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HomeMy WebLinkAboutC-3041 - Fleet Maintenance & Procurement Study, BA-042 (tied in with commuting vehicles?)F- 1 L E 40 AGENDA ITEM NO. 27 CITY OF NEWPORT BEACH Office of the City Manager November 12, 1996 TO: Honorable Mayor and Members of the City Council FROM: Kevin J. Murphy, City Manager SUBJECT: COMMUTING VEHICLES '^ Lit, BACKGROUND On October 28th the City Council continued discussion of this matter to November 12th. The general topic is the number of vehicles within the City's vehicle fleet which are permitted to be utilized for commuting to and from work, in addition to their primary use during the workday. The City currently has no formal written policies in this regard, but based on recent City Council discussion of this issue, the number of vehicles permitted to be utilized for commuting purposes has been reduced from 59 to 38. In most instances the reduction has occurred as a result of retirement, resignation or conversion to an auto allowance which has been folded into an employee's salary. Today, there are six employees who remain with the City who converted the use of a City vehicle to an allowance /salary. In addition to the 38 commuting vehicles, there are five vehicles utilized for car pooling which are part of our current AQMD Rideshare Plan. The carpooling requirement is also a requirement of a Coastal Development Permit issued by the Coastal Commission to the City in 1990 in conjunction with the widening of Newport Boulevard between 32nd and Via -� Lido. / b 96gL This matter was continued to receive a final report from Arroyo Associates, Inc. a 7 consultant reviewing the City's fleet maintenance procurement practices. The report is still in draft final form and in review by the multi - department task force to guarantee accuracy of the information and assumptions prior to presentation to the City Council. The internal review of the draft final is focused on several areas identified by the consultant for improvement; however, the recommendation regarding commuting vehicles is not an area of further review. The Arroyo Associates report will recommend that... "a take home policy should be developed that precludes the taking home of City equipment unless that position is on paid call -back status. In lieu of assigned vehicles, the City may wish to consider providing automobile allowance or mileage reimbursement for travel on City business. Implementation of this recommendation would reduce -2- the City's need for this equipment, thereby reducing the cost of maintenance and replacement." For additional reference for the City Council, I have attached several prior documents including a June 26, 1995 memorandum and a more recent September 23, 1996 memorandum on this subject. DISCUSSION As stated above, the City has been reducing the number of City vehicles permitted to be utilized for commuting to and from work by City employees over the past four years. The ultimate objective is to reduce the number of employees absolutely needing vehicles for after hours response. While this has been an informal and unstated policy which has resulted in the phase out of 21 commuting vehicles, if the City Council wishes to accelerate the reduction of commuting vehicles it would be appropriate to give City staff further direction and policy guidance. City staff is currently in the process of creating an Administrative Policy Manual to pull together past and present administrative directives on a variety of subjects. By January 1 st the Policy Manual will be issued, incorporating a wide variety of policies on internal administrative processes and procedures. A • policy on the use of City vehicles will be included within the Administrative Policy Manual, including restrictions on the number of vehicles permitted to be used for commuting purposes, in addition to their primary workday use. PROPOSED CITY POLICY In creating a City Administrative Policy on City vehicle usage, it is proposed that the policy provide that City vehicles be permitted to be utilized for commuting purposes only by: A. On -call emergency response personnel; and B. Key executive Management staff On -call emergency personnel would include first responders from Fire /Marine, General Services, Public Works (Utilities Division) and Police. Key executive management would include the City Manager, City Attorney, Police Chief, Fire /Marine Chief, General Services Director and Public Works Director. This new policy will require the City staff, by State law, to meet and confer with all of the City employee groups as agreements are negotiated in the coming months. This policy will also require discussion with unrepresented employees who received authorization prior to 1992 to utilize City vehicles for commuting purposes in conjunction with compensation adjustments. The policy will also require the staff to examine storage facilities for certain vehicles and additional -3- parking spaces for the increased number of vehicles at the City Hall complex and Police Station. As the number of commuting vehicles is reduced, it isn't anticipated that the total number of City vehicles will be reduced since these vehicles are now widely utilized during the workday. However, the elimination of commuting miles will reduce the amount of fuel used, number of miles driven per year, extend the useful life of the vehicle, reduce City liability exposure during use in the commute to and from work and bring the City into conformity with other public and private employers on the number of vehicles utilized for commuting purposes. RECOMMENDATION The City Council direct the City Manager to: 1. Implement an Administrative Policy reducing the number of City vehicles utilized for commuting purposes to on -call emergency • personnel and key executive management staff; and 2. Meet and confer with employee associations and key and management personnel as necessary to implement the policy. • AGE NDA_ITEK+NO. • CITY OF NEWPORT BEACH Office of the City Manager October 28, 1996 TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS FROM: Kevin J. Murphy, City Manager SUBJECT: COMMUTING VEHICLES On the September 23rd City Council agenda, the City Council directed that this matter return with the results of the study on the City's fleet and fleet maintenance. This study was distributed on October 22nd in Preliminary Draft form to the City Department Directors who are participating as the Task Force Study Group. The Preliminary Draft has provided less detail and recommendations than anticipated on the issue of commuting vehicles and we have asked the consultant to revisit the issue and provide recommendations that are comprehensive and thoroughly researched anticipating that the City Council is looking for complete staff and consultant effort on this matter. The work on this has commenced by the consultant and we will have the item for the City Council on November 12th for your review and consideration. RECOMMENDATION The City Council continue the discussion on Commuting Vehicles to November 12, 1996. 