To: Mike Wildgen, City Manager
Debbie Van Saun, Assistant City Manager
Dave Corliss, Assistant City Manager
Ed Mullins, Finance Director
From: Charles F. Soules, Public Works Director
Subject: 2005 Budget Request Letter of Transmittal
Date: May 7, 2004
This letter summarizes the Public Works Department budget request for 2005. As you are well aware, 2004 was a very challenging year to fund programs and services city-wide. Employees did not receive a general wage adjustment. Public Works deferred all equipment and vehicle purchases in the general fund, overlay and curb repair were reduced $200,000, contingency funding was eliminated, and no program improvement requests were submitted at all. The result is pent-up demand, particularly related to deferred infrastructure maintenance and replacement (including equipment). Public Works Department managers and staff understand that it is not feasible for every request to be funded fully at this time. We do believe, however, that we have a responsibility to present the needs we can identify to the City Manager, staff, and the City Commission for their consideration.
The divisions of Public Works provide community services (Solid Waste Division), interdepartmental support and services (Central Maintenance Garage and Building and Structures Division), infrastructure maintenance (Street Maintenance Division, Traffic and Stormwater), and oversees public improvements (Engineering Division). Public Works projects are vital to the growth, health, safety, comfort and quality of life for our community. The services provided by this department are fundamentally embedded in the goals established by the City Commission.
The department participated in a facilitated goal setting process this winter to establish strategic goals for Public Works. The strategic goals identified by Public Works managers were then submitted to all supervisory staff. A draft of the resulting document is attached for your review. Below are highlighted the five strategic goals:
Improve community understanding of Public Works functions and services to ensure a positive public image.
Update and expand Public Works facilities to address service delivery needs for divisions and enhance community service.
Increase efficiency and enhance performance of Public Works functions to support the overall mission of the department and the City.
Maintain adequate infrastructure to sustain the quality of life expected by the community.
Support employees in meaningful ways.
The most critical issues facing the Public Works are completing the West 40 service center, the continuing deferred maintenance of infrastructure and providing adequate personnel to keep up with demands. We are not able to maintain adequately the huge investments in infrastructure at current funding levels. Program improvements packages have been submitted focusing on personnel and specific infrastructure maintenance needs, including buildings, facilities, and streets. Please give our program improvement packages your utmost consideration.
PUBLIC WORKS DIVISION BUDGET REQUESTS
Unless stated otherwise, there are no significant changes in the budget requests submitted. Narrative under each division will address overall changes in the budget totals. Reallocation of resources within each division budget has been made to address current operational needs. Critical issues and future needs are discussed, as necessary.
Street Maintenance Division
The budget for the Street Maintenance Division includes the following separate budget divisions:
Special gas tax fund (214-3800-578)
General fund street maintenance (001-3000-570)
General fund airport (001-3300-573)
General fund levee maintenance (001-3700-577)
In addition, the Street Division Manager supervises the field crews for the Stormwater Utility, who are funded from 505-3900-579.
Gas tax fund: The gas tax fund supports the vast majority of employees in the Street Maintenance Division. Materials and commodities for infrastructure repairs are budgeted in this fund, such as concrete and asphalt. Just under $1 million is designated for annual maintenance contracts (e.g., overlay, curb repair, chip and seal). All equipment supporting maintenance operations is purchased with gas tax funds.
For the second year in a row, the budget request presented is less than the 2003 budget. There are two reasons for the reduction – fund balance concerns and personnel / overtime costs.
Based on preliminary calculations, the gas tax fund balance decreased $288,749 from the end of year 2002 to the end of year 2003. The year prior to that, the fund balance forward decreased $265,287. Since the end of the year 2000, we have spent $530,663 more than the revenue transferred to us by the state. The request submitted eliminates or reduces funding for brick street repairs and sidewalks. Further cuts may need to be considered. Attached to the end of the transmittal letter is a staff memo generated in April highlighting concerns over the fund balance.
