $28 M

12. Details of the current Fleet • 19 parts rooms in these 29 maintenance facilities (40 Personnel) • All PWE and Parks locations contract with NAPA for parts inventory (NAPA owns and operates the parts room and personnel and the city only pays for the parts it uses) • The City has a current RFP to extend the Strategic Vehicle Parts Partnership (SVPP) currently being used by PWE and Parks to all city maintenance facilities

13. Details of the current Fleet • Take Home Vehicles • 736 Municipal Employees – We have performed a preliminary justification analysis by the departments to get us to this number, initially at 900 vehicles • 900 Police Personnel ( Police Personnel currently pay $75 per pay period for the personal use of a vehicle)

14. Current Technology • Asset Works M5 – Implemented in all facilities – tracts all maintenance on every vehicle in the city • Fuel Force – Partially implemented – Controls the distribution of fuel to city only vehicles. Note: These two pieces of software are integrated so that at any point in time we can notify a vehicle operator that planned maintenance is required on a vehicle based on predefined parameters

15. New Fleet Management Plan • Maintenance Facilities – Cut back to 11 – 15 sites • Mechanics 251 • Support Staff 64 • All facilities will run a second shift • 2 or 3 facilities are targeted for a third shift • 209 work bays – 19,680 bay hours • Will perform most major maintenance of vehicles in the second shift , leaving the working hours available for emergency service type work • Fuel Sites will be reduced down to a number between 30 and 40 • SVPP – Once implemented in all facilities will reduce the 40 personnel (Bidding Vendors will be given credit for a plan to hire city personnel)

16. New Fleet Management Plan • Take Home Vehicles • HPD – Changes in the use policies for police officers is being discussed as part of the Meet and Confer process that is currently underway. It is anticipated that the rate officers pay to take home their vehicle will increase to $105 per pay period. • Other Personnel – The city continues to analyze options including charging the same $105 per pay period that is paid by police officers. Other options include lease programs or vehicle allowances both tiered and flat rates.

17. Timelines • Creation of the Fleet Management Department (FMD) – Plan for an ordinance to be brought before City Council on October 13th • Approve a two year contract at the October 13th Council Meeting with CST Fleet Services to help the city with the fleet consolidation implementation plan • Announce a candidate for Director of Fleet Management within the next three weeks • Finalize the SVPP bid process and award a contract to be effective about November 1st • The project completion is targeted for the last quarter of FY 2012 (24 months)

18. Timelines • Phase 1 (FY2011 2nd Quarter) • Close 44 fuel sites that are minimally used. • Purchase additional computer software from Asset Works to facilitate the ordering of parts from the SVPP vendor • Begin working with departments to evaluate the size and age of the city’s fleet and develop a five year capital plan for fleet turnover and determine replacement policies • Phase 2 (FY2011 3rd Quarter) • Close 1 Solid Waste Shop, reassign mechanics and support staff as needed • Close additional fuel sites as they are identified • Buyout by the SVPP vendor of the Solid Waste inventory – • Evaluate the SWD fleet to determine where cuts can be made to reduce the size of the fleet – both heavy equipment and light duty vehicles • Complete the installation of Fuel Force in all Fuel Sites to better control the consumption of fuel by city personnel

19. Timelines • Phase 3 (FY2011 4th Quarter) • Close 4 or 5 PWE and 2 Parks Maintenance Shops– reassign mechanics and support staff as needed. (This will result in some reduction in support staff) • Close additional fuel sites as they are identified • Purchase additional computer software from Asset Works to facilitate the ordering of parts from the SVPP vendor • Buy out of both HFD and HPD Parts rooms by the SVPP vendor (Parts room personnel will be encouraged to apply for positions with eth SVPP vendor) • Evaluate fleet size for both PWE and Parks to determine the level of downsizing • Phase 4 (FY2012 1st Quarter) • Close 1 Fire Shop - reassign mechanics and support staff as needed (This will result in some reduction in support staff) • Close additional fuel sites as they are identified

20. Timelines • Phase 5 (FY2012 2nd Quarter) • Close 5 or 6 HPD Maintenance Shops– reassign mechanics and support staff as needed. (This will result in some reduction in support staff) • Close additional fuel sites as they are identified • Evaluate fleet size for HPD to determine any level of downsizing • Phase 6(FY2012 3rd & 4th Quarters) • Continue to refine and improve the FMD organization • Continue to evaluate and monitor the size and condition of the city’s fleet

21. Consolidation Estimated Fleet Savings • Maintenance • $6.243M in on-going savings due to the downsizing of the staff and overhead costs for closed facilities • Fuel • $605K in one-time savings due to overhead costs of operating the closed sites • $1.125M in on-going savings due to better controls in the distribution of fuel • SVPP • $3.141M in one time revenues due to the buy out of inventory in SWD, HPD and HFD by the SVPP vendor • $2.634M in on-going savings due to reduction in staff and reduction in overhead costs

22. Consolidated Fleet Savings • Fleet Usage and Sizing • $2.804M in one-time revenues due to sale of obsolete and downsizing equipment and vehicles • $5.277M in on-going savings due to maintenance and operational costs reductions for sold or obsolete fleet and reduction in the take home vehicles • Grand Total Savings/Revenues • FY2011 $ 9,963,000 • FY2012 $11,866,000 • Grand Total $21,829,000 • Note: These savings do not include the sale of any property that becomes available as a result of the projected closures of facilities. That evaluation will be made at the time the site is closed and a determination is made as to any remediation that has to occur at the site before we can sell the property.

23. Questions?