CITY OF TORONTO Fleet Services 2011 Recommended Operating Budget & Capital Plan. January 13, 2011

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1 CITY OF TORONTO Fleet Services 2011 Recommended Operating Budget & Capital Plan January 13, 2011

2 Agenda 1. Program Overview Service Performance Recommended Operating Budget Recommended Capital Budget and Plan Capital Performance Key Issues Recommended Capital Budget 2

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4 Introduction What we do: Acquisition and disposal of the City vehicles and equipment Maintain fleet inventory for provision of: Salt and plow trucks for snow removal Sweepers for street cleaning Trucks to pick up garbage, repair potholes and fix water main breaks Aerial trucks to maintain tree canopy Trucks and equipment to maintain parks and beaches Vehicles for animal services and bylaw enforcements Bookmobiles and vans for the transport of library materials Train and license drivers and operators of City vehicles and equipment Management and oversight of the City s fuel sites 4

5 Program Mission Mission Statement: To provide responsive and efficient fleet management services to City Divisions, Agencies, Boards and Commissions that maximizes safety and environmental sustainability and minimizes life cycle costs. 5

6 Key Strategic Directions Environmental Stewardship Implement the Green Fleet Plan Strategic Asset Management Reduce the Number of City-Owned Fuel Sites, Vehicles and Equipment Leverage Information Technology Integrate the Fleet Management System with the City s fueling sites Service Excellence Update Service Level Agreements with Client Divisions Undertake operational reviews to support continuous improvement. 6

7 Program Opportunities & Challenges Delivering excellence in environmental stewardship We are reviewing the scope of the biofuel program and the replacement of vehicles with green vehicles program to look for more cost effective ways to achieve the environmental goals set out in the Green Fleet Plan. Service demands To meet Clients' demand on service, Fleet has continually re-aligned maintenance operations at various Fleet locations. Human resource challenges Fleet Services has an aging workforce. Age of assets and infrastructure Due to fiscal constraints, Divisions have reduced their annual reserve contributions for vehicle replacements. 7

8 Program Opportunities & Challenges Negotiations with client Divisions Complete service level agreements. Consolidate, upgrade and close fuel sites. Reduce their fleet inventory ensuring that all vehicles on hand are required and fully utilized. Legislated requirements and compliance with provincial regulations Any changes in legislation will result in greater demand in driver safety training and higher maintenance costs to ensure compliance. Integration between Fleet and Fuel management systems Provide real time data transmission between the two systems. 8

9 Service Objectives To implement the Green Fleet Plan Provide leadership in the advancement of the City green fleet and environmental goals related to fleet utilization. Continue to reduce fuel use and fuel costs by choosing more environmentally sustainable vehicles, fuels and practices. Replace, at minimum, 200 vehicles with green vehicles. Promote Idle Free campaign. To reduce the average downtime of vehicles to less than 4 hours Reduce the average life of vehicles from 14 years to 8 years. Reduce unscheduled repairs from 51% to 48% of the total vehicle repairs by

10 Service Objectives To implement the new fuel purchasing program, a strategy to minimize the impacts of fluctuating market fuel prices and to reduce fuel costs. To reduce the number of City-owned fuel sites from 56 to 54 in To work closely with the client Divisions to reduce the size of their fleet inventory, ensuring that all vehicles on hand are required and fully utilized. To continue working closely with client Divisions to maintain or improve the Commercial Vehicle Operators Registration (CVOR) safety rating in good standing, with an on-road performance level of 70% or less of the total overall CVOR threshold. 10

11 Program Map Fleet Services Fleet Management Fuel Management Fleet Acquisition Fuel Acquisition Fleet Maintenance Fuel Distribution Fleet Disposal Vehicle Safety 11

12 2010 Organizational Structure Director, Fleet Services (205) Manager Finance & Accounting (15) Manager Fleet (Asset Management) (11) Manager Environmental & Business Planning & Support (3) Manager Fleet Maintenance (South & West) (79) Manager Fleet Maintenance (North & East) (81) Manager Fleet (Safety & Training) (14) 12

13 Staffing Trend Approved Positions Key Points: Rec No significant changes in staffing level from 2005 to 2010 An increase of 5 positions in 2009 resulted from the transfer of 2 positions from PMMD, 1 new Manager, Environmental Planning & Support position and 2 new developmental positions for succession planning Decrease of 2 developmental positions and 2 vacancies in 2010 as part of service review reductions Recommended 2011: delete 12 positions resulting from re-engineering parts warehouse process and 1 vacant Fleet Safety & Education Consultant position 13