The budget presented includes additional costs for employees, benefit programs (FICA, KPERS, health insurance), and overtime. Adequate funding for overtime in the Street Division has been identified as a critical issue for productivity in that work group. A comp time option was implemented several years ago to save overtime dollars in the Gas Tax Fund. Employees can accumulate up to 120 hours of comp time in lieu of overtime for extended duty on snow removal and ice control. The program is popular among employees and is an effective tool for saving overtime dollars. On the down side, it has a direct effect on staff availability and work group productivity. In the 2003-2004 winter, 3240 hours of comp time has accumulated, which equates to 1.5 full-time equivalents (FTE). In addition, over 70% of our overtime budget was also spent year-to-date in 2004, once employees reached the maximum 120 hour accumulation. To be fair, this was an unusually challenging winter. The winter before, only 1335 hours of comp time were accumulated, equating to .6 FTE. We need to fund overtime pay sufficiently so that the comp time program can be reduced by 50% in 2005. Those adjustments have been made, but resulted in decreased funding for contracted maintenance services. A program improvement package was requested out of the General Fund that would offset those decreases.
The budget presented is not as conservative as have been presented historically. Revenues will be monitored in 2004 and 2005. Further reductions in contracted programs may be required.
General fund street maintenance, airport, and levee divisions: The general fund street maintenance budget supports maintenance operations. Materials are supplied through this budget including concrete, asphalt, salt, sand, rock, guardrail, and so on. All equipment fuel and maintenance is funded in this division (equipment is originally purchased from the gas tax fund). The airport division supports the building maintenance for the main terminal, mowing, weed control and snow removal for runways, utility requirements, and provides a transfer to the Airport Improvement fund. The levee division provides weed control, mowing, slope repair, and levee gate maintenance along the entire flood control project.
The budget request submitted reallocated funds between line items and stayed within existing resources. Specifically, budget authority was reduced for curb repair by $25,000 to fund additional requirements for fuel, salt, and overtime. Additional funding may be necessary for fuel, depending on market prices and use.
Four program improvement requests are submitted in the General Fund, Street Maintenance Division. All four focus on basic infrastructure maintenance. The two highest priority requests are to replace funds for infrastructure maintenance reduced in the gas tax fund (mentioned above) and funding to issue a crack sealing contract in 2005. The first request asks for a modest $30,700 to replace actual funding reductions for 2005 in the Gas Tax Fund for overlay, chip and seal, and curb repair. It is extremely important to understand those line items have been reduced by another $225,000 in the General Fund over the last two years. The request for funding for a crack sealing contract has been discussed with the City Commission recently on a conceptual level. The $100,000 crack-sealing contract would supplement in-house crack sealing activities. The annual contract over the next several years would allow a “catch-up,” after which time the program could be maintained internally.
The Street Division is also requesting three additional maintenance workers. Generally, the additional staff would add one person to each of the following crews – concrete, asphalt, levee/sweeping. No staff has been added to the street maintenance function since the late 1990’s, despite growth and service demands. The addition of maintenance workers would provide staffing for one additional snow route for winter operations. Funding this request may replace funding the crack-sealing contract above.
Finally, we are submitting a request to fund downtown alley reconstruction, at a rate that would allow for one alley to be reconstructed per year. This program has been requested for many years, as it directly affects the City Commission’s goals regarding downtown. In 2004, one of the downtown alleys was identified for reconstruction. While we fully embrace the need for that activity and improvement, proceeding with a downtown alley reconstruction program without funding it simply results in less funding availability for other infrastructure maintenance needs.
Engineering Division
The Engineering Division supports all plan review and construction management activities (project inspection), information system management (engineering technician and GIS support), and provides supervision for the traffic, Stormwater, and pavement management programs
The budget submitted reallocated resources between line items and does not request an increase in funding, excluding personnel costs, over 2004 reduced levels. This is a challenging budget for us to manage in its reduced form. Over 66 percent of our funding for training and professional development was eliminated with the reductions to the 2003 budget. None of that funding was restored in 2004. Engineering staff members fill technical positions where cutting edge technology and techniques are critical to efficient performance of our functions. Three professional engineers on staff must attain a minimum number of professional development hours, similar to requirements for attorneys. The inspection staff has been working toward KDOT certifications in various specialties. The reduction in training will have very long-term consequences if extended any further. Your utmost consideration of training needs is encouraged.
We are requesting replacement of one truck in this division. We have been deferring equipment replacement since 2002. Unit 708 has been identified by the Garage as needing immediate consideration for replacement.