40 0 0 CITY OF NEWPORT BEACH • Office of the City Manager July 12, 1995 TO: Administrative Services Director Assistant City Manager, Planning and Building Community Services Director Fire /Marine Chief General Services Director Police Chief Public Works Director FROM: Kevin J. Murphy, City Manager SUBJECT: COMMUTER VEHICLES AND AUTO ALLOWANCES As you know, the City Council has asked staff to review the current practices of the City on commuting vehicles and auto allowances and report back to them for further consideration of this issue. If you didn't see my earlier report to the City Council with the Budget Checklist items, I've attached it for your • information. Before reporting back to the City Council, I'd like to receive your input on the vehicles which are now used for on -duty activities and commuting purposes. If the City Council were to eliminate all vehicles now commuting to work, I'd specifically like to know your thoughts on the impact. If the City Council were to eliminate commuting vehicles and replace them with auto allowances, how would this impact your operation during the workday, if at all? If the City Council were to phase out the use of commuter vehicles, how would you propose that it take place? I realize that we've spoken about this issue many times, but I believe that the City Council will deal with this issue in the next few weeks. If this issue had an easy solution that would be perceived fair by all, it would have been resolved long ago. As you know, it is my hope over time to eliminate nearly all commuting vehicles and auto allowances. I have embarked on that course over the last three years and will continue that practice provided the City Council concurs with this direction. If you could consider this issue and forward to me a brief (one or two pages) memo on the matter by July 18th, it would help me formulate a response to the City Council for our meeting on the 24th. Thanks for your help and assistance. KJM:kf Attachment CITY OF NEWPORT BEACH Office of the City Manager • June 26, 1995 TO: Honorable Mayor And Members Of The City Council FROM: Kevin J. Murphy, City Manager /kA. SUBJECT: COMMUTER VEHICLES /BUDGET CHECKLIST BACKGROUND Following the City Council meeting on June 19th, Councilmember Norma Glover clarified her request for placement of an item related to employees utilizing City vehicles for on- the -job use and commuting purposes on the City Budget Checklist for straw voting on June 26th. Specifically, Councilmember Glover has requested that the City Council consider the elimination of non - safety employees utilizing vehicles for commuting purposes. Below is a summary of information related to this item and the various issues associated with its implementation. DISCUSSION • The City staff has been reviewing the number of City employees utilizing City vehicles for business and commuting purposes for the last three years. During that time period, various proposals to reduce the number of vehicles used for commuting purposes have been reviewed but none implemented nor formally presented to the City Council for action or authorization to meet and confer as necessary with impacted represented or unrepresented employees. As additional information, it has been indicated that prior to the passage of Proposition 13 in 1978 an extensive number of City staff members utilized vehicles for commuting purposes to permit emergency response after normal business hours and as a fringe benefit. Furthermore, after the passage of Proposition 13 the City Council substantially reduced the number of vehicles that were permitted to be used for commuting purposes; however, over the passage of time the number increased to the point that in 1992 there were a total of 59 vehicles identified that were permitted for commuting purposes. Of this number, 23 vehicles (sedans and motorcycles) were utilized by Police and Fire Department personnel. Of the remaining 36, four were utilized in a carpooling program to assist the City in meeting its Rideshare goals as required by the Air Quality Management District. 0 0 • Since the original survey in mid -1992, the number of commuting vehicles has been gradually reduced in the non - safety group from 36 to today's level of 18. This has been accomplished through normal attrition, wherein as new employees have been hired to replace former occupants of commuter vehicles the benefit has not been extended or in the case of six employees they have converted to an auto allowance. Of these six, two will be retiring from the organization in the next three months, and one within the next six months. In replacing these employee positions there will be no vehicle utilized for commuting purposes or allowances offered. A list of the current employees utilizing vehicles for commuting purposes is attached with the name of the department and position. Approximately five years ago the City Council permitted several employees who had been utilizing commuting vehicles to convert their vehicles to auto allowances. In fact, there is no separate payment of an allowance since the payment of $325 per month was added to an employees base salary. As part of the 1995 -96 Budget, two commuters will be turning in their cars and opting for the allowance. ISSUES If the City Council would choose to eliminate the use of City vehicles for commuting purposes for the remaining eighteen employees, there are several . issues and options. First the issues: 1. Of the remaining eighteen employees, two have provisions in their employment agreements with the City permitting the use of vehicles for commuting purposes. 2. There are four employees utilizing vehicles for commuting purposes who are represented by employee associations, and prior to any change in current practices it would require the City to meet and confer in good faith prior to implementing any changes. 3. Ten of the eighteen employees utilize their City vehicles with regularity to respond to City emergencies or after hours activities requiring their presence. 4. If there are vehicles eliminated for commuting purposes and not replaced with the allowance, then there will be situations with employees in the same department at the same level, some with and some without vehicles or allowances. 5. Several of the employees utilizing City vehicles for commuting purposes are on call and frequently utilize their City vehicle for after hours responses or City events. 0 OPTIONS 1) Eliminate all non- safety employees utilizing City vehicles for commuting • purposes. Estimating the savings is difficult, but has been estimated at $25,000 initially and $90,000 to $100,000 overtime, assuming that fewer total vehicles are required in the City fleet. 2) Eliminate all non - safety employees utilizing City vehicles for commuting purposes and replace them all with allowances consistent with past allowances. As the individuals in these positions retire or leave City service, eliminate the allowance in positions that can utilize pool vehicles during the business day. Again, estimating the savings is difficult, but if allowances are utilized and all or a substantial portion of the current cars are converted to pool vehicles or auctioned out of the fleet, there may be minimal savings initially and $90,000 - $100,000 per year over time. 3) Continue the current practice of eliminating the vehicles as individuals leave City service. There would be no savings initially and $90,000 to $100,000 over time. In three years, 50% of the non - safety commuter vehicles have been eliminated and it is possible that over the course of the next three to five years, a fair number of remaining vehicles could be eliminated as commuters. Each option would require the renegotiation of two City employee employment agreements and an obligation to meet and confer with the affected employee • groups. U n U • is City Manager City Attorney Community Development Community Development Community Development Community Development Community Development Administration Services General Services