Report

1.0 PURPOSE

To present a report on the follow-up review of Fleet Services.

To: Council in Committee of the Whole

From: Ron Foster

Auditor General

2.0 RECOMMENDATION

It is recommended to City Council:

Item:

AG-11-10 File:

C-I 000

That the findings and recommendations contained within Report AG-11-10 dated November 1, 201 1 be endorsed by Council and forwarded to the Interim Commissioner of Community Services for a report back to the Community Services Committee.

Date of Report:

November I, 201 1 Date of Meeting:

November 7,201 1

Subject: Follow-Up Review of Fleet Services

3.0 EXECUTIVE SUMMARY

PUBLIC REPORT

While the Fleet Services Section is providing services with due regard for value-for-money, opportunities for improvement remain. It is recommended that management review the fuel dispensing system to ensure it is properly integrated with the maintenance management system. It is also recommended that management continue to:

work with user departments to eliminate surplus vehicles and equipment that are no longer required as a result of revised program delivery methods;

emphasize the importance of providing good customer service to fleet staff; and

work with staff from the IT Services Branch to develop a maintenance notification system for fleet users.

Report to Council in Item: AG-11-10 Committee of the Whole (Continued) - 2 - Meeting Date: November 7,2011

4.0 INPUT FROM OTHER SOURCES

4.1 Input from Management

During this review, information was obtained from the following individuals:

City Manager Interim Commissioner, Community Services Director, Works and Transportation Services Manager, Fleet Services

5.0 ANALYSIS

5.1 Objectives

9 The objectives for this review were to identify:

progress made to-date against recommendations from the program review conducted in 2008; and opportunities for further improvements to demonstrate accountability for value-for- money to Council and the community.

5.2 Scope

> This review examined all aspects of the Fleet Services program.

5.3 Procedures

9 This review included interviews with management and staff, review and analyses of reports, observation of operational procedures and a customer satisfaction survey.

5.4 Background

> The Fleet Services program objective is to ensure that the City has safe, appropriate, well-maintained vehicles, equipment and tools for all its operations. The Fleet Services Section provides maintenance and repairs to 144 vehicles, 105 pieces of equipment and 74 tools with an estimated replacement cost of $22 million. Attachment 1 to this report provides a detailed break-down of the fleet assets managed by Fleet Services. A replacement parts inventory of approximately $330K is also maintained for vehicle and equipment repairs.

Report to Council in Item: AG-11-10 Committee of the Whole (Continued) - 3 - Meeting Date: November 7,2011

9 Fleet Services also administers the life cycle of the fleet and assists user groups with asset replacement decisions by recommending replacement or deferral at the end of their life cycle and writing the specifications for the Purchasing Services branch for individual tenders. It also monitors the utilization and operating costs of individual fleet assets, establishes usage policies and rental rates.

9 The Fleet Services Section includes 8 mechanics, 2 Garage Serviceman, 1 Automotive Partsman, 1 Autobody Repairman, 1 Tool Crib Attendant and 1 Supervisor that report to the Fleet Services Manager, who reports to the Director of Works and Transportation Services Branch within the Community Services Department. Total annual expenditures have averaged $2.4 million over the last five years. Attachment 2 provides a five-year expenditure summary.

5.5 Accomplishments

In recent years, Fleet Services has adopted a number of good practices, including:

Operational

9 reduced size of fleet by $1.5 million in consultation with user departments; 9 maintained a preventative maintenance program to extend the useful life of assets; 9 maintained a training program to keep mechanics current; P implemented processes to better manage the fleet replacement process; and 9 conducts annual audits of parts inventory.

Environmental Stewardship

9 utilizes bio-diesel in all diesel powered vehicles and equipment; 9 utilizes ethanol blends of gasoline for our gasoline powered vehicles; 9 introduced hybrid vehicles and alternative fuel powered vehicles; and 9 introduced cleaner burning, quieter diesel powered vehicles and off-road equipment.

Health and Safety

9 designed and procured loading platform for side loading waste trucks; 9 utilizes non-toxic, non-flammable washing stations for cleaning parts; and 9 increased the acquisition and use of "non-controlled" products via WHMIS.

Technology

9 introduced a GPS and automated vehicle locating tracking for some fleet assets.