One program improvement is included in the Engineering budget to purchase survey equipment. Currently, our Engineering Aide is using his personal survey equipment to perform City work. There are issues arising with replacement of that equipment due to breakage and age. The employee does not have to supply the equipment, which would seriously inhibit our ability to do any in-house surveying, grade shots, and so on.
Traffic Engineering
The Traffic Engineering budget provides personnel, equipment and operations to support engineering functions, signal repair and maintenance, signs and pavement markings city wide. In addition to the general fund budget, $50,000 is set-aside in the gas tax fund to support traffic signal operations or enhancements.
A program improvement package is being submitted to fund residential traffic calming devices approved by the City Commission. Increasingly, existing neighborhoods are demanding a variety of traffic calming measures. Staff is drafting a policy for how such devices will be funded. To date, those have been approved by the City Commission without regard to availability of funding. This request would provide a line item to fund the City’s share when approved by the City Commission. Note: This item has also been included as a request in the CIP, and could be appropriately funded in that manner.
A second program improvement package is being submitted for your consideration to increase annual funding for the pavement marking program by $10,000. Long-lasting pavement markings are currently installed as part of resurfacing projects. However, many of the markings, particularly at intersections, wear out before the street is again scheduled for resurfacing. The additional funding will reduce complaints and better position the City to meet retro-reflectivity standards when they are implemented.
Building Maintenance
The Buildings and Structures Division details a budget for building maintenance and one for the Arts Center, which are combined in the printed document as Building Maintenance (001-3400-574). The division also manages the budget and personnel for the Community Health Facility (001-2500-565) and the maintenance work for the parking garages (funded from fund 503).
The top funding priority for the Building Maintenance Division is to hire an HVAC (heating, ventilation, air conditioning) specialist (Senior Maintenance Worker). In 2003, we converted an existing position to a licensed electrician. In the last two yeas, we have saved between $120,000 and $150,000 in contracted electrical repairs AND improved the quality and timeliness of response. The addition of an HVAC specialist may not be quite as dramatic, but will result in significant direct cost savings once the person becomes self-sufficient with all the different systems serviced. Upon hire, we would be able to eliminate approximately $10,000 worth of HVAC contracts. That amount will increase over time. Within one year of hire, cost savings will exceed salary and benefits, service will be enhanced, and we will have significantly improved our preventive maintenance programs.
The second priority in Building Maintenance is to fund a field supervisor position. While it would be nice to have a new position and expand our internal service capacity, it is more realistic to fund reclassifying one of the existing Senior Maintenance Worker positions to a Field Supervisor level. The Field Supervisor would be a working supervisor, with additional responsibilities for daily task assignment, employee development, and performance monitoring. This would enable the Building and Structures Manager to take on additional responsibilities at the airport and to enhance our long range planning abilities. The total cost is estimated to be just over $6000.
The City Hall HVAC project, Phase V, needs to be funded. The HVAC project was stated in 1999. The HVAC units and duct work have been completed for all areas of City Hall except the 2nd floor. The 2nd floor still operates on an old pneumatic system with an air handling unit that will be eliminated once the project is complete. This may also be an appropriate item for CIP funding.
Finally, additional funding is needed to meet basic building maintenance requirements for newer facilities whose building warranties are expiring. Facilities that are no longer covered under warranty or whose warranties are expiring by 2005 include the new Arts Center and the fire station on Harper. An additional $16,000 in funding is requested.
The budget for the Community Health Facility reallocates funding between line items and stays within existing resources, excluding personnel.
Street Lights
The Street Light budget pays Westar for street lights and electricity for traffic signals and school beacons. Funding has been increased in this budget by $40,000 to account for growth in the community, an increased number of lights, and electric rates. No major projects are budgeted to extend lighting in existing areas where none exist now.
Central Maintenance Garage
The Central Maintenance Garage is a non-budgeted fund. This budget request seeks to fund adequately the line items for commercial repairs, parts and inventory, and gasoline. Departments are billed for fuel, labor, and parts. We have requested very significant increases in our base budget authority, to account for escalating fuel and parts costs. If fuel prices drop or commercial repairs are not needed, this budget authority will not be used.
A number of items are included in the Central Maintenance Garage budget that will be pursued only if revenues are sufficient to that fund in 2005 to do so. In 2005, we plan to replace the original 30,000 b.t.u. air exchanger on the buildings. The current system is no longer available (new or used) and has become so antiquated that parts are no longer available for repair of the system when needed. This significant building purchase will use fund balance rather than operating revenues for funding.
