CITY OF TORONTOFleet Services2011 Recommended Operating Budget &2011 –2020 Capital Plan

January 13, 2011

Agenda

1. Program Overview2. 2010 Service Performance 3. 2011 Recommended Operating Budget4. 2011Recommended Capital Budget and Plan5. 2010 Capital Performance 6. 2011 Key Issues7. 2011 Recommended Capital Budget

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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 removalSweepers for street cleaningTrucks to pick up garbage, repair potholes and fix water main breaksAerial trucks to maintain tree canopyTrucks and equipment to maintain parks and beachesVehicles for animal services and bylaw enforcementsBookmobiles 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 sites4

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.

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Key Strategic Directions

• Environmental StewardshipImplement the Green Fleet Plan 2008 – 2011

• Strategic Asset ManagementReduce the Number of City-Owned Fuel Sites, Vehicles and Equipment

• Leverage Information TechnologyIntegrate the Fleet Management System with the City’s fueling sites

• Service ExcellenceUpdate Service Level Agreements with Client DivisionsUndertake operational reviews to support continuous improvement.

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Program Opportunities & Challenges

• Delivering excellence in environmental stewardshipWe 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 demandsTo meet Clients' demand on service, Fleet has continually re-aligned maintenance operations at various Fleet locations.

• Human resource challengesFleet Services has an aging workforce.

• Age of assets and infrastructureDue to fiscal constraints, Divisions have reduced their annual reserve contributions for vehicle replacements.

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Program Opportunities & Challenges

• Negotiations with client DivisionsComplete 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 regulationsAny 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 systemsProvide real time data transmission between the two systems.

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Service Objectives

• To implement the Green Fleet Plan 2008-2011Provide 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 hoursReduce the average life of vehicles from 14 years to 8 years.Reduce unscheduled repairs from 51% to 48% of the total vehicle repairs by 2011.

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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 2011.

• 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.

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Program Map

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Fleet Services

Fleet Management

Fleet Acquisition

Fleet Maintenance

Fleet Disposal

Vehicle Safety

Fuel Management

Fuel Acquisition

Fuel Distribution

2010 Organizational Structure

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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)

Staffing Trend – Approved Positions 2003 - 2010

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Key Points: Key Points:

• 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

180.0

185.0

190.0

195.0

200.0

205.0

210.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 Rec

198.0

200.0

202.0

199.0

202.0

204.0

209.0

205.0

192.0

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%.

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Key Performance Metrics

• Efficiency MeasuresCost per On-road Vehicle ($)Cost per Off-road Equipment ($)

• Effectiveness MeasuresUnscheduled Maintenance Repair RateProvincial Commercial Vehicle Operators Registration (safety) Rating

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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.

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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.

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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.

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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.

2011 Key Issues

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• 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.

2011 Operating Budget Highlights

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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

2011 Operating Budget Highlights

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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

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2011 Recommended Operating Budget by Expenditure Category($000s)

2008 2009 2010 2010 2011Actual Actual Budget Projected Recommended 2012 2013

Actual Budget Outlook Outlook$ $ $ $ $ $ % $ $

Salaries and Benefits 17,504.7 17,514.5 18,862.0 18,324.4 18,062.0 (800.0) (4.2%) 17,917.2 17,948.6Materials and Supplies 26,399.3 22,961.4 23,284.8 21,888.8 22,715.0 (569.8) (2.4%) 22,686.5 22,686.5Equipment 131.0 86.2 117.4 119.4 94.5 (22.9) (19.5%) 94.5 94.5Services & Rents 7,046.0 8,657.8 5,358.9 7,975.4 6,627.3 1,268.4 23.7% 6,813.1 6,813.1Contributions to Capital 0.0 n/aContributions to Reserve/Res Funds 81.6 145.9 81.3 264.2 81.3 0.0 0.0% 81.3 81.3Other Expenditures (0.9) 0.0 0.0 0.0 n/aInterdivisional Charges 129.6 319.1 373.8 373.8 430.2 56.4 15.1% 430.2 430.2

