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POLICY PROPOSAL
DATE FILE NUMBER SUBJECT PAGE_OF_
8/27/85 C.P. 120 CONTRACTIadmef ..NG STREET MAINTENANCE:
PROPOSAL PROPClRAN LANCASTER AGE N VIEMI,
AND COUNCILMAN WILLI MS
PROPOSAL
Tf—TS proposed that the City of Fort Worth allocate half of the funds budgeted
for street maintenance in the Street Division FY85-86 budget for contracted
street services. These contracted services are to be scattered throughout the
City with extensive, comparative records kept as to the cost and quality of work
done by City forces and contractors. A comparison of the contract services
versus the work completed by City forces would be reviewed and evaluated at the
end of one year.
CITY MANAGER COMMENTS:
The idea of con rac ing for goods and services is one that City staff strongly
supports. In the year May 31, 1984 - June 1, 1985, the Transportation and Public
Works Department, Construction Engineering Division inspected $5,698,615 on con-
tracts for street reconstruction and $917,098 for utility cut repair contracts,
as well as $40,808,416 for new street construction, and $10,183,982 for other
... projects.
1985-86 Street Division Budget APPROVED BY
By Work Work FunctionA
STREET MAINTENANCE: 1985
Major Maintenance $1,378,922 9Y�,
Intermediate Maintenance 1,446,461-=—
Omi
Minor Maintenance 2,479,27.bity som.taly f th.
Seal Coat-City Forces 846,34Pityof red xwk ai
Seal Coat-Contract 1,000,000
Overlay-Contract 500,000
Sub-Total $7,651,001
OTHER ACTIVITIES:
UtiTT y u Repair $1,396,333
Drainage Maintenance 768,626
Alley Maintenance 117,450
Safety/Emergency 844,580
Environmental Control 293,315
Weed Abatement-Contract 50,000
Leaves and Absences 483,379
Material Handling 389,303
Overhead 175,108
LEGALITY [N Engr., Admin., Other 823,515
FISCAL NOTE 13 Sub-Total $5,341,609
CITY MANAGER'S COMMENTS M TOTAL $12,992,610
POLICY PROPOSAL (cont'd) PAGE_OF
,1101.
As can be seen from the table above, one-half of the street maintenance budget
would be $3,825,500. The recommended Street Division budget includes $1,000,000
for sealcoat contract(s) and $500,000 for overlay contract(s) . That would leave
$2,325,500 that would also have to be contracted. Although the $50,000 budgeted
for weed abatement is not street maintenance, it is a new contract in the Street
Division.
Currently, the only direct comparison of force account versus contract cost
available concerning streets is in the area of utility cut repair. Even though
utility cut repair is not considered street maintenance, the comparison appears
to be useful . In the period May 31, 1984 - June 1, 1985, six (6) utility cut
repair contracts were let through Construction Engineering. The amount of con-
tract work during this period was unusually large due to the large number of
water breaks that occurred during the winter of 1983-84 and the unusually large
number of breaks that continued through most of 1984. The cost per square yard
for those contracts ranged from $26.69 to $48.60. Contractors were paid $917,098
for 24,051 square yards for an average cost per square yard of $38.13. City
forces, in the same period of time, repaired 74,390 square yards for
$1,169,330. The average cost for city forces to do the utility cut repairs was
$15.72 per square yard. Contractors were required to use a concrete base with a
two (2) inch asphalt overlay. City forces were not required to use the concrete
base. Street Division records show that the contractor's repairs have had a
somewhat better record of performance. At the end of one year, only 8% of the
contractor's repairs had failed while 12% of the city's repairs had failed.
Contractors are responsible for repairing, without additional charge, any
failures occurring within a year. Street forces are responsible for repairing
their failures and any contractor's failures after the one year period. Even
with the 12% failure rate and the costs of making additional repairs City forces
were able to perform utility cut repairs at a lower cost.
Contractors can frequently provide equal or lower costs in delivering on large
projects such as sealcoating, hot mix overlay, and street reconstruction. As
noted above, the FY85-86 Street Maintenance budget includes $1,000,000 for con-
tract sealcoat and $846,341 for City Forces sealcoat. By establishing similar
work methods and specifications for both the city work and the contract work, a
useful comparison of the cost of similar services can be obtained.
An important consideration in a proposal of this magnitude is the current
employees of the Street Division. The authorized staff level is 256 employees.
Were the budget altered as suggested in this proposal, Street Division would
have to lay off an estimated 60-75 employees by October 1 of this year (just 35
days from now). The Street Division organizational structure would require
extensive reworking to accommodate these changes. In order to implement this
proposal by October 1, street management would have to analyze the entire work
force to determine which personnel would be laid off and how the lay offs would
be accomplished. Standards for the work and specifications for the contracts
must be created. Priorities must be set on equipment and adjustments made in
materials contracts. Decisions must be made on the work functions which can be
contracted and those which should not be contracted. Delays beyond October 1
would only aggravate the problem. If, for instance, the changes were not im-
plemented until April 1, all street maintenance activities by city forces would
CITY OF FORT WORTH
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POLICY PROPOSAL (cont'd) PAGE-3-OF :1
cease on that date. Since one-half of the budget would have already been spent,
contractors would have to provide all street maintenance functions for the last
half of the year to meet the spending goal . This is a very tight time frame for
implementing such a significant program redirection.
CITY MANAGER'S RECOMMENDATIONS
It is recommended that the City Council :
1. Direct the staff to develop and use standards and specifications for
contracted street maintenance and repair comparable to Street Division work
methods so that a realistic comparison can be made of contractor and city
forces costs and results;
2. Direct the staff to develop a detailed comparison of the contractor's and
the City's sealcoat operations ando is 'n FY - 86;
3. Direct the staff to arrange for of alpha t utility cuts (in areas
throughout the City) to be repaired by private contract in FY85-86; and,
4. Direct the staff to provide alternative decision packages for contracting
various levels of street maintenance and repair for possible implementation
in the FY86-87 Budget.
Opt" FISCAL NOTE:
This proposal will not change total financing. It will, however, change specific
expenditures.
LEGALITY:
The City Attorney has reviewed the proposed policy and there are no known legal
impediments that would prohibit or limit the implementation of such a policy.
CITY OF FORT WORTH