Report to Council in Item: AG-11-10 Committee of the Whole (Continued) - 4 - Meeting Date: November 7,2011

5.6 Areas for Improvement

P During the 2008 program review, a funding shortfall was identified within the equipment replacement reserve. As a result of fleet rationalization efforts undertaken by management, incremental budget contributions to this reserve are no longer necessary.

P A significant backlog of purchases existed in 2008. Except for items under review and those with remaining useful service capacity, this backlog has been cleared.

P The needs assessment process for replacements and additions to fleet was not sufficiently robust in 2007. Since then, the replacement policy has been updated, annual surveys of requirements are undertaken, needs assessments and business cases are prepared and replacements are prioritized to preserve capital.

9 To further preserve capital, users are also encouraged to share assets and to defer replacements when equipment still meets operational requirements. For example, management recently determined that the useful lives of two classes of passenger vehicles as well as the graders could be extended. To preserve capital, management continues to retrofit existing equipment and employs a preventative maintenance program to extend the useful life of fleet assets. As a result of these initiatives to preserve capital, fleet replacements in 2012 can be limited to $0.8 million rather than $1.6 million which would be required to replace assets that will reach the end of their original lifecycles in 2012.

9 Since 2008, management has significantly reduced the amount of equipment owned and leased by the City. The reductions to City-owned equipment have amounted to $1.49 million and include a grader, sweeper, fork lift, two ice re-surfing units and four plow trucks. While good progress has been made to-date, further opportunities remain to rationalize the amount the fleet inventory used to delivery certain programs such as winter maintenance. It is recommended that management continue to work with user departments to eliminate surplus vehicles and equipment that are no longer required as a result of revised program delivery methods.

D The 2010 inventory count at Fleet Services led to a $62K reduction of the book value to reflect the physical inventory count. Almost two-thirds or $40K of this reduction was related to negative variances in several fuel accounts. Examination of these variances revealed a lack of integration between the fuel dispensing system and the maintenance management system (MMS). It is recommended that management continue to review the fuel dispensing system to ensure it is properly integrated with the maintenance management system.

Report to Council in Item: AG-11-10 Committee of the Whole (Continued) - 5 - Meeting Date: November 7,2011

i 9 The customer satisfaction survey results that are summarized at Attachment 3

revealed minor levels of dissatisfaction with some of the services provided by Fleet Services. The most significant level of dissatisfaction related to the timeliness of fleet replacements. Given that management has implemented rigorous procedures to screen replacement requests to ensure their appropriateness, some dissatisfaction is inevitable. To address customer feedback, it is recommended that management continue to emphasize the importance of providing good customer service to Fleet staff. It is also recommended that management continue to work with staff from the IT Services Branch to develop a maintenance notification system for fleet users.

9 The 2008 program review identified a number of deficiencies with the aging depot at Ritson Road where Fleet Services staff work. Management recently reported to Council on plans to replace this depot.

9 Management agrees with the findings and recommendations that were identified during this review.

6.0 FINANCIAL IMPLICATIONS

9 Implementing the recommendations within this report will improve the efficiency and effectiveness of programs delivered by the Fleet Services Section.

7.0 RESPONSE TO THE COMMUNITY STRATEGIC PLAN

9 Completion of audits and reviews assists Council in holding itself and its administrators accountable for the aualitv of stewardship over public funds and for the achievement of value for money in city operations. ~ a k i n ~ action and ensuring accountability is one of the objectives contained within the Community Strategic Plan.

Auditor General

Attachments

Class 00

Fleet Services Inventory

Average Description

Compact & Midsize Cars Compact SUVlCrossover 112-ton pickups 3000 kg 314-1 ton pick-2500-4500 kg Compact Vans - 112 Ton 112-1 ton vans 1500 -4500 kg Compact Pick-up Truck 1 Ton D u m ~ Trucks - 4500 Dump rucks - 12000-1 3500 Dump Trucks - 13500-1 6000 Dump Trucks - 1600--22000 Special Purpose Light Trucks Dump and Hydraulic Crane Small Salt Spreader Catch Basin Cleaner Garbage Packers Street Flusher Snow Blowers-Large Lawn Seeder Aerial Lifts Wood Chipper Soil Shredder Turf Sweeper Street Sweepers Sidewalk Plow Rollers 1-3 Ton Sidewalk Sweepers Grader - Over 130 HP Utility Work Machines Backhoe 314 Yd. Backhoe 318Yd. Tractors & Attach Tractors with Gang Mower Front End Loaders Skid Steer Loader Wheeled Tractor 13-20 HP Ice Resurfacer Wheeled Utility Vehicle Stump Cutter Litter Hog Water Pump 1" to 3" Steam Generators