0.0 n/a

TOTAL GROSS EXPENDITURES 51,291.3 49,684.9 48,078.2 48,946.0 48,010.3 (67.9) (0.1%) 48,022.8 48,054.2

Interdivisional Recoveries 48,676.6 50,201.8 47,353.7 49,787.4 47,211.5 (142.2) (0.3%) 47,224.0 47,255.4Provincial Subsidies 5.0Federal SubsidiesOther SubsidiesUser Fees & Donations 9.0Transfers from Capital Fund 148.5 185.9 4.9 173.6 121.4 116.5 2377.6% 121.4 121.4Contribution from Reserve FundsContribution from Reserve Sundry Revenues 731.7 716.9 718.3 722.0 677.4 (40.9) (5.7%) 677.4 677.4

TOTAL REVENUE 49,565.8 51,104.6 48,076.9 50,688.0 48,010.3 (66.6) (0.1%) 48,022.8 48,054.2

TOTAL NET EXPENDITURES 1,725.5 (1,419.7) 1.3 (1,742.0) 0.0 (1.3) (100.0%) 0.0 0.0

APPROVED POSITIONS 205.0 195.0 205.0 190.0 192.0 (13.0) (6.3%) 192.0 192.0

Budget

2011 Change from2010 Approved

2011 Recommended Operating Budget by Service – Gross Expenditure($000s)

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Fleet Maintenance$27,188.7

56.6%

Fuel Operations$14,116.7

29.4%

Fleet Safety & Standards$1,327.1

2.8%Fleet Management

$5,377.8 11.2%

Total $48,010.3

2011 Recommended Service Change Summary – Base Budget ($000s)

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Position Change

Gross Exp. Net Exp.% Change over 2010

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% 0.0 0.0 0.0 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% 0.0 0.0 0.0 0.0

Total Changes (13.0) (2,338.4) (1,102.5) 0.0% 0.0 0.0 0.0 0.0

Description

2011 Recommended Service Changes Net Incremental Impact

2012 2013

2011 Recommended Service Changes – Service Level Impacts

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Key Points:

• No impact to service level.

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 N/AFleet will work closely with Transportation Services Division to reduce the size of their fleet inventory.

Eliminate funding for two overestablished positions

Two grandfathered Garage servicer positions resulting from harmonization have become vacant. This proposal to reduce funding for two over-established position will not change the total approved positions in Fleet.

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 UnitA 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

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.

This proposal calls for exploring the contracting out this function.

2011 New/Enhanced Services

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Gross Exp.

Net Exp.New

Position$ $ # $ # Pos $ # Pos

Enhanced Services:(a) Enhanced Services - Council Approved

(b) Enhanced Services - Program Initiated 0.0

Sub-Total Enhanced Services 0.0 0.0 0.0 0.0 0.0 0.0 0.0

New Services:(a) New Services - Council Approved

(b) New Services - Program Initiated

Sub-Total New Services 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total Enhanced/New Services 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Description

2011 Recommended Net Incremental Impact

2012 2013

2010 Key Accomplishments

Green Fleet PlanHydraulic 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/UpgradesTwo fuel sites were upgraded with above ground fuel storage tanks.

Replacement of Vehicles and EquipmentIt is projected that the 2010 Approved Capital Budget of $61.3 million will be 76% spent by year-end.

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2011 Key Issues

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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.

2011-2020 Capital Plan by Project Category ($000s)

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SOGR, $486,632, 95%

Service Improvement & Enhancement,

$22,585, 4%Legislated, $4,555,

1%

Total $513,772

2011-2020 Capital Plan by Funding Source ($000s)

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Key Points:• The SOGR backlog is estimated to be $27.709 million at end of 2010.• Plan to reduce SOGR backlog by $3.0 million each year over the 10-year

Capital Plan.

State of Good Repair Funding & Backlog ($000s)

2011 Capital Budget by Project Category & Funding Source ($000s)

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SOGR, $36,634 ,

94%

Legislated, $555 , 1%

Service Improvement, $1,860 , 5%

2011 Capital Budget by Category

Reserves, $39,049 ,

100%

2011 Capital Budget by Funding Source

Total $39,049

Summary of Major Capital Initiatives

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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

Summary of Major Capital Initiatives

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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

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