April 13, 1999
To:Budget Committee
From :Margaret Rodrigues
Commissioner, Corporate Services Department
Subject:Fleet Management Services Program
1999 Operating Budget
Purpose:
This report provides the Budget Committee with responses to the motions tabled at the Budget
Committee Meeting on April 7, 1999 which directly affect the Fleet Management Services
Program.
Funding Sources, Financial Implications and Impact Statement:
N/A
Recommendations:
That this report be received for information.
Discussion:
The following are my responses to the motions directly affecting Fleet Management Services:
(1) The fleet maintenance budget be reduced, on an annualized basis, by the same
percentage by which the fleet size is reduced.
As the size of the fleet is reduced, the City's maintenance costs are reduced. The actual
amount of the reduction is dependant on the type of vehicle or equipment unit becoming
surplus. Any reduction in maintenance costs will be offset be a corresponding reduction in
revenue.
As noted in my previous report, not all maintenance costs are centralized in the Fleet
Management Services Division budget, therefore, not all fleet reductions will result in a
reduction in the Division's budget. In addition, the City will continue to incur significant fixed
asset costs even with a reduced fleet.
(2) The fleet maintenance budget be reduced, on an annualized basis, by the same
percentage by which the fleet replacement expenditure in 1999, representing a percentage
of the total estimated fleet value:
If the replacement program is approved as recommended in my report to Budget Committee,
dated April 6, 1999, the delivery of the new vehicles and equipment will not take place until
late 1999 or early 2000. The savings impact will not be realized in the 1999 budget year. The
1999 Replacement Program was intended to stabilize maintenance costs in a fleet that
continues to increase in age.
As I noted in my April 6, 1999 report, only 52.8% of the vehicle and equipment units that are
due or overdue were being recommended for replacement at this time. Maintenance costs will
continue to rise until the overdue units are replaced. Further reduction of the 1999 program
will also result in increased maintenance costs. Reducing maintenance costs before a
significant replacement of older fleet units, could impact the safety of workers and the public,
which could increase the City's liability costs and place the City's Commercial Vehicle
Operator Registration Certificate at risk.
(3) Of the 20 garages operated by the Fleet Division the following six are recommended
for closure based on the following criteria; very low utilization level (under 10 percent);
lifts/cranes not provided at the locations and proximity to other garages:
(a) 435 Kipling Avenue;
(b) Bermondsey Yard;
(c) Emery Yard;
(d) Ingram Yard;
(e) Leslie Street (at Sheppard); and
(f) 50 Booth Avenue.
Fleet Management Services currently operates only 18 garages not 20. Of the six listed and
recommended for closure, 435 Kipling is not a garage site. This facility is operated by the
Works and Emergency Services Department which provides an office for one Fleet Safety
Driver Trainer who is located at that site and provides fleet safety services to the entire
Etobicoke area.
Closing Bermondsey, Emery, Ingram and Leslie yards, at this time, would have a serious
negative impact on Solid Waste Management, Works and Emergency Services. These four
garages are North York locations and closure would significantly increase travel time for
repairs and costs to client Divisions, who would continue to provide their services to the
public out of these yards pending the Yards Rationalization Study. Given the running repair
type of work performed at these locations, lifts and cranes are not required and a minimum
level of staff provide coverage. Any garage closures must be done in consultation with the
client Divisions, to ensure service requirements can continue to be met.
The garage located at 50 Booth Avenue is within one of the largest yard facilities in Toronto.
This is a major yard facility of Solid Waste Management, Water Wastewater, Transportation
and Parks & Recreation. The current utilization level at this location is 23% and there are 3
lift and 1 crane at this location. At the present time, this garage operates from 6:30 am to
11:30 pm, 5 days per week. Closing this location will result in serious delays in running
repairs and increased downtime for vehicles and equipment.
The City will continue to incur significant fixed asset costs, even if garage locations are
closed, since the majority of garages are small components of City yards.
These garages will be reviewed in context of the KPMG Fleet Study and reported back to the
Corporate Services and Finance Committees.
(4) Target reduction of at least $1 million equivalent to 25 percent of the potential $4
million in savings be set for 1999 and a further 25 percent reduction could be targeted for
the year 2000.
The report to the Budget Committee dated March 30, 1999 responded to this motion. I have
been advised that the Finance Department is recommending a prorated reduction of $0.5
million. This will be taken out of services & rents.
- The savings targeted be part of an efficiency "phase in" plan to permit the garage to have
some time to become competitive and the expenditure reductions are not intended to result
in lower service levels for departments as the garage will have to achieve the savings
through higher efficiencies.
Please see response to point (4) above.
