What's the Problem?

In a nutshell... government is running out of money! From the federal government to the smallest city or village, government is caught in a revenue-squeeze that is impacting on its ability to provide basic services. Planners are searching for cost-effective ways to "do more with less". Unless government adopts new policies and procedures, it will become more and more difficult to provide the same level of service with fewer dollars.

Government is caught between "a rock and a hard place". The taxpayer has spoken: "NO NEW TAXES"! Budgets are tight and the budget pressure isn't expected to ease in the foreseeable future. But, despite the taxpayer stand against new taxes, the taxpayer still demands the same level of service. There's the pinch!

Costs of operations are increasing. So is the workload. Government is expected to maintain the same level of service, despite the fact that it costs more for labor, equipment and inventory. But that’s only half the problem. Thanks to federal/state mandates and growing communities, the workload has also increased. For example, ADA (Americans with Disabilities Act) requires cities provide handicapped access at all intersections. But, the federal government didn't pay for these needed improvements. The city has to meet ADA requirements and still stay within budget.

This study focuses on public works and street departments. These departments are typically the second-highest budget item and represent over 25% of the city or county's total budget. The average size city which participated in the survey was 22,000, with the majority of the cities, towns, township populations being under 15,000. These smaller government organizations are especially hard-hit because they lack the revenue-generating capacity of federal and state governments. They have a limited tax base, where revenues typically come from taxes and fees; sales tax, property tax and occasionally, income tax.

With the general down-turn of the economy, increased lay-offs through corporate "down-sizing" and increased farm and small business failures, many of these communities face higher unemployment and a revenue loss that is reaching devastating proportions. Not only