Public Works Public Works Public Works Public Works Public Works Public Works Public Works Public Works Public Works City Manager City Attorney Assistant City Manager Chief Building Inspector Chief Plan Checker Sr. Code Enforcement officer Advanced Planning Manager Revenue Manager General Services Director Public Works Director /City Engineer Public Works Inspector Public Works Inspector Public Works Inspector Civil Engineer Traffic Engineer Acting Utilities Director Utilities Superintendent Utilities Superintendent C] E AGENDA ITEM NO. 22 • CITY OF NEWPORT BEACH Office of the City Manager September 23, 1996 TO: Honorable Mayor and Members of the City Council FROM: Kevin J. Murphy, City Manager I SUBJECT: COMMUTER VEHICLES BACKGROUND Mayor Hedges has requested that the City's current practice of permitting a limited number of employees to utilize City vehicles for commuting purposes be agendized. The last time this matter was discussed by the City Council was June 26, 1995 when a report was prepared in conjunction with the 1995 -96 Budget. A copy of that report and the minutes from the meeting are attached. At the conclusion of that discussion, the City Council directed staff to prepare a review of the issue and return with a policy on the matter. • From the City Council discussion in 1995, and as far back as 1992, it is apparent the City Council wishes to reduce the number of City vehicles which are permitted to be used for commuting purposes. In recognition of that direction, the number of commuting vehicles has been reduced from 59 in 1992 to 38. The reduction from 59 to 38 has been accomplished through normal attrition and turnover in employees. For example, the City's recently hired Assistant City Manager and Assistant to the City Manager do not utilize a City vehicle, nor do they receive a vehicle allowance. When a City pool car isn't available for their use, they are reimbursed on a mileage basis for the use of their personal vehicle. An explanation and breakdown of the remaining 38 is helpful to gain a greater appreciation of the issue. Twenty -one (21) of the vehicles are utilized by Police and Fire /Marine personnel, including eight (8) motor officers. Eleven (11) of the vehicles are Public Works employees, including the Director and five (5) staff members who are first responders to water, sewer or electrical problems seven days a week/twenty -four hours a day. There are six (6) commuting vehicles utilized by executive or department director level employees, including the City Manager, City Attorney, Police Chief, Fire and Marine Chief, General Services Director and Public Works Director DISCUSSION In 1995, the City Council directed staff to prepare a policy regarding commuting vehicles. To comply with City Council direction, City staff incorporated this work into a study on the City's fleet and fleet maintenance. The study, now in preparation by the Arroyo Group, covers the City's fleet maintenance program and operation, including a • review of the number of commuting vehicles and will be making recommendations in this area. 0 0 n U A first draft of the Arroyo Group's study is due for delivery to the multi- department task force coordinating this study on September 30th, and after review will be presented to the City Council. Understanding that Mayor Hedges requested that this be on the September 23rd agenda, we contacted the Arroyo Group to see if the study would be completed early. Unfortunately, the consultant is in the final stages of preparing his recommendations and will not have them available until the end of the month. ALTERNATIVES The City Council may wish to: 1. Receive the report of the Arroyo Group and review the recommendations on all fleet issues, including commuting vehicles within sixty days; mo 2. Direct staff to continue the practice of reducing the number of commuting vehicles as normal turnover in staff occurs; m 3. Direct the staff to eliminate the practice of permitting any vehicles to be used for commuting vehicles (other than emergency on -call and stand -by personnel) • and direct the City Manager to prepare a list of steps necessary to implement this directive within 30 days. Under Option 1 the staff would return with a comprehensive report on the City's total fleet and ways the operation and maintenance of the fleet can be made more cost efficient and effective for City departments. A minor, but important, component of this study has been commuting vehicles. Staff anticipates a series of recommendations including commuting vehicle policies. Under Option 2 the staff would continue to phase out the number of commuting vehicles. Since last year 3 of 18 non - safety commuting vehicles have been eliminated, bringing the number down to 15. In 1992 the number of non - safety commuting vehicles was 36. Under Option 3 the staff would identify the actions necessary to achieve the phase -out of all vehicles. As identified in 1995, this includes the amendment of current employment agreements with individual employees and employee associations. It may necessitate at some locations (Police facility) the creation of additional parking spaces on -site or off -site. If the City Council selects Option 1, the same actions may be necessary to the same or lesser degree, depending on the recommendations of the study. RECOMMENDATION . The City staff recommends the City Council review the alternatives and provide appropriate direction. I' 0 0 CITY OF NEWPORT BEACH • Office of the City Manager June 26, 1995 TO: Honorable Mayor And Members Of The City Council FROM: Kevin J. Murphy, City Manager SUBJECT: COMMUTER VEHICLES /BUDGET CHECKLIST BACKGROUND Following the City Council meeting on June 19th, Councilmember Norma Glover clarified her request for placement of an item related to employees utilizing City vehicles for on- the -job use and commuting purposes on the City Budget Checklist for straw voting on June 26th. Specifically, Councilmember Glover has requested that the City Council consider the elimination of non - safety employees utilizing vehicles for commuting purposes. Below is a summary of information related to this item and the various issues associated with its implementation. DISCUSSION The City staff has been reviewing the number of City employees utilizing City vehicles for business and commuting purposes for the last three years. During that time period, various proposals to reduce the number of vehicles used for commuting purposes have been reviewed but none implemented nor formally presented to the City Council for action or authorization to meet and confer as necessary with impacted represented or unrepresented employees. As additional information, it has been indicated that prior to the passage of Proposition 13 in 1978 an extensive number of City staff members utilized vehicles for commuting purposes to permit emergency response after normal business hours and as a fringe benefit. Furthermore, after the passage of Proposition 13 the City Council substantially reduced the number of vehicles that were permitted to be used for commuting purposes; however, over the passage of time the number increased to the point that in 1992 there were a total of 59 vehicles identified that were permitted for commuting purposes. Of this number, 23 vehicles (sedans and motorcycles) were utilized by Police and Fire Department personnel. Of the remaining 36, four were utilized in a carpooling program to assist the City in meeting its Rideshare goals as required 40 by the Air Quality Management District. 