- The Chief Administrative Officer be requested to reduce the fleet by five percent by
December 31, 1999.
Staff will be preparing a report for the Chief Administrative Officer's signature to respond to
this direction.
(7) Members of Committee, and the Chief Financial Officer be provided with the final
draft of the KPMG study for their perusal on April 7, 1999.
Requested material was distributed on April 13th, 1999. A briefing by KPMG is currently
being arranged.
- The Budget Committee express its concern regarding the way in which the fleet reduction
has been handled to the Mayor and ask the Mayor to take the appropriate action.
Chief Administrative Officer to respond.
(9) Senior Staff (6 Commissioners), the Chief Administrative Officer and the Fleet
Manager be requested to meet and discuss a method, acceptable to all parties, for the
charge back of vehicles to departments and report back thereon to the Corporate Services
Committee by this summer.
This project is included in the Fleet Management Services Division's work plan and will be
reported to the Corporate Services Committee in the time frame requested.
(10) The Chief Administrative Officer be requested to report back to the budget
Committee on the following matters:
(a)a Fleet Assignment Policy by April 30, 1999 for the assignment of vehicles for business
use and for vehicles provided as part of compensation; and
This policy is currently in preparation for review by the Senior Management Team, and
submission to the Corporate Services Committee in May 1999.
(b)a zero base review of all fleet based on the City's Fleet Assignment Policy and report
back on fleet reductions by end of June, 1999, including all ABC's.
It is important that this review be undertaken in the context of harmonization of service levels
being determined by Council as part of the 1999 Operating Budget process. Staff request a
revised deadline of September 1999 to allow departments to complete a full reassessment of
their fleet requirements.
- The Commissioner of Corporate Services be requested to report back to the Budget
Committee on:
(a) the budgeted expenditures in the City for the maintenance of real property (including
housing units), facilities, fleet, plant and machinery, parks and green space, roads and other
infrastructure and the full time equivalent staff involved in the respective program areas, along
with details of existing systems and standards in use for monitoring staff productivity and
output levels, by April 30, 1999. (Maintenance Services);
(b)the establishment of a common City wide job and project costing system which includes
tracking of staff time and cost for specific jobs\tasks, and sets standards for all recurring
jobs/tasks, by June 30, 1999 (Maintenance Services); and
Motion (a) and (b) will be responded to by the Chief Financial Officer in consultation with the
Commissioner of Corporate Services.
(c) Kind of delays caused to the Works Department due to delay of repairs of equipment.
Approximately 75% of the work performed in Fleet Management Services is for the Works
and Emergency Services Department. Program areas that must meet schedules for delivery of
services to the public would have the greatest impact of delays in maintenance. Delays can
range from a minor inconvenience while a small repair in completed, to insufficient
equipment for a crew to perform its function.
Other maintenance intensive vehicles and equipment such as street sweepers, dump trucks and
earth moving equipment could be delayed, since the age of the fleet increases maintenance
requirements.
Seasonal changeover of vehicles and equipment could take longer to complete which could
delay the ability of WES staff to begin their seasonal program (e.g. Respond to snowstorms
that occur late in the year).
If vehicles and equipment are not available when required, alternate measures such as an
additional shift or increased overtime costs are incurred to complete their work. The Division
attempts to prioritize work to minimize these occurrences, however, emergency repairs to Fire
Services vehicles, other emergency vehicles, specialized units which could result in short term
layoff of staff, or in cases such as snow emergencies, can all have an impact on the Division's
ability to meet service needs.
Although there have been 2 instances when it has been problematic to keep equipment on the
road, at the Budget Committee meeting of April 7, 1999, the WES Commissioner stated that
services are currently generally acceptable. Fleet Management Services staff will be working
with all client Divisions to initiate Service Level Agreements to address service requirements.
- The City Auditor be requested to review the Terms of Reference and all correspondence
between the City and KPMG and report back to the Budget Committee on:
(a) whether the Terms of Reference have been fully complied with;
(b) whether reasonable grounds exist to terminate the project for reasons of non-compliance;
and
(c) usefulness of work completed and fair amount payable.
Corporate Services Department staff will provide whatever information or assistance is
required by the City Auditor to complete his review of the KPMG Fleet Study.
(13) The Fleet Manager be requested to report back on alternatives that are less costly
pertaining to the Y2K program.
During the analysis of the options available, which would meet both the business and Y2K
requirements, the least costly option was selected for implementation and approved by City
Council. The decision was made to choose an existing application from a former municipality
and upgrade it to ensure Y2K compliance.
Contact Name:
Stan Burrows
Director, Fleet Management Services (392-7791)
Margaret Rodrigues
Commissioner of Corporate Services
