Smart Management Practices in the Field

Derek S. LeffertMissouri One Call System

Mike GowenArkansas One Call

OVERVIEWCost Overview/Situational Awareness Service/Installation Contractors

- Problematic Ticket Submissions Contract Locators

- Issues With Ticket Management Your Response & Responsibilities

- Recommendations/Suggestions- Available Tools

HISTORICAL STATISTICS

TYPE 2009 2010 2011 (YTD)

Routine 2,371,580 2,411,440 1,170,134

Renewal 382,165 425,722 189,735

Emergency 204,075 235,855 111,950

Non-Compliance

102,988 100,189 10,523

No Response

46,265 46,973 17,692

Dig Up 32,639 33,505 12,659

Design 19,646 15,439 7,168

TOTALS 3,159,358 3,269,123 1,519,861

AGGREGATE COST IMPACT

Average Cost Per Locate (Missouri) = $22.75 (Inclusive of Labor, Overhead, Ticket Cost, etc.)

TYPE 2009 2010 2011 (YTD)

Routine $53,953,445 $54,860,260 $26,620,548

Renewal $8,694,253 $9,685,175 $4,316,471

Emergency $4,642,706 $5,365,701 $2,546,862

Non-Compliance

$2,342,977 $2,279,299 $239,398

No Response $1,052,528 $1,068,635 $402,493

Dig Up $742,537 $762,238 $287,992

Design $446,946 $351,237 $163,072

TOTALS $71,875,392 $74,372,545 $34,576,836

COSTS VS. REVENUE Budgets have decreased precipitously in

the past 5 years Cost-containment measures are

increasingly important Unnecessary outlays undermine already

small margins and decrease shareholder equity

With a commitment of time, cost-savings relative to the One Call process is attainable

SERVICE & INSTALLATION

CONTRACTORS: A Review of Problematic

Issues

INSTALLATION/SERVICE DROP CONTRACTORS

PROBLEM #1 – RENEWAL TICKETS Renewals are NOT required every 10 days, ONLY

when markings are no longer usable Approximately 55% - 60% of Renewals are

illegitimate Approximately $5.3 Million annually is spent on

illegitimate renewal tickets MTIA Member Example: Contractors for 1 Member

totaled 9,954 Renewals in 2010

9,954 X 55% = 5,474 Illegitimate X $22.75 (ACPL) = $124,550 in UNNECESSARY Costs from 1 Company’s

Contractors

INSTALLATION/SERVICE DROP CONTRACTORS

PROBLEM #1 – RENEWAL TICKETS (Continued)

Ticket #102570166 – 6 Tickets on the Project Renewed 62 times in a 1 year period

62 X $22.75 (ACPL) = $1,410.50 8 Utilities Per Ticket X $1,410.50 = $11,284 $11,284 X 6 Tickets Per Submission =

$67,704 on 1 Project that was 1 ½ miles long

INSTALLATION/SERVICE DROP CONTRACTORS

PROBLEM #2 – NON-COMPLIANCE TICKETS Non-Compliance requests are in violation of

Missouri law Failure to provide adequate notice forces

utilities to shift resources and increases costs significantly

More than 100,000 Non-Compliance Requests were made in 2010

MTIA Member Example: 1 MTIA Member’s Contractors accounted for 898 illegal tickets in 2010

INSTALLATION/SERVICE DROP CONTRACTORS

PROBLEM #3 – FALSE EMERGENCY REQUESTSSubmitting emergency requests under false

pretenses is a direct violation of Missouri lawEmergencies require a 2 hour response by

utilitiesFalse emergencies unnecessarily cause a shift

of resources and drive up total costsApproximately 40% of emergency requests are

not true emergencies as defined by law MTIA Member Example: 1 MTIA Member’s

Contractors submitted 3,395 Emergency requests in 2010 (approximately 1,358 were likely inconsistent with Missouri law)

INSTALLATION/SERVICE DROP CONTRACTORS

PROBLEM #4 – FALSE NO-RESPONSE REQUESTS

Approximately 72% of the No-Response Requests received by MOCS are false

False no-response requests create two issues: #1 – Utilities pay for the second request#2 – Utilities are forced to make a second trip to the site to verify markings thereby increasing costs unnecessarily

Potential impact to ALL Missouri utilities in 2010 = $769,417

INSTALLATION/SERVICE DROP CONTRACTORS

PROBLEM #5 – DIG UP TICKETSFailure to report the damage or disturbance

of a underground utility line is a violation of state AND federal law

Significant problems can result from an unreported damage

Particularly problematic with explosive increase in directional drilling

INSTALLATION/SERVICE DROP CONTRACTORS

PROBLEM #6 – DEPTH OF LINE INSTALLATIONS

Shallow depth of buried utilities is the #1 complaint from professional excavators and utility excavators alike

Shallow installation poses greater risk to system reliability and consumer satisfaction and invites increased scrutiny from regulators

MODOT has vocally expressed significant interest in addressing shallow installations through legislative and permitting/inspection initiatives and/or costly utility relocations

