AGENDA #12L
MEMORANDUM
TO: W. Calvin Horton, Town Manager
FROM: Bill Letteri, Public Works Director
SUBJECT: Target Cut List
DATE: April 27, 2005
In response to our task to
identify potential cuts totaling a target of $360,000, irrespective of cuts
already included in the report prepared by MAXIMUS, the following prioritized
list is presented in the order that we would suggest if cuts are necessary. As
noted, we have included possible fee changes as well as expenditure reductions
to reach the target.
While we have been asked to
prepare this reduction list in response to the discussion in the citizen budget
subcommittee’s report in which they identified the target of $360,000, we are
not advocating these changes. We are not certain of the methodology used by the
Subcommittee to establish the target and note that departmental budget requests
have been tightened over recent years in response to similar fiscal
constraints. We emphasize our belief that major departmental programs already
are under-funded, especially in such areas as paving/street reconstruction,
building maintenance and custodial services.
DISCUSSION
We offer the following for the
Council’s consideration.
- Contracted snow removal -
$8,000: During inclement weather events such as snow/ice storms, we
presently supplement in-house crews with private sector motor grader
and/or snow plow contract support. We included the cited amount in next
year’s budget request so that we could establish formal agreements with
local contractors to assure availability following significant snowfalls.
- Reduce funding for contracted
custodial services - $7,000: Examples include window and carpet cleaning,
floor waxing, etc.
- Replace side-loading refuse
collection services for respective commercial establishments - $67,300 ($50,000
cost reduction; $17,300 one-time net receipt from sale of assets). We
presently run a side-loading commercial route to service about 40
customers, with 70 containers. If we were to eliminate this collection
route, then those businesses would have to provide alternative means of
refuse collection, either through conversion to front load service,
contracting with private sector vendor(s), or use of downtown compactors.
This service change would result in a reduction of one equipment operator
position through attrition and elimination of two garbage trucks from the
fleet. One time net revenues of $17,300 would be realized from sale of
assets next year after remaining debt is paid off for one of the two
trucks.
- Eliminate payment of disposal
costs for refuse in private compactors in downtown - $32,000: We presently
pay tipping fee costs for refuse disposed in privately owned containers,
including AVEDA (formerly Michael Jordan’s), Big Frat roll-off, A Southern
Season and Meadowmont Apartments. While we do not collect such refuse, we
have been covering disposal costs associate with such refuse over the past
several years.
- Reduce seasonal leaf collection
service level - $40,000. We could reduce annual collection of loose leaves
at the street between mid-October and mid-March through shortening the
collection period (November 1st through mid-February) and reducing the
number of collection cycles (minimum of three). This service reduction
would include elimination of one construction worker position (through
attrition) from the Streets section of the Field Operations Division.
If we made this
change, then the number of cycles would reduce from 6 to 3. The reduction in
the season from 22 weeks to 15 weeks (a 32% reduction) would enable us to reduce
the total number of construction workers within the Streets section of our
Field Operations Division from 11 to 10. This reduction represents 9% of the
number of positions, which corresponds to a reduction of 1 FTE, or 52 weeks.
Another context
in which this reduction can be viewed relates to the dedication of FTE’s to the
service. Presently, we use an average of 3.6 FTE’s below the crew supervisor
level, but including temporary contract labor, related directly to this
service. This service cut would effectively reduce this commitment by about one
third, to 2.6 FTE’s, which translates into the equivalent of one full-time
position and a reduction of 7 of 22 weeks.
- Discontinue use of bio-diesel
fuel - $21,500: In our base budget next year we have included a unit cost
differential of $0.25 for bio-diesel fuel vs. diesel, applied to
approximately 86,000 gallons of fuel, for a differential of $21,500. Use
of this relatively more environmentally friendly measure is compatible
with overall town goals related to environmental protection. Relative to
more clean emissions, this reduction would be a service reduction.