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15 2010 Key Accomplishments Continued to increase the City's Fleet of Green Vehicles, bringing the 2010 total to 562. Commenced the installation of idle free devices in the light-duty vehicles to reduce fuel consumption, costs and CO2 emissions. Managed the corporate contracts for external leased vehicles. Fleet coordinates and provides short term rental vehicles to City Divisions. Upgraded two City-owned fuel sites to reduce environmental risks and to improve operational efficiencies. Continued the process of joint tender of fuel and hedging with TTC. Maintained the Provincial Commercial Vehicle Operators Registration (CVOR) safety rating in good standing below 70%. The projected overall CVOR rating for 2010 is 51%. 15

16 Key Performance Metrics Efficiency Measures Cost per On-road Vehicle ($) Cost per Off-road Equipment ($) Effectiveness Measures Unscheduled Maintenance Repair Rate Provincial Commercial Vehicle Operators Registration (safety) Rating 16

17 Cost per On Road Vehicle ($) Explanation of Performance Measure Trend: Cost per on road vehicle has decreased due to lower operating costs from reduced average life of vehicles and a reduction in the vehicle backlog due for replacement. 17

18 Cost per Off Road Equipment ($) Explanation of Performance Measure Trend: Cost per off road equipment is targeted to decrease due to lower operating costs from reduced average life of the equipment and a reduction in the equipment backlog due for replacement. 18

19 Unscheduled Maintenance Repair Rate Explanation of Performance Measure Trend: The percentage of work orders created for unscheduled maintenance. A newer fleet base, continued driver & safety training, and an effective preventative maintenance scheduling will result in a decrease in the unscheduled service requests. 19

20 Provincial Commercial Vehicle Operators Registration (CVOR) Rating Explanation of Performance Measure Trend: A satisfactory safety rating is based at under 70% of the overall CVOR threshold. Fleet Services continues to work closely with client Division to maintain or improve CVOR safety rating in good standing. 20

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22 2011 Key Issues Cover increased operating costs while maintaining fleet maintenance rates to Divisions at 2009 level. Meet the 10% budget reduction targets over the two years (2010 and 2011). Continually shift maintenance operations at various Fleet locations in order to meet clients needs. Lack of funding to develop and implement a succession plan to address aging workforce. 22

23 2011 Operating Budget Highlights The recommended budget provides funding to: Manage and maintain approximately 4,900 vehicles and pieces of equipment with an estimated replacement value of $286 million Process approximately 34,000 repair orders annually on a timely basis Manage 21 and oversee 35 fuel sites for a total of 56 sites Ensure fuel is available 24/7 to support divisional operations Conduct 220 spot checks annually to ensure safe usage 23

24 2011 Operating Budget Highlights The recommended budget provides funding to: Assess and maintain records for 10,000 driver permits Provide training and testing for Ontario Ministry of Transportation license upgrades to 2,000 City operators annually 24

25 2011 Recommended Operating Budget by Expenditure Category($000s) Change from Actual Actual Budget Projected Recommended 2010 Approved Actual Budget Budget Outlook Outlook $ $ $ $ $ $ % $ $ Salaries and Benefits 17, , , , ,062.0 (800.0) (4.2%) 17, ,948.6 Materials and Supplies 26, , , , ,715.0 (569.8) (2.4%) 22, ,686.5 Equipment (22.9) (19.5%) Services & Rents 7, , , , , , % 6, ,813.1 Contributions to Capital 0.0 n/a Contributions to Reserve/Res Funds % Other Expenditures (0.9) n/a Interdivisional Charges % n/a TOTAL GROSS EXPENDITURES 51, , , , ,010.3 (67.9) (0.1%) 48, ,054.2 Interdivisional Recoveries 48, , , , ,211.5 (142.2) (0.3%) 47, ,255.4 Provincial Subsidies 5.0 Federal Subsidies Other Subsidies User Fees & Donations 9.0 Transfers from Capital Fund % Contribution from Reserve Funds Contribution from Reserve Sundry Revenues (40.9) (5.7%) TOTAL REVENUE 49, , , , ,010.3 (66.6) (0.1%) 48, ,054.2 TOTAL NET EXPENDITURES 1,725.5 (1,419.7) 1.3 (1,742.0) 0.0 (1.3) (100.0%) APPROVED POSITIONS (13.0) (6.3%)

26 2011 Recommended Operating Budget by Service Gross Expenditure($000s) Fuel Operations $14, % Fleet Maintenance $27, % Fleet Management $5, % Fleet Safety & Standards $1, % Total $48,