Solid Waste Division
The Solid Waste Division budget submitted supports continuation of existing service levels, with minimal enhancements to existing programs.
The division request includes two additional staff in 2005. These staff additions were originally planned for 2004 to meet service needs, but were deferred for an additional year. Equipment will be replaced according to our equipment replacement schedule, and in accordance with recommendations from the Central Maintenance Garage.
A rate increase of two percent will be needed for the 2005 operating year. We are firmly committed to small and consistent annual rate increases approximating changes in inflation and personnel costs, and avoiding the erratic and sometimes large rate increases seen in the past. A chart of solid waste rate increases since 1988 will be presented during our budget meeting.
The proposed rate increase of two percent will allow us to continue providing services at the existing level and maintain an adequate fund balance. Maintaining an adequate fund balance is particularly important at this time for a variety of reasons:
The possibility that landfill tipping fees are increased greatly.
The possibility of a state increase in the current surcharge on tonnage. This has recently been discussed by the legislature.
The reality of certain years requiring much larger capital expenditures, primarily due to the scheduled replacement of heavy trucks.
As submitted, the budget request provides for increases in employee benefit costs, landfill tonnage, equipment maintenance and fuel costs, and modest enhancements for the existing programs, such as a pole barn and landscaping for the compost facility, and minor facility enhancements for SWAN (the Solid Waste Annex North).
The two staff persons budgeted for 2005 are a Solid Waste Operator and a Maintenance Worker. The addition of the Solid Waste Operator will allow a full crew to be assigned to regular routes for the residential areas. The crew is required to keep up with increased demand for service due to residential growth, to maintain timely service, and to avoid additional overtime costs. Additional maintenance operations is needed due to increases in the number of dumpsters delivered, repaired, and maintained, increases in roll-out cart subscriptions, growth of the refrigerant recovery and recycling program, an increase in the number of leased trash compactors requiring maintenance, and increasing numbers of drop-off recycling containers used. Both staff persons are included in the budgets submitted.
Stormwater Division
The Stormwater Division provides general maintenance for 6500 stormwater inlets and junction boxes and 120 miles of stormwater pipe. Additionally, major construction projects are funded in accordance with the master plan, such as 21st and Naismith (completed), 21st and Barker (completed) and 13th and Oregon (under construction). The stormwater rate was increased for calendar year 2003 to $4 per ERU (equivalent residential unit) to fund the above capital construction projects. No further increase is proposed in 2005.
Bonds will be issued this year for the major construction projects, which significantly decreases funding available for small discretionary projects in the Stormwater Utility. Regardless, major progress and improvements have been made on our overall network and the priority projects of the Stormwater Master Plan. The Stormwater Utility must be diligent about maintaining an adequate fund balance forward to cover bond and interest costs between 2005 and 2009. During those years, we will be repaying bonds from the first and second phases of major stormwater improvements. The bonds for the first set of projects should be retiring in 2009.
Please advise if you have any questions or would like additional information in any of these areas.
Respectfully submitted,
Charles F. Soules, P.E.