No. 13 15 3

23 8 8

14 12

805 Item: AG-11-10

Attachment 1

Life No. Due for Cycle Replacement

7 1 7 0 7 0 7 3 8 3 8 2 7 0 9 6

12 1 12 0 12 0 9 2 9 1 6 0

10 0 8 2

10 0 20 0 15 1 15 0 10 1 22 0 10 1 8 2

10 0 20 0 9 0

24 0 10 0 15 0 15 0 14 0 10 0 15 0 10 1 8 1

10 2 8 3

25 0 4 1

15 2 20 0

Fleet Services Inventory

Item: AG-41-10 Attachment 1

Class Description 66 Warning Devices 67 Portable Air compressor 72 Portable Line Markers 74 Tandem Dump Trailer 75 Line Remover 76 Portable Electrical Generator 77 Trailer-Single Axle 79 Asphalt Trailer 80 Asphalt Recycler 81 Chemical Sprayer 250 Gal 83 Sewer Cleaners 85 Rotary Mowers 88 Power Scythe 89 Portable Welder 90 Equipment Power Washers 91 Concrete Saws - Small 92 Concrete Saws - Large 93 Breakers-Tampers Air Oper 94 Chainsaws 95 Tampers-Gas Powered 96 Tar Kettle 97 Tractor Attachments

Average Life No. Due for No. 6 Age Cycle Replacement

2 18,200 5.50 15 0 4 80,000 12.00 15 1 2 10,600 3.00 8 0 1 9,000 5.00 15 0 3 21,900 4.67 5 1 2 5,800 5.50 15 0

17 118,600 16.12 20 8 1 8,500 20.00 20 0 1 44,000 5.00 10 0 8 63,200 12.88 20 2 1 96,500 10.00 15 0 8 110,800 5.13 8 3 5 4,250 0.40 4 0 2 25,200 14.50 20 0 2 21,300 3.00 10 0 3 5,370 2.00 4 0 1 12,400 9.00 15 0 6 10,200 2.00 20 0 4 3,300 1.75 5 0 9 32,700 7.44 12 2 1 9,300 32.00 20 1 1 7,700 23.00 20 1

323 22,076,271 55

AG-I 1-10 Attachment 2

Expenditure Summary

8 0 8 1 Item: AG-I 1-10

Attachment 3 Fleet Services - Customer Survey

(Summary of 20 Responses)

- timely notification of maintenance due date and service appointment

- time required to complete maintenance

- adequacy of work

very Dissatisfied

Unscheduled Maintenance and Repair to Vehicles, Equipment and Tools

- timeliness of service appointment

- time required to complete repair

- adequacy of work

Dissatisfied

5

5

5

CO1lision'Accident Repair to and Equipment

I - adequacy of work \ 4 0 1 2 0 4 0 O I O 1

Satisfied

Not Applicable

10

10

10

- time required to complete repair

I I I I I

Not VeV very Washing and Equipment I Applicable I Satisfied / Satisfied 1 Dissatisfied / Dissatisfied

very Satisfied

Scheduled Maintenance of Vehicles, Equipment and Tools - Major and Minor Inspections

30

35

40

Not Applicable

Not Applicable

very Satisfied

20

30

25

40

55

45

55

Very Satisfied

- time required to complete washing

- adequacy of work

- safety, cleanliness and working condition / 2 5 1 2 5 1 4 5 1 5 1 0 1

Satisfied

65

50

60

15

Condition of Tools

10

15

0

Satisfied

50

50

0

0

0

Dissatisfied

5

10

5

Not Applicable

Rep'acemenf Of Equipment and Tools

-timeliness of replacement

, very

Dissatisfied

0

0

0

Dissatisfied

0 45

20

15

Customer Service

very Dissatisfied

0

very Satisfied

Not Applicable

10

- responsiveness to requests

25

25

Not Applicable

Satisfied

very Satisfied

20

5

5

10

very Satisfied

0

0

Dissatisfied

Satisfied

50

30

Very Dissatisfied

Satisfied

Dissatisfied

20

65

very Dissatisfied

0

Dissatisfied Very

Dissatisfied

0 0