27 2011 Recommended Service Change Summary Base Budget ($000s) 2011 Recommended Service Changes Net Incremental Impact Description % Change Position Gross Exp. Net Exp. over Change Budget # $ $ # $ # Pos $ # Pos Base Budget Changes: Annualization of fuel savings from Green vehicles (87.5) 0.0 Annualization of Eco-driving for fuel efficiency (140.0) 0.0 Annualization of savings from new fuel purchasing program (508.4) Reduce budgets for supplies, equipment, and services (97.0) (97.0) Sub-Total Base Budget Changes 0.0 (832.9) (97.0) 0.0% Service Efficiencies: Change in Fuel specification (170.6) (170.6) Rationalization of Fleet size (500.0) 0.0 Eliminate funding for two over-established position. (137.0) (137.0) Reduce budget for temporary/casual staff (202.0) (202.0) Delete one position in Fleet Safety unit (1.0) (104.5) (104.5) Re-engineer Parts Warehouse process (12.0) (391.4) (391.4) Sub-Total Service Changes (13.0) (1,505.5) (1,005.5) 0.0% Total Changes (13.0) (2,338.4) (1,102.5) 0.0%

28 2011 Recommended Service Changes Service Level Impacts 2011 Recommended Reduction Current Service Level Proposed Service Level Efficiencies Change in fuel specification In 2010, City has been purchasing B5 diesel. Change the concentration/mixtures of bio-diesel depending on the fuel prices. This may result in purchasing clear diesel in order to reduce costs of $170.6k. Rationalization of Fleet Eliminate funding for two overestablished positions N/A Two grandfathered Garage servicer positions resulting from harmonization have become vacant. This proposal to reduce funding for two overestablished position will not change the total approved positions in Fleet. Fleet will work closely with Transportation Services Division to reduce the size of their fleet inventory. Services can be provided by Auto Mechanic Apprentices instead. Reduce budget for temporary/casual staff N/A Reduce funding by $202k from $247k to $45k. Delete one position in Fleet Safety Unit A Fleet Safety & Eduction Consultant postion became vacant resulting from a recent retirement. This will reduce the total number of Fleet Safety & Education positions from eight to seven and result in meeting only 90% of client Divisions' requests for safety training from the current 98% service level. Re-engineer Parts Warehouse Process Key Points: No impact to service level. Currently, there are a total of 12 permanent positions (10 Automotive Equipment Inventory Clerks and 2 Truck Drivers) managing the vehicle parts warehouse, three of which are vacant. 28 This proposal calls for exploring the contracting out this function.

29 2011 New/Enhanced Services 2011 Recommended Net Incremental Impact Description Gross New Net Exp Exp. Position $ $ # $ # Pos $ # Pos Enhanced S ervices: (a) Enhanced S ervices - Council Approved (b) Enhanced S ervices - Program Initiated 0.0 Sub-Total Enhanced Services New Services: (a) New Services - Council Approved (b) New Services - Program Initiated Sub-Total New Services Total Enhanced/New Services

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32 2010 Key Accomplishments Green Fleet Plan Hydraulic launch assist and a natural gas powered garbage packers were put in service. Idle/Stop devices installed in pick-up trucks and cargo vans. Fuel Sites Closures/Upgrades Two fuel sites were upgraded with above ground fuel storage tanks. Replacement of Vehicles and Equipment It is projected that the 2010 Approved Capital Budget of $61.3 million will be 76% spent by year-end. 32

33 2011 Key Issues Replenishment of Corporate Vehicle & Equipment Reserve to fund Fuel Sites rehabilitation and Green Fleet Plan. Reduced funding by Divisions does not allow for timely replacements of vehicles, which will result in an increase in fleet maintenance costs. 33

34 Capital Plan by Project Category ($000s) Total $513,772 Service Improvement & Enhancement, $22,585, 4% Legislated, $4,555, 1% SOGR, $486,632, 95% 34

35 Capital Plan by Funding Source ($000s) 35

36 State of Good Repair Funding & Backlog ($000s) Key Points: The SOGR backlog is estimated to be $ million at end of Plan to reduce SOGR backlog by $3.0 million each year over the 10-year Capital Plan. 36

37 2011 Capital Budget by Project Category & Funding Source ($000s) 2011 Capital Budget by Category 2011 Capital Budget by Funding Source Legislated, $555, 1% Service Improvement, $1,860, 5% SOGR, $36,634, 94% Reserves, $39,049, 100% Total $39,049 37

38 Summary of Major Capital Initiatives For 2011 Replace vehicles utilized by various City Programs to deliver their services in accordance with life-cycle management Parks, Forestry & Recreation $5.8 million Solid Waste Management $9.3 million Transportation Services $3.2 million EMS $3.0 million Fire Services $7.5 million Toronto Water $3.6 million 38

39 Summary of Major Capital Initiatives Over the 10 Years Major vehicle and equipment replacement Fuel Site closures or upgrade projects to reduce infrastructure costs and minimize the risk of soil contamination Fleet Maintenance System upgrade and the Fleet Management and Fuel Systems integration to facilitate real time monitoring and data flow for better service delivery 39

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