Public Works Director
Public Works Department
Strategic Goals + Action Plan
Includes do-able elements for the next 12 to 18 months
Developed by the Public Works supervisory team, March 5, 2004
|
Improve community understanding of Public Works functions and services to ensure a positive public image. |
|
|
|
Streamline documentation of work completed to be reportable and meaningful Expand web site and information provided to public Educate staff of various functions of all Public Works Divisions Better publicize our services (not obvious ones) and communicate value for the tax dollars Increase use of radio and TV media for educational and advertising communications, where appropriate Update specifications and standards Implement program for project summary signs Provide information and statistics on recycling activities Provide a reference for employees to use with customers to ensure that employees are able to provide consistent and reliable information
|
|
Update and expand Public Works facilities to address service delivery needs for divisions and enhance community service. |
|
|
|
West 40 development. Possible elements include street division, garage functions, traffic division, enclosed car wash, roll-off storage Continue development of the compost site Enhancement of solid waste facilities, including provision of adequate office spaces, employee meeting areas, HHW functions Research purchase of land next to SWAN for possible expansion of container maintenance and / or HHW functions Create GPS database for infrastructure elements (incl. signs and signals) Continue transition to digital document storage
|
|
Increase efficiency and enhance performance of Public Works functions to support the overall mission of the department and the City. |
|
|
|
Upgrade work management and inventory systems Increase training for employees, including cross-training between crews Implement ban on plastic bags from yard waste for 2005 Expand 90 gallon container program for residential trash and recycling Implement pavement management program by completing initial rating for all pavement in first quarter of 2005 Expand signal coordination Update training and provide training for operators of equipment Upgrade equipment to maximize effectiveness of existing personnel Implement performance measurement systems relating to service delivery Implement safety programs including review of division logs to meet departmental goals for consistency
|
|
Maintain adequate infrastructure to sustain the quality of life expected by the community. |
|
|
|
Demonstrate needs for infrastructure funding at adequate levels, including routine and preventive maintenance Review and re-route the Solid Waste collection crews Compost site improvements (Solid Waste) Submit grant request for improvements at HHW Update of specifications and standards Complete initial pavement management rating for all city streets and airport Increase communication with divisions to provide support needed Training for staff regarding changes in equipment technology Compare and benchmark – both internal and external. Find mechanisms to understand community expectations and compare, including equipment, personnel, technology, and training Identify opportunities to be proactive in providing operational information to the City Commission and citizens
|
|
Support employees in meaningful ways. |
|
|
|
Provide opportunities for employee feedback and address employee concerns Enhance training program to provide meaningful training for employees Continue to enhance safety programs and awards To support employees in meaningful ways, the department needs to understand what is meaningful to employees. Supervisors identified the following elements as meaningful to employees (although some are beyond the scope of the department): [not listed in order of importance] Salaries and annual adjustments Work itself is meaningful Ability to voice feedback Training – need to maintain Clear expectations to employees Benefits Promotions Clear disciplinary steps Recognize priorities change (as careers and longevity progress) Providing the right tools to do the job Recognizing longevity Providing meaningful mechanism for input |
Memo
To: Charles Soules, Director of Public Works
Ed Mullins, Director of Finance
From: Tammy Bennett, Senior Management Analyst
Date: April 27, 2004
Re: Status of the Gas Tax Fund, fund balance forward
The fund balance forward has been decreasing over the last several years for the Gas Tax Fund, commonly referred to as fund 214. I received an estimate from Laura Warner last week for the fund balance coming into 2004, which was somewhat alarming. To show the trend, the fund balance forward figures are outlined below:
|
Begin year |
Fund balance |
as of date |
Revenue for fiscal year: |
|
|
State share |
County Share |
|||
|
2001 |
$ 826,878 |
12-31-00 |
$ 2,389,230 |
$ 183,103 |
|
2002 |
$ 820,251 |
12-31-01 |
$ 2,393,432 |
$ 169,054 |
|
2003 |
$ 584,964 |
12-31-02 |
$ 2,238,540 |
$ 153,293 |
|
2004 |
$ 296,215 |
12-31-03 |
$ 750,770 ytd |
$ 49,743 ytd |
The department needs to be cautious of fund balance both for managing expenditures in 2004 and for budgeting for 2005. The 2004 authorized budget for the fund is $2,590,000 in revenue and $2,903,499 in expenditures. The first revenue check from the state has been received and was very positive (e.g., a 28% increase over the first quarter distribution last year). I have attached a draft estimate of revenue, which would indicate our total revenues in 2004 may come in as high as $2.66 million in 2004. If revenue comes in at that rate and all budgeted funds are expended, our fund balance forward into 2005 will be insufficient to maintain the level of maintenance and personnel funding budgeted in 2004.
At this time, the department needs to evaluate opportunities to reduce expenditures. The recommended street maintenance program has been authorized by the City Commission. In addition, we have already expended most funds for both overtime (during snow removal) and equipment. If we defer any projects this year associated with line items for bricks (45-03) and sidewalks (45-12), we will save approximately $98,000. [Note: We do plan to defer these items, but they are still technically authorized in the budget in 2004.] In addition, a small contingency is built into the street maintenance projects. With good bids and a minimum number of last minute additions to the maintenance contracts, we will end the year comfortably from a revenue / expenditure perspective.
The revenue status of fund 214 should be re-evaluated after the next revenue check is received. Please forward this information to the City Manager’s Office, as appropriate.
Lawrence Journal World, 4-21-04,
Editorial