DATE: November 16, 2015 REPORT NO. PW TYPE OF REPORT CONSENT ITEM [ ] ITEM FOR CONSIDERATION [ X ] 2.0 TOPIC

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1 PUBLIC WORKS COMMISSION DATE: November 16, 2015 REPORT NO. PW TO: FROM: Mayor and Members City Council E. (Beth) Goodger, General Manager Public Works Commission 1.0 TYPE OF REPORT CONSENT ITEM [ ] ITEM FOR CONSIDERATION [ X ] 2.0 TOPIC Out-Sourcing of CCTV Inspection Program [Financial Impact Wastewater Operating Budget] (PW ) 3.0 RECOMMENDATION A. THAT the General Manager of Public Works BE DIRECTED to undertake a procurement process to acquire a contractor to perform the Closed Circuit Television (CCTV) Inspection Program; and B. THAT the General Manager of Public Works BE DIRECTED to prepare a report on the awarding of the contract resulting from Recommendation A to Committee of the Whole and Council; and C. THAT staff BE DIRECTED to include the unmet needs for the Wastewater and Storm Sewer Inspection Program in the amount of $227,883 as part of the 2016 Budget Process. 4.0 PURPOSE This report is coming directly to Council to meet deadlines for the 2016 Budget process. The purpose of this report is to seek Council approval to make improvements to the City s preventative maintenance program (PM) for the City s wastewater and storm sewer infrastructure. This program consists of visual condition inspections using a Closed Circuit Television (CCTV) camera, manhole inspections and sewer cleaning. The CCTV camera and equipment has reached the end of its useful life and requires replacement. Staff undertook a review of the preventative maintenance requirements and completed a business case to determine the most cost-effective

2 Date: November 16, 2015 Page 2 and efficient way to perform these activities. The required service levels are best met at this time by acquiring a specialized contractor to perform the Closed Circuit Television (CCTV) Inspection Program and utilizing existing staff to focus on critical maintenance activities. The report seeks approval to proceed with a procurement process for the CCTV inspections and refer the unmet preventative maintenance activities of the City s wastewater and storm water system to the 2016 Budget Process. 5.0 BACKGROUND 5.1 CCTV Inspection Program and Equipment The CCTV Inspection Program is an ongoing maintenance and inspection activity performed by the Water Distribution and Wastewater Collection division. Every year, a target of 90 km of sewer and storm water main is inspected using CCTV equipment. The resulting data is used for maintenance and establishing replacement and rehabilitation needs of the wastewater and storm water infrastructure. CCTV inspection uses a track mounted camera which is remotely operated from the surface. The data generated includes full video of mains and structural defect coding of the observations and conditions. CCTV inspection is utilized by generally all municipalities with sanitary and storm sewers. The inspections can either be performed in-house using City-owned equipment, or by contracted services. In the case of Brantford, the City owns the equipment and utilizes in-house staff to complete the inspections. In addition to the actual equipment, CCTV inspections must be completed by trained competent staff. Staff operating the equipment are trained in CCTV defect coding using industry standard methodologies and practices. This training ensures consistency and accuracy. The resulting data is then transferred into a computer program where the data is further analyzed by staff within the department. Like all equipment, the CCTV inspection unit has a service life which is approximately 5-7 years. The City s CCTV camera equipment has reached the end of its useful life resulting in numerous breakdowns and costly repairs. The camera equipment requires replacement at an estimated cost of $100, Target Level of Service for CCTV Inspection The City maintains 425 km of wastewater mains and 390 km of storm mains. Based on staff experience with the City s collection system, and considering the industry best practices for inspecting and assessing a collection system, about 10% of City s system needs to be assessed each year. This equates to an inspection of a main segment once every 10 years. As infrastructure ages, more frequent inspections are recommended as the risk of failures within the mains increases.