0 0 Since the original survey in mid -1992, the number of commuting vehicles has • been gradually reduced in the non- safety group from 36 to today's level of 18. This has been accomplished through normal attrition, wherein as new employees have been hired to replace former occupants of commuter vehicles the benefit has not been extended or in the case of six employees they have converted to an auto allowance. Of these six, two will be retiring from the organization in the next three months, and one within the next six months. In replacing these employee positions there will be no vehicle utilized for commuting purposes or allowances offered. A list of the current employees utilizing vehicles for commuting purposes is attached with the name of the department and position. Approximately five years ago the City Council permitted several employees who had been utilizing commuting vehicles to convert their vehicles to auto allowances. In fact, there is no separate payment of an allowance since the payment of $325 per month was added to an employees base salary. As part of the 1995 -96 Budget, two commuters will be turning in their cars and opting for the allowance. ISSUES If the City Council would choose to eliminate the use of City vehicles for commuting purposes for the remaining eighteen employees, there are several issues and options. First the issues: • 1. Of the remaining eighteen employees, two have provisions in their employment agreements with the City permitting the use of vehicles for commuting purposes. 2. There are four employees utilizing vehicles for commuting purposes who are represented by employee associations, and prior to any change in current practices it would require the City to meet and confer in good faith prior to implementing any changes. 3. Ten of the eighteen employees utilize their City vehicles with regularity to respond to City emergencies or after hours activities requiring their presence. 4. If there are vehicles eliminated for commuting purposes and not replaced with the allowance, then there will be situations with employees in the same department at the same level, some with and some without vehicles or allowances. 5. Several of the employees utilizing City vehicles for commuting purposes are on call and frequently utilize their City vehicle for after hours responses or City events. i 0 • OPTIONS 0 1) Eliminate all non - safety employees utilizing City vehicles for commuting purposes. Estimating the savings is difficult, but has been estimated at $25,000 initially and $90,000 to $100,000 overtime, assuming that fewer total vehicles are required in the City fleet. 2) Eliminate all non - safety employees utilizing City vehicles for commuting purposes and replace them all with allowances consistent with past allowances. As the individuals in these positions retire or leave City service, eliminate the allowance in positions that can utilize pool vehicles during the business day. Again, estimating the savings is difficult, but if allowances are utilized and all or a substantial portion of the current cars are converted to pool vehicles or auctioned out of the fleet, there may be minimal savings initially and $90,000 - $100,000 per year over time. 3) Continue the current practice of eliminating the vehicles as individuals leave City service. There would be no savings initially and $90,000 to $100,000 over time. In three years, 50% of the non - safety commuter vehicles have been eliminated and it is possible that over the course of the next three to five years, a fair number of remaining vehicles could be eliminated as commuters. • Each option would require the renegotiation of two City employee employment agreements and an obligation to meet and confer with the affected employee groups. E c.. sT • l/ /9 96 - CURRENT COMMUTING VEHICLES City Manager City Manager City Attorney City Attorney Community Development Chief Building Inspector Community Development Chief Plan Checker Community Development Sr. Code Enforcement officer General Services Public Works Public Works Public Works Public Works Public Works Public Works Public Works Public Works Public Works General Services Director Public Works Director /City Engineer Public Works Inspector Public Works Inspector Public Works Inspector Civil Engineer Traffic Engineer Acting Utilities Director Utilities Superintendent Utilities Superintendent 0 • fir. • • CITY OF NEWPORT 3EACH MINUTES ROLL CALL 3��ox'oz O W Q 3pSU0 W W O J Z June 26, 1995 INDEX Mayor Pro Tern Debay stated she respects Council Badget Member Glover's concern with respect to providing basic service, but noted that the libraries in Costa Mesa, Laguna Beach and Irvine only provide service four days a week. Council Member Cox stated he was not going to support Mayor Hedges' motion because he does not think it is right for the Council to dictate a policy to the Library Board, and felt that Council Member Edwards' motion was more appropriate of this time. Ayes x x The substitute, substitute motion made by Mayor Noes x x x x x Hedges was voted on and FAILED. Ayes x x x x x The substitute motion made by Council Member Noes x x Edwards was voted on and carried. • COMMUTER VEHICLES - $25,000 The City Manager stated this item was placed on the checklist by Council Member Glover, and noted that the City in 1992 had 59 vehicles that were being utilized for commuting purposes to and from work, with the vast majority being used by the Police Department; this number has been reduced over the years, and to -date, there are IS vehicles being utilized by employees for commuting purposes. Also, six additional vehicles have been converted to auto allowances and combined with that employee's salary, two of which will be eliminated within the next few months. He stated he has attempted to reduce the number of commuter vehicles, as well as the automobile allowance, as those positions are vacated. If the Council were to eliminate all non -safety employees utilizing City vehicles for commuting purposes, the estimated reduction is $25.000 initially and $90,000 to $100,000 over time, assuming fewer total vehicles are required in the City fleet. If the Council were to reduce the number of commuter vehicles, he would request that the staff be directed to meet with the appropriate employee groups. Council Member Glover stated that as part of the "long -time culture" at City Hall, some of the non - safety employees have been given City vehicles to commute to and from work. However, there is also a pool of cars available to employees as well as a monthly automobile allowance of $325 given to certain employees who have turned in their City vehicle as an added salary incentive. She stated she felt it is time for the City to make a "cultural Volume 49 - Page 278 l 1 l Y UP iNh VVrtj tc l JhAl i MINUTES ROLL CALL � q¢ W F :K ¢ M � w o U > o? U June 26, 1995 IND X change" and no longer provide employees with Budget City vehicles or vehicle allowance. She also felt that a message needs to be sent to the community that the City is coming into the nineties with some of their practices. Motion x Mayor Hedges moved to eliminate all commuting vehicles, safety and non - safety, and all automobile allowance, except for those employees under specific contract, and that the staff be directed to meet and confer with the appropriate employee groups. Council Member Cox stated he will not support Mayor Hedges' motion because of the methodology being proposed. He stated he agrees with Council Member Glover that a "cultural" change is needed at City Hall, but he does not feel