- Eliminate one of the two
positions associated with sidewalk/Streetscape crew - $40,000: In fiscal
1998-99, the Council added a new 3-person construction crew to the Public
Works Department. This addition was intended to
enhance our ability to construct sidewalk, curb and gutter and Streetscape
improvements in-house at lower construction costs. In fiscal 1999-00, one
of these three positions was frozen, reducing the number of sidewalk or
other small projects that could be performed in-house while continuing to
complete selective Streetscape improvements.
It has been the
Council’s practice to authorize sidewalk projects that are constructed by both
contractors and our in-house crew. This practice enables us to utilize the
in-house crew to perform sidewalk projects, thus achieving cost savings, while
at the same time proceeding with larger projects that are more effectively
completed by a private contractor.
Maintaining the
one position would allow in-house cost efficiencies associated with annual
Streetscape improvements downtown and permit the construction program to
continue to perform small projects, such as installation of bus shelters, repairs
to deteriorated sections of sidewalk and curb/gutter, small demolition projects
and selective street reconstruction.
- Reduce annual street
reconstruction - $19,200: Our resource allocation for reconstruction of
selected streets throughout town has varied greatly over recent years. Our
annual funding level averaged $72,000 several years ago. In fiscal
1990-91 and immediate preceding years, our annual funding level was about
$125,000. Our base budget request next year includes an increase of
$18,000 (or half of the original current year funding level of $36,000), represents
about 75% of previous high annual funding levels. The amount of reduction
shown would eliminate more than all of this increase and is based on the
amount needed to reach our target budget impact of $360,000 for the
department overall. Such a cut would be significant in comparison to our
current estimated need for $227,000 of street reconstruction work.
- Discontinue traffic signal
maintenance along state roadways - $65,000 net budget impact. We presently
operate and maintain traffic signals on streets within the town and in
sections of Durham and Carrboro. Most of this service is provided along
state roadways, for which the town receives reimbursement from NCDOT
pursuant to established service agreements and payment schedules. The
estimated budget impact assumes that we would reduce staff and resources
associated with provision of such services, offset by loss of revenues to
cover such costs. Such saving would only be realized through staff
reductions both within Public Works and Engineering (i.e., position of
Traffic Operations Engineer).
The negative
impacts of this program reduction would include 1) significantly longer
response time to correct malfunctioning traffic signals; 2) need to use limited
police resources for traffic control pending arrival of NCDOT traffic signal
technician to diagnose and correct problems; 3) traffic flow delays and
decreased fuel efficiencies; and 4) potential adverse impacts on NCDOT funding
to upgrade the signal system with new technology to improve traffic operations.
This latter consequence could delay installation of fiber optic communications
in which the town has a significant interest. We would like to supplement the
state’s funding to upsize the cable in order to meet our communications
objectives.
- Institute an admission fee for
special events - $60,000 - $100,000: We believe that revenues totaling a
conservative amount of $60,000 could be realized through an admission fee
for the Halloween event. The challenge would be enforcement and
administration of collections. We believe that the cost of collection at shuttle
bus sites and other strategic entrance points to the Halloween event would
be less than revenues that could be collected.
Rather, resource
commitments are necessary during Halloween because of the need for
establishment and maintenance of public order and return of conditions of
cleanliness within downtown areas once the event ends. These public efforts
require considerable costs, both within our department and town-wide, and
efforts to recover at least a portion of these costs seem justified in our
opinion. The Public Works Department’s total direct costs related to Halloween
in 2004 approached the $60,000 discussed above.
SUMMARY OF ABOVE
Running
Item Amount
Total
Contracted snow removal
8,000
Contracted custodial services
7,000 15,000
Replacement of side-loading
garbage route 67,300 82,300
Payment of disposal costs for
private compactors 32,000 114,300
Reduction of seasonal leaf
collection 40,000
154,300
Bio-diesel
fuel savings
21,500 175,800
Reduction of
sidewalk construction crew 40,000
215,800
Reduction of
street reconstruction 19,200
235,000
Discontinue maintenance of
traffic signals on state roads 65,000 300,000
Admission fee for Halloween
events 60,000 360,000