3 Date: November 16, 2015 Page Status of City Operated CCTV Inspection Program The in-house CCTV Inspection Program began in Brantford in 2008 with the purchase of a CCTV inspection unit. The City set a target to inspect 10% of the wastewater and storm mains per year. The 90 km target was achieved on a regular basis until Frequent equipment failures over the past two years resulted in significant equipment downtime and not meeting the target. As a result of the downtime, 60 km, 19 km and 17.5 km of mains was inspected in 2013, 2014 and 2015 respectively. An assessment of the equipment in terms of productivity and viability to continue CCTV Inspections was conducted. The replacement cost for the CCTV camera system, excluding the vehicle, is approximately $100,000 and has a life expectancy of 5-7 years. The existing vehicle has a residual life of 6 years. 6.0 CORPORATE POLICY CONTEXT Out-sourcing of the CCTV inspection to perform appropriate PM of wastewater and storm systems supports the City s goal of Managed Growth and Environmental Leadership and the long-term desired outcome of Brantford will be supported by well-developed and maintained transportation and servicing infrastructure. 7.0 INPUT FROM OTHER SOURCES Comments from Finance, Human Resources, the Clerks Department, Facilities and Asset Management and Fleet Departments have been addressed in this report. 8.0 ANALYSIS 8.1 Cost-Benefit Analysis of In-House Service vs Contracted Service The majority of Canadian municipalities are out-sourcing CCTV inspections. The cost for out-sourced inspection has become much more competitive compared to when the City began in-house CCTV inspection in In consideration of industry capabilities for CCTV inspection services, staff completed a cost-benefit analysis by comparing the costs of in-house service against contracted service. The in-house service cost includes labour, benefits, overtime for after-hours emergency response, overhead charge, software upgrades, vehicle maintenance, and camera maintenance. The contracted service includes cost for CCTV inspection, cost for emergency response and cost for in-house staff coordination. The analysis shows that there is almost no difference in cost between performing the CCTV inspection using in-house staff and out-sourcing. However, the unit cost for in-house service will be higher if 90 km of inspections are not completed due to equipment downtime, staff availability or vehicle failure. In the case of out-sourcing, the unit cost remains fixed regardless of the length of inspection completed as the City would pay contractors based on the amount of inspection completed. In the case of in-house service, excluding labor costs, the remaining costs are fixed regardless of the length of main inspected.

4 Date: November 16, 2015 Page 4 The advantage of using an external contractor is that they have back-up equipment and vehicles to ensure that the annual targets are met. Inspection contractors specialize in CCTV inspection and stay current with new technology and certification training. Further, contractors take on the risk of equipment failure or even loss within the system. An additional benefit is that the external contractor would be able to deploy additional resources in a timely manner for inspections during emergency and severe weather conditions. If approved by Council, the CCTV inspection program can be out-sourced beginning in April The CCTV vehicle has a residual value of approximately $25,000. The revenue from the sale is recommended to be allocated for the purchase of a utility vehicle ($25,000) for the maintenance of storm systems. 8.2 Preventive Maintenance (PM) of Wastewater and Storm Sewer Systems As part of the review of the CCTV Program, staff also reviewed service levels for the other PM activities of the wastewater and storm sewer systems. The City is conducting storm sewer cleaning and manhole inspections much below the target level of service. Table 1 shows the current level of service, target level of service (based on industry practice) and FTE requirement for each activity. The analysis shows that there is a need for 2 FTE positions to proactively perform the necessary PM of the storm system as a part of due diligence and to protect the residents from undue hardship and the City from risk of liability in case of flooding. As mentioned previously, although the CCTV inspection activities were meeting approximately 20% of the target over the past 2 years, staff has been fully utilized in other priority areas. These unplanned/reactive maintenance activities completed by CCTV staff include relieving sewer blockages, manhole inspections, storm main cleaning and addressing frozen water services. If Council approves out-sourcing of CCTV inspections, the 2 FTE positions currently performing CCTV inspection would be fully assigned to wastewater and storm manhole inspections and storm main cleaning. The staff members affected have the required qualifications and training to perform these activities. Please note that 0.1 FTE is required to manage the CCTV contract when it is out-sourced and there is a total requirement of 2.16 FTE. Staff will accommodate the management and oversight requirements of the CCTV program within the existing 2 FTE. Overall, this will result in a zero (0) net increase in FTEs and will allow the City to perform essential maintenance activities.