CONTRACT LOCATORS:

Identified Issues and The Relative Costs

LOCATE CONTRACTORS

PROBLEM #1 – LACK OF UTILITY RESPONSE In 2010, utilities failed to respond to requests

approximately 28,000 times Failure to respond is a violation of Missouri law

and is being closely examined by regulators Failing to mark facilities can lead to catastrophic

service interruptions and consequently – legal liability

Failure to respond is costly for excavators who have machines on site

Failure to meet statutory obligation negatively impacts the system as a whole and the utility’s public perception

LOCATE CONTRACTORS

PROBLEM #2 – DIG UPS/DAMAGES Recent responses to Dig Up tickets submitted is

fraudulent in nature and must be prohibited Unaltered, documented responses with

photographs are critical to supporting damage claims

Adequate damage investigations by the Utility are essential

Timely, accurate invoicing for claims increases likelihood of payment and enhances relationships with contractors

LOCATE CONTRACTORS

PROBLEM #3 – RENEWALSMost locating contractors are paid per ticketRenewals require far less time and laborRecent concerns have been expressed regarding

locate contractors who “encourage” renewals unnecessarily

Unnecessary renewals account for approximately $5.3 million annually

There are some documented circumstances where renewals are ignored but still billed to the utility

LOCATE CONTRACTORS

PROBLEM #4 – INCONSISTENCY IN BILLING Recent inquiries by utilities have revealed

disparities in invoices between what MOCS sent and what was ultimately billed by contractors

Daily, monthly, and yearly reports are available to verify the number of tickets transmitted to locate contractors

Close scrutiny is essential to controlling costs and monitoring performance

YOUR ROLE

& RESPONSIBILITIES

YOUR ROLE IN THE SYSTEM

Control Costs Ensure Contract Deliverables Are Met Ensure Compliance with Statutes Develop Performance Standards Audit/QA Contractors Require Employee & Contractor

Awareness & Education Provide Feedback & Participate in the

One Call System

COST CONTROLSMinimize unnecessary tickets submitted by

contractors & employees ($22.75+ per ticket)Ensure that proper planning/design/engineering

gives contractors adequate preparation time Reduce liabilities by requiring compliance with

statutes Minimize at-fault damages and subsequent

liability through proper excavation techniques Ensure timely cost-recovery on damages with

thorough damage investigations

CONTRACT DELIVERABLES

Establish practical, reasonable, and safe measures in contracts to enhance quality, reliability, and consumer satisfaction

Consistently review and enforce defined criteria

Conduct periodic discussions with contractors regarding deliverable attainment

Enforce penalties for unmet provisions

PERFORMANCE STANDARDS AND AUDITING

CONTRACTORSStatutory ComplianceEmployee Education (Online Modules, MOCS

Training) Periodic Review of Submitted TicketsInspections on Permitted Projects

(Particularly on MODOT R-O-W)Pre & Post Excavation Photos &

DocumentationDamage Ratio (Damages vs. Amount

Installed)

PERFORMANCE STANDARDS AND AUDITING (Continued)

LOCATORS On Time Locates Accuracy of locates (Damages Due to

Mismarks) Damage Ratio (At-Fault Damages vs. Total

Ticket Volume) Ticket Transmission ConfirmationsIndependent Damage Investigations (Third

Party or Utility Employee rather than Locate Contractor)

FEEDBACK & PARTICIPATION

MOCS is Member-Owned & GovernedMOCS is Non-ProfitTelecommunication Industry is heavily

representedQuarterly Operating Committee MeetingsQuarterly Board of Directors MeetingsCoalitions for Legislative SupportSuggest Changes for Greater Efficiencies/Cost

SavingsAttend MOCS Seminars, Meetings, and Events

TOOLS/RESOURCES AVAILABLE

MOCS Board of Directors & Operating Committee

MOCS Management TeamMOCS Website & NewslettersOnline Training ModuleOnline Ticket Database for Research/AuditingOn-site seminars/educationPublic relations and awarenessEducational Materials

REPORTS

Main Member Reports Page

Click on Caller Header Report

Specify Date Range

Specify County

Specify Type of Caller

This provides a breakdown by caller and the type of tickets that they called in

Specify Date Range Specify District

Code

Specify County

Specify Email Address if you wish to export the data to a spreadsheet

This report will provide the number of total tickets requested by the caller in the specified date range

Click on Ticket Reports

Click on Relocate Report

Specify Date Range

Specify number of Renewals

This report will show how many times a specific ticket has been renewed and who called it in

Click on Ticket Search

Specify District Code

Specify parameter to search by

Specify County

Specify Date Range

This report will return all tickets that match the defined parameters and allow you to look at each ticket individually

Click on Ticket Transmission Report

Specify Date Range

Specify District Code

Specify Email Address if you want to export to a spreadsheet

This report shows all tickets received in the specified date range

QUESTIONS?

Derek S. Leffert573.280.8500 Cell

573.635.1818 Officederekl@mo1call.com