this is the appropriate approach and that it would only cause more problems. Council Member Edwards indicated he felt this issue needed further review inasmuch as it includes safety as well as non - safety commuter vehicles. Motion x Council Member Cox stated he felt it was dangerous to "attack" the budget in this matter, • and therefore, made a substitute motion to leave the $25,000 In the budget as recommended, but that staff be directed to come back with an In- depth review and proposed policy for all safety and non - safety commuter vhelcles. Mayor Pro Tern Deboy stated she thinks the philosophy to change the "culture" at City Hall is good; however, pursuant to previous agreements made with various employees and employee groups regarding City vehicles and vehicle allowance, she will support Council Member Cox's motion. Mayor Hedges stated he will not support the substitute motion because this is an issue that has come up the last three years and is still not resolved. Ayes x x x x x x The substitute motion made by Council Member Noes x Cox was voted on and carried. • TRAVEL AND MEETINGS - $82,680 The City Manager noted that the travel and meetings account in the various departments does not include specilized training (or post - training for the Police Department(. Motion x Motion was made by Council Member Cox to approved the recommended allocation. • Volume 49 - Page 279 R Y. 0 AGENDA ITEM NO. 28 CITY OF NEWPORT BEACH Office of the City Manager October 28, 1996 TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS FROM: Kevin J. Murphy, City Manager �14 SUBJECT: COMMUTING VEHICLES On the September 23rd City Council agenda, the City Council directed that this matter return with the results of the study on the City's fleet and fleet maintenance. This study was distributed on October 22nd in Preliminary Draft form to the City Department Directors who are participating as the Task Force Study Group. The Preliminary Draft has provided less detail and recommendations than anticipated on the issue of commuting vehicles and we have asked the consultant to revisit the issue and provide recommendations that are comprehensive and thoroughly researched anticipating that the City Council is looking for complete staff and consultant effort on this matter. The work on this has commenced by the consultant and we will have the item for the City Council on November 12th for your review and consideration. RECOMMENDATION The City Council continue the discussion on Commuting Vehicles to November 12, 1996. r TO: Mayor and City Council FROM: General Services Director SUBJECT: Fleet Maintenance and Procurement Study Recommendation City Council Agenda Item No. 14 April 22, 1996 Direct staff to complete an agreement for services with Arroyo Associates, Inc. to conduct a Fleet Maintenance and Procurement Study at a cost of $30,000. Approve a budget amendment transferring funds from the Internal Service Fund for equipment maintenance and replacement to an appropriate expenditure account. Background An Internal Service Fund (ISF) was established on July 1, 1993 in an effort to identify actual fleet maintenance and replacement costs and promote more efficient management of fleet assets. The General Services Department was designated the managing department of the $3.5 million fund using existing City staffing levels. • The ISF is managed through the use of an automated data collection system. Monthly maintenance and replacement rates are set by the General Services Department on an annual basis for each City vehicle or item of equipment, with each department paying into a central fund that combines both maintenance and replacement funding. Prior to the formation of the ISF, the staff of the various City departments managed, on an individual basis, the replacement of their own units. Maintenance activities were accounted for by an hourly service fee that was calculated on an annual basis. Capital improvements, depreciation, and overhead costs of the equipment maintenance and replacement programs were not accounted for under the previous system. The advent of the ISF occurred at a time of budget cuts, and although all departments were given credit for the increased costs in their respective budgets, the overall costs were higher than the previous decentralized system, as all direct and indirect costs of operating the system were identified and included in the rates. Naturally, this has not made the program terribly popular among City departments, particularly in combination with other reductions which have taken place and the lengthening of the replacement schedule for equipment. Partly as a result of the requirement for individual departments to pay the full maintenance and replacement costs of operating the fleet, the size of the fleet has decreased from 504 units in FY • 92 -93 to 429 presently. On April 25, 1995, the Police Department completed a report that included a recommendation that the equipment maintenance effort at their facility, which consists of three mechanics and a small repair facility, be transferred to Police Department management. In addition, the report recommended the use of leased vehicles. The Police Department recommendations were reviewed by the General Services Department with a resultant report forwarded to the City Manager on April 28, 1995. As a result of the continued scrutiny of the management of the ISF and as a means to properly assess the Police Department proposal, a fleet maintenance study by an outside consultant was commissioned by the Council on July 10, 1995 at a cost of $15,300. The study, which was to analyze the current management of the ISF and fleet maintenance operations, was conducted by a private consultant, ETS Consulting of Oak Harbor, Washington. The study, which was to be conducted in three phases, commenced on August 4, 1995 with interviews of each of the departments. The consultant became ill near the start of the individual department assessment briefings and left early. In the following month of September, he developed a rough draft of his findings based on his limited interviews, which was reviewed by the City staff and returned to the contractor, with numerous comments. Further delays in the completion of the report consumed the months of October and November. Due to the delays and the continued acute illness of the consultant, the project was terminated by City staff on November 22, 1995. The consultant was paid a total of $5,000 upon receipt of a final draft report. Various consultant recommendations have been evaluated and implemented. On December 13, 1995, staff prepared a report for the Council on the termination of the contract as well as the intent to resume the project. Shortly thereafter, staff began the search for another consultant. In January, 1996 a steering committee, composed of primarily department directors, was formed to prepare a Request for Proposal (RFP) for a subsequent fleet maintenance study. The RFP was sent to eight pre - qualified consultants on February 12, 1996. Three of the consultants, David M. Griffith and Associates LTD., Spectrum Consultants Inc., and Arroyo Associates Inc., responded with bids of $53,000, $43,850, and $30,000 respectively. Each of the consultants was interviewed by the steering committee. The low bidder, Arroyo Associates, Inc., was unanimously selected by committee as the best qualified consultant on April 3, 1996. Discussion ISF rates for vehicle and equipment maintenance and replacement are determined by an analysis of the data collected on a daily basis. During the past year, maintenance costs have decreased in excess of $125K, primarily due to various programs or actions initiated by staff. As a residt, the maintenance rates for FY 96 -97 have been conservatively decreased by 4.5 %. The replacement rates are based upon the estimated replacement cost of each piece of equipment and have steadily increased for the past two years as manufacturers have increased prices by 2% to 20% annually. 0 • n LJ ! ! An in -depth study of equipment maintenance and replacement activities by an outside consultant would accomplish three important tasks: one, it would provide recommendations to ensure the City operation is efficient and cost effective; two, it would form the basis for the credibility of the management of the ISF; and three, it would allow an independent appraisal of the Police Department proposals to decentralize maintenance and replacement management and consider use of leased police vehicles. Study Description The study would be focused on the following areas: a. Evaluate employee utilization and staffing efficiency b. Review equipment maintenance policies c. Analyze the reporting and the use of management information system d. Review fleet utilization and replacement practices e. Analyze the Police Department proposal to decentralize equipment maintenance and replacement and use of leased vehicles f. Evaluate the financial aspects of the ISF The study would be conducted in accordance with the attached work plan provided by Arroyo Associates. The estimated start -up date would be April 22, with completion no later than July 15. A final report would be presented to the Council by the consultant. • The maximum cost of the study is $30,000. The consultant has stipulated that if the study can be completed with fewer man hours than estimated, the cost will be adjusted accordingly. Funds are available in the ISF as a result of the reduced costs of vehicle maintenance during FY 95 -96 that was mentioned earlier in this report. Approval of the attached budget amendment would facilitate the transfer of funds. Summary The study, while described as a Fleet Maintenance and Procurement Study, would also consider the privatization of the Equipment Maintenance Division. Costs of local maintenance functions would be compared with City costs. Best management practices would be compared to City management activities to ensure the City is operating as efficiently as possible. The consultant is confident that his fee will be recovered by the City in lowered operating costs. Finally, it is important that all City departments have confidence in the ISF and its management. Only an outside, independent study would be capable of doing this. Very respectfully, David E. Niederhaus DEN /mhl • Attachments \ \ B \ / \ u $ § % � \ \ 0rL, \ 2 / / u / \ lel §� ) 4 � !/ ! . 7m� \ {, /! f ! � )� i � � ! \i | la I I � | I I � � f � I I _. � z � _ ¥ /l \ � � I � I I . I I I l! ;I § � co � § } } � � a q I I � | I I � � f � I I _. � z � _ ¥ /l \ � � I � I I . I I I l! ;I § � co � § } } � � Cit4UDGET of Newport Beach NO. BA- 042 AMENDMENT 1995 -96 AMOUNT: 530,000.00 EFFECT ON BUDGETARY FUND BALANCE: X Increase Revenue Estimates Increase in Budgetary Fund Balance Increase Budget Appropriations AND Decrease in Budgetary Fund Balanc It�1 Transfer Budget Appropriations X No effect on Budgetary Fund Balanc SOURCE: from existing budget appropriations from additional estimated revenues X s from unappropriated fund balance FYPI AMATIMI- }} YY- S p This budget amendment is requested to provide for the following: To appropriate $30,000 to complete the study of Fleet Maintenance and Procurement with Arroyo Associates, Inc. The funds will come from the sale of vehicles. ACCOUNTING ENTRY: Amount BUDGETARY FUND BALANCE Debit Credit Fund Account Description General Fun 010 3605 Fund Balance Control �EVENUE APPROPRIATIONS (3601) Fund/Qiv Account Description 610 6830 Sale of Vehicles $30,000.00 EXPENDITURE APPROPRIATIONS (3603) Description Divisio Number 6110 Equipment Maintenance - Maintenance Accoun Number 8080 Services - Professional and Technical $30,000.00 Divisio Number Accoun Number Divisio Number Accoun Number Divisio Number Accoun Number Project Number Automatic System Entry. Signed: Financial Ap roval: Fina ce Director Date Signed: , Admi is rative Ap rov : City Manager Date Signed: City Council Approval: City Clerk Date • CITY OF NEWPORT BEACH• REQUESTS FOR FUNDS Date April 15, 1996 TO: Administrative Services Director FROM: General Services Director SUBJECT: REQUEST FOR FUNDS Request for additional funds, $ Funds are not available in the current budget. Additional appropriation to Account No. is requested. Additional funds are needed for: r� U Request for transfer of funds, 30,000. • Transfer from Account No. 610 -6830 to No. 6110 -8080. Funds are available in the current budget. Transfer of funds is needed for: Department Head Approved: City Manager Administrative Services Director • E THIS AGREEMENT, entered into this 44 day of 19q�, by and between CITY OF NEWPORT BEACH , a Municipal Corporation (hereinafter referred to as "City "), and Arroyo Associates, Inc. whose address is 234 North E1 Molino Avenue, Suite 20, Pasadena, CA (hereinafter referred to as "Consultant "), is made with reference to the following: A. City is a Municipal Corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of the City. B. The principal member of Consultant is Mr. Nicolas Conway, Project Manager. C. City desires to engage Consultant to conduct a Fleet Maintenance and Procurement Study upon the terms and conditions contained in this Agreement. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: -1- 1. TERM The Term of this Agreement shall commence on the 4,Vk day of 'j., L , 1914, and shall terminate on the 411\ day of �, 19`6, unless terminated earlier as set forth herein. 2. SERVICES TO BE PERFORMED Consultant shall perform the tasks set forth in Exhibit "A ", attached hereto and incorporated herein by this reference. 3. COMPENSATION TO CONSULTANT Consultant shall be compensated for services performed pursuant to this Agreement in the amount and manner set forth in Exhibit "A ", attached hereto and incorporated herein by this reference. 4. STANDARD OF CARE All of the work shall be performed by Consultant or under Consultant's supervision. Consultant represents that it possesses the professional and technical personnel required to perform the services required by this Agreement and that it will perform all services in a manner commensurate with the community professional standards. All services shall be performed by qualified and experienced personnel who are not employed by City nor have any -2- contractual relationship with City. Consultant represents and warrants to City that it has or shall obtain all licenses, permits, qualifications and approvals required of its profession. Consultant further represents and warrants that it shall keep in effect all such licenses, permits and other approvals during the term of this Agreement. 5. INDEPENDENT PARTIES City retains Consultant on an independent contractor basis and Consultant is not an employee of the City. The manner and means of conducting the work are under the control of Consultant, except to the extent they are limited by statute, rule or regulation and the express terms of this Agreement. No civil service status or other right of employment with City will be acquired by virtue of Consultant's services. None of the benefits provided by City to its employees, including, but not limited to, unemployment insurance, worker's compensation plans, vacation and sick leave, are available from City to Consultant, its employees or agent. Deductions shall not be made for any state or federal taxes, FICA payments, PERS payments or other purposes normally associated with an employer - employee relationship from any fees -3- 0 0 due Consultant. Payments of the above items, if required, are the responsibility of Consultant. 6. COOPERATION Consultant agrees to work closely and cooperate fully with City's designated Project Administrator, and any other agencies which may have jurisdiction or interest in the work to be performed. City agrees to cooperate with the Consultant on the project. 7. PROJECT MANAGER The Consultant shall assign the project to a Project Manager, who shall coordinate all phases of the project. This Project Manager shall be available to the City at all times. The Consultant has designated Mr. Nick Conway to be its Project Manager. 8. TIME OF PERFORMANCE The task to be performed by Consultant under and pursuant to this Agreement shall be completed within 90 days that the project estimate is accepted. In accordance with exhibit "II -1" of exhibit "A" Consultant shall receive no additional compensation if completion of its obligation under this Agreement requires a time greater than as set forth herein, unless such extension is caused solely by the conduct of the City. Each party hereby agrees to provide timely notice to the other of any violation occurring under this Section and the cause thereof. 9. CITY POLICY Consultant will discuss and review all matters relating to policy and project direction with the Project Administrator in advance of all critical decision points in order to ensure that the project proceeds in a manner consistent with City goals and policies. 10. CONFORMANCE TO APPLICABLE REQUIREMENT All work prepared by Consultant shall conform to applicable city, county, state and federal requirements and be subject to approval of the Project Administrator and City Council. 11. PROGRESS Consultant is responsible to keep the Project Administrator and /or his /her duly authorized designee informed on a regular basis regarding the status and progress of the work, activities performed and planned, and any meetings that have been scheduled or are desired. 12. HOLD HARMLESS Consultant agrees to indemnify, defend, save and hold -5- 0 harmless City, its City Council, boards and commissions, officers and employees from and against any and all loss, damages, liability, claims, suites, costs and expenses for damages of any nature whatsoever, including, but not limited to, bodily injury, death, personal injury, property damages, attorneys fees and court costs arising from any and all negligent actions of Consultant, its employees, agents or subcontracts in the performance of services or work conducted or performed by consultant pursuant to this Agreement. Consultant shall indemnify and hold harmless City, its City Council, boards and commissions, officers and employees from and against any and all loss, damages, liability, claims, suits, costs and expenses whatsoever, including reasonable attorneys' fees, accruing or resulting to any and all persons, firms or corporations furnishing or supplying work, services, materials, equipment or supplies arising from or in any manner connected to the Consultant's negligent performance of services or work conducted or performed pursuant to this Agreement. 13. INSURANCE Without limiting consultant's indemnification of City, Consultant shall obtain and provide and maintain at its own Pi E expense during the term of this Agreement policy or policies of liability insurance of the type and amounts described below and satisfactory to the City. Such policies shall be signed by a person authorized by that insurer to bind coverage on its behalf and must be filed with the City prior to exercising any right or performing any work pursuant to this Agreement. All insurance policies shall add as insured the City, it selected officials, officers and employees for all liability arising from Consultant's services as described herein. Prior to the commencement of any services hereunder, Consultant shall provide to city certificates of insurance from an insurance company certified to do business in the State of California, with original endorsements, and copies of policies, if requested by City, of the following insurance, with Best's Class B or better carriers: A. Worker's compensation insurance covering all employees and principals of the Consultant, per the laws of the State of California; B. Commercial general liability insurance covering third party liability risks, including without limitation, contractual liability, in a minimum amount of $1 million -7- y • combined single limit per occurrence for bodily injury, personal injury and property damage. If commercial general liability insurance or other form with a general aggregate is used, either the general aggregate shall apply separately to this project, or the general aggregate limit shall be twice the occurrence limit; C. Commercial auto liability and property insurance covering any owned and rented vehicles of Consultant in a minimum amount of $1 million combined single limit per accident for bodily injury and property damage. Said policy or policies shall be endorsed to state that coverage shall not be suspended, voided or canceled by either party, or reduced in coverage or in limits except after thirty (30) days' prior notice has been given in writing to City. Consultant shall give to City prompt and timely notice of claim made or suit instituted arising out of Consultant's operation hereunder. Consultant shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work. Consultant agrees that in the event of loss due to any of the perils for which it has agreed to provide comprehensive general and automotive liability insurance, that Consultant shall look solely to its insurance for recovery. Consultant hereby grants to City, on behalf of any insurer providing comprehensive general and automotive liability insurance to either Consultant or City with respect to the services of Consultant herein, a waiver of any right of subrogation which any such insurer of said Consultant may acquire against City by virtue of the payment of any loss under such insurance. 14. PROHIBITION AGAINST TRANSFERS Consultant shall not assign, sublease, hypothecate or transfer this Agreement or any interest in this Agreement, directly or indirectly, by operation of law or otherwise without prior written consent of City. Any attempt to do so without consent of City shall be null and void, and any assignee, sublessee, hypothecate or transferee shall acquire no right or interest by reason of an attempted assignment, hypothecation or transfer. The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Consultant, or of the interest of any general partner or joint venturer or syndicate member or co- tenant if Consultant is a partnership or joint venture or syndicate or co- tenancy, which shall result in changing the control of Consultant, shall be construed as an assignment of this Agreement. Control means fifty percent (50 %) or more of the voting power, or twenty -five percent (251) or more of the assets of the corporation, partnership or joint venture. 15. REPORTS Each and every report, draft, work product, map, record and other document reproduces, prepared or caused to be prepared by Consultant pursuant to or in connection with this Agreement shall be the exclusive property of City. No report, information or other data given to or prepared or assembled by Consultant pursuant to this Agreement shall be made available to any individual or organization by Consultant without prior approval by City. Consultant shall, at such time and in such forms as City may require, furnish reports concerning the status of services required under this Agreement. 16. CONFIDENTIALITY The information which results from the services in this -10- Agreement is to be kept confidential unless the release of information is authorized by the City. 17. CITY'S RESPONSIBILITIES City shall furnish to Consultant base, maps, existing studies, ordinances, data and other existing information as shall be requested by Consultant and materials in City's possession necessary for Consultant to complete the work contemplated by this Agreement. City further agrees to provide all such materials in a timely manner so as not to cause delays in Consultant's work schedule. 18. ADMINISTRATION This Agreement will be administered by the General Services Department. The General Services Director or his /her designees shall be considered the Project Administrator and shall have the authority act for the City under this Agreement. The Project Administrator or his /her authorized representative shall represent the City in all matters pertaining to the services to be rendered pursuant to this Agreement. 19. EXTRA WORK Consultant shall receive compensation for extra work authorized by City in accordance with the schedule of billing -11- 0 0 rates set forth in Exhibit "A." All extra work must be authorized in writing by the Project Administrator and Consultant shall not be entitled to extra compensation without authorization. 20. RECORDS Consultant shall keep records and invoices in connection with its work to be performed under this Agreement. Consultant shall maintain complete and accurate records with respect to the costs incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City during normal business hours to examine, audit and make transcripts or copies of such records. Consultant shall allow inspection of all work, data, documents, proceedings and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. 21. REIMBURSEMENT FOR EXPENSES Consultant shall not be reimbursed for any expenses unless authorized in writing by City. 22. MONTHLY INVOICES Consultant shall submit invoices to the City on a monthly basis in accordance with Consultant's schedule of fees contained in Exhibit "A" hereof. Each invoice will be itemized. Each -12- invoice shall show the number of hours worked per person /consultant and the nature of the work performed. 23. PAYMENT OF COMPENSATION City shall make payments to Consultant upon receipt and approval of a monthly invoice. Final payment will be paid after final report is presented and accepted by City. 24. NONDISCRIMINATION BY CONSULTANT Consultant represents and agrees that Consultant, its affiliates, subsidiaries or holding companies do not and will not discriminate against any subcontractor, consultant, employee or applicable for employment because of race, religion, color, sex, handicap or national origin. Such nondiscrimination shall include, but not be limited to, the following: employment, upgrading, demotion, transfers, recruitment, recruitment advertising, layoff, termination, rates of pay or other forms of compensation and selection for training, including apprenticeship. 25. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS City reserves the right to employ other consultants in connection with this project. -13- 26. CONFLICTS OF INTEREST A. The Consultant or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act "), which (1) requires such persons to disclose financial interest that may foreseeable be materially affected by the work performed under this Agreement, and (2) prohibits such persons from making, or participating in making, decisions that will foreseeable financially affect such interest. B. If subject to the Act, Consultant shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for termination of this Agreement by the City. The Consultant shall indemnify and hold harmless the City for any claims for damages resulting from the Consultant's violation of this Section. 27. SUBCONTRACTING A. Consultant shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior approval of City. B. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this -14- Agreement. 28. NOTICES All notices, demands, requests or approvals to be given under this Agreement shall be given in writing and conclusively shall be deemed served when delivered personally or on the second business day after the deposit thereof in the United States mail, postage prepaid, registered or certified, addressed as hereinafter provided. All notices, demands, requests or approvals from Consultant to City shall be addressed to City at: City of Newport Beach 3300 Newport Boulevard P. 0. Box 1768 Newport Beach, CA 92659 -1768 Attention: Mr. David E. Niederhaus All notices, demands, requests or approvals from City to Consultant shall be addressed to Consultant at: Arroyo Associates, Inc. 234 North E1 Molino Avenue, Suite 202 Pasadena, CA 91101 -1675 Attention: Mr. Nick Conway, Project Manager -15- w 29. TERMINATION In the event Consultant hereto fails or refuses to perform any of the provisions hereof at the time and in the manner required hereunder, Consultant shall be deemed in default in the performance of this Agreement. If such default is not cured within a period of two (2) days, or if more than two (2) days are reasonably required to cure the default and Consultant fails to give adequate assurance of due performance within two (2) days after receipt by Consultant from City of written notice of default, specifying the nature of such default and the steps necessary to cure such default, City may terminate the Agreement forthwith by giving to the Consultant written notice thereof. City shall have the option, at its sole discretion and without cause, of terminating this Agreement without cause by giving seven (7) days' prior written notice to Consultant as provided herein. Upon termination of this Agreement, each party shall pay to the other party that portion of compensation specified in this Agreement that is earned and unpaid prior to the effective date of termination. 30. COST OF LITIGATION swig If any legal action is necessary to enforce any provision hereof or for damages by reason for an alleged breach of any provisions of this Agreement, the prevailing party shall be entitled to receive from the losing party all costs and expenses in such amount as the court may adjudge to be reasonable attorneys' fees. 31. COMPLIANCES Consultant shall comply with all laws, state or federal and all ordinances, rules and regulations enacted or issued by City. 32. WAIVER A waiver by City of any breach of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein whether of the same or a different character. 33. INTEGRATED CONTRACT This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties hereto and all preliminary negotiations and agreements of whatsoever kind or -17- nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions hereon. Any modification of this Agreement will be effective only by written execution signed by both City and Consultant. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the day and year first written above. ATTEST: db" M. CITY CLERK APPROVED AS TO FORM: CITY ATTORNEY wb /agr /a,royo.doc CITY OF NEWPORT BEACH A Municipal Corporation By: CONSULTANT By. O��O'