5 Date: November 16, 2015 Page 5 Table 1: Staffing Need for Maintenance of Wastewater and Storm System Activity / Task Current Level of Service Target Level of Service Proposed Staffing Level to Meet Target (FTE) Wastewater Manhole inspections (4,772 manholes to be inspected in 5-year cycle) 0% 20% 0.23 Storm Manhole inspections (5,428 manholes to be inspected in 5-year cycle) 0% 20% 0.23 Storm Sewer Cleaning (390 km of Sewers to be cleaned in 7-year cycle) 2% 15% 1.6 CCTV contract management 0% 100% 0.1 Total FTE 2.16 It must be noted that the tasks above are essential and need to be completed by wastewater operations staff regardless of the CCTV out-sourcing decision. The current utilization and availability of staff has been reviewed and there is not adequate capacity within the department to complete these activities. In addition to the costs in Table 1, planned maintenance can be calculated to show the time spent and costs associated with the work. Given a lack of capacity within the department, out-sourcing of this work would be required. The total estimated value of the planned work if it were contracted out would be $185,000 per year. 8.3 Implications of Not Continuing Preventative Maintenance Activities Storm sewer cleaning and manhole inspections are not currently being performed to the industry standard level. Storm sewers are cleaned on a reactive basis when a problem is found or reported. At the current level of service, the City is vulnerable to increased flooding and related claims and perhaps even accelerated asset failures. There is an unmet need for 2 FTEs to perform necessary preventative maintenance work of the storm system as a part of due diligence and to help protect the City from undue hardship and liability in case of flooding. 9.0 FINANCIAL IMPLICATIONS The recommended changes will have no impact on the 2016 Water and Wastewater Rate and can be accommodated by reducing the budgeted transfer to the Wastewater Treatment Reserve from $8.678 million to $8.450 million. The impact to the 2016 Wastewater Operating budget is outlined in Table 2 and will be put forward as an unmet need as part of the 2016 Budget process. Subject to Council approval of this report, the cost for the CCTV inspection service will

6 Date: November 16, 2015 Page 6 be confirmed through a tender process seeking qualified and competent service providers. The CCTV inspection costs will be offset by reduced fleet and camera maintenance and replacement costs ($56,167) and a reduction in certification costs for staff training ($1,000). The CCTV vehicle has a residual value of approximately $25,000. The revenue from the sale of the vehicle is recommended to be allocated for the purchase a utility vehicle ($25,000) for the maintenance of storm systems. The annual fleet budget contribution for maintenance and replacement of the utility vehicle will be $8,000 per year and this expense would also be added to the 2016 operating budget. Table 2: Impact on 2016 Wastewater Operating Budget Description Annual Cost Estimated Annual cost of CCTV contract $277,000 Annual fleet budget for maintenance and replacement of vehicle and camera ($56,167) Annual training costs for Certification ($ 1,000) Resale value of CCTV vehicle ($25,000) Purchase of a new vehicle for storm maintenance $25,000 Annual fleet budget for the new vehicle $8,000 Net increase to annual Wastewater operating expenses $227,833 Wastewater Reserve Contribution Reduction ($227,833) Net impact on 2016 Wastewater Operating Budget $ CONCLUSION This report outlines the need to out-source CCTV inspection of wastewater and storm water systems and proposed assignment of staff to perform necessary preventative maintenance of the stormwater system. An assessment of the maintenance activities shows that the out-sourcing of the CCTV program would be more cost-effective and enable the City to consistently meet the inspection targets, while allowing the 2 FTEs currently assigned to CCTV inspection to perform critical maintenance activities. This initiative would provide the level of service to protect residents from undue hardship and reduce the risk of liability due to flooding given the frequent occurrence of severe weather conditions.

7 Date: November 16, 2015 Page 7 Selvi Kongara, MS, P.Eng. Director, Environmental Services E. (Beth) Goodger General Manager Public Works Commission In adopting this report, is a by-law or agreement required? If so, it should be referenced in the recommendation section. By-law required [ ] yes [ X ] no Agreement(s) or other documents to be signed by Mayor and/or City Clerk [ ] yes [ X ] no Is the necessary by-law or agreement being sent concurrently to Council? [ ] yes [ X ] no