Public Works in Gardiner
(from Maine Townsman, September 1997)
By James Damicis, Planning Decisions, Inc.
The May 1997 issue of the MAINE TOWNSMAN describes how "benchmarking" can be used to evaluate and improve local government services. Benchmarking, according to the article, is "the process whereby an organizations performance is measured against the performance of other organizations." It has long been used in the private sector as a way to upgrade performance.
In the public sector, particularly within municipal government, day-to-day pressures and demands too often preclude managers from creating and using such tools. This past year the City of Gardiner decided to take a hard look at public works. They hired our firm to help. This article describes how the City of Gardiner and Planning Decisions used benchmarking and other tools to evaluate public works programs and identify savings.
Gardiners full-value tax rate had increased from 18.50 mills in 1993 to 23.19 mills in 1997, or 25% in five years. As a result, Gardiner found itself with the second highest full value (using state valuation) property tax rate of any Maine community in its population range (5,000 to 7,500) - and well over the group average of 17.07 mills.
As would happen anywhere, the high tax rate led Gardiner businesses and citizens to call for cutbacks in local government. This in turn created the political momentum for Gardiner officials to identify spending targets and to examine all municipal services with a fine-toothed comb as part of the budget process for FY 97-98.
How Gardiner Responded for Public Works Services
The concern of Gardiner officials about public works was twofold. First, the citys infrastructure was in desperate need of increased maintenance, upgrading and expansion. And second, at the same time, the existing public works operation seemed expensive, and it did not appear that the city was taking advantage of cost-saving opportunities, such as the contracting out of particular services.
Until the second concern was addressed, the first could not be addressed either, because Gardiner could not afford to pay more for infrastructure unless there was assurance that the money was being spent efficiently. Therefore the city hired an outside consultant (Planning Decisions) to gather the needed information, conduct an evaluation, and submit recommendations.
Our evaluation consisted of three steps: profiling current services, identifying potential cost savings through interviews, and using benchmarks to compare Gardiner to other similar communities. Each of these steps is explained below.
Step 1 - Profile of Public Works Service Delivery
To make any sort of comparisons or benchmarks, the first thing necessary is a complete statistical description of the activity. In the case of a complex service area such as public works, this becomes a collection of "program budgets," a summary of personnel, equipment, materials, time, and cost for each of the major activities including winter maintenance, summer maintenance, street sweeping, roadside maintenance, sidewalks, and so forth.
In putting such a profile together, we found that the city in most instances had the information readily in hand, but that it had never been put together in a comprehensive format that was usable by persons outside of the public works department. The profile provided the information base around which dialogue could begin. We as consultants could use it to discuss potential savings with city officials or local contractors, and also to make benchmarking comparisons to other cities or the private sector. And the Gardiner City Council could use it to carry on more informed discussions, and make clearer choices.
Step 2 - Identification of Potential Cost Savings Through Interviews
With the profile in hand we went out and conducted interviews. We talked to the public works director, city manager, sewer department superintendent, water district superintendent, and private contractors, among others, about their experience, observations, and ideas about public works.
We also spoke with public works professionals in other communities regarding "best practices" for the delivery of public works services, what was working, what wasnt, and how they decided about contracting out versus delivering services in-house. We were helped in all of this by the wisdom of George Flaherty, former public works director for the City of Portland, who was a member of our consulting team.
Step 3 - Benchmarks to Compare Gardiner to Other Communities
To supplement the profiles and interviews, we prepared several benchmarks to compare public works service delivery in Gardiner to other similar communities. They are described below.
Full Value Tax Rate. We continually heard that property taxes in Gardiner were too high. Was this supported by the facts? We examined the full value property tax rates of all communities in Maine with populations between 5,000 and 7,500. The data confirmed the problem. Other communities can make similar comparisons by obtaining full value tax rate annual data from the Maine Bureau of Taxation and the Maine Municipal Association.
Staffing Levels for Public Works. Gardiner had 10 full-time public works employees. Was this out of line? We consulted the Maine Municial Associations Annual Salary Survey for communities in Gardiners population category. It included public works staffing level data for 12 other communities of Gardiners general population size. We adjusted the data to exclude personnel involved in solid waste, wastewater, and water services, since these were not included in Gardiners public works budget.
We found that Gardiners level of 10 full-time employees was slightly higher than the group average of 8.4 employees. Although this was not a significant difference, Gardiner could not be considered understaffed if it left a current full-time position vacant. Additionally, the data suggested that the city might take a closer look at possibilities for contracting out and hiring seasonal employees to address fluctuations in work demand and special one-time projects.
Total Expenditures for Public Works. Gardiner spent $84 per citizen for its public works program. Was this high? We consulted the Maine Municial Associations Annual Fiscal Survey and constructed a reference group of 13 comparable communities. Once again, we adjusted the data to exclude expenditures for solid waste, wastewater, and water services.
It turned out that Gardiners $84 average was higher than the reference group average of $74 per capita. Looking at the same data in another way, Gardiner was spending $12,979 of public works dollars for every mile of road in the community, well over the reference average of $7,982 per road mile. This finding led us to examine winter maintenance alternatives in greater detail.
Winter Maintenance. Gardiner was spending $4,775 per mile for winter road maintenance. For this category there was no comparable data available from any other public source. Therefore, we identified three reference communities of comparable size and gathered the data directly from officials in those towns.
It turned out that Gardiners expenditure was higher per road mile than any of the other three communities. Two of these communities contracted out for some winter road maintenance services. Their per-road expenditures were lower than Gardiners, and also lower than the third reference community which did winter maintenance in-house.
Findings & Results
As a result of the profile, interview, and benchmarks, Planning Decisions made a variety of findings and recommendations. The major finding was that the city lacked a clear and consistent mission for its public works department. Specifically, there were different understandings among councilors and employees regarding how resources should be allocated for routine maintenance and for special projects such as capital improvements.
Along a similar line, there was disagreement about which tasks should be performed in house versus which should be contracted out.
As a result of the study, the City of Gardiner clarified the "core mission" of the public works department as the provision of routine maintenance. Adjustments made by the city to reflect the new core mission included leaving two positions vacant and eliminating a part-time position; utilizing private contractors for all major capital projects, services requiring special equipment, or skills, and meeting unexpected fluctuations in workload; and reducing in-house equipment levels. At the same time the city now has the confidence to fund its capital improvements program for the first time in a number of years.
A win/win solution
The result of this project is that Gardiner is now maintaining its infrastructure, it is paying less to do so, and it has the objective database to monitor progress and evaluate performance. This is a model which can be used to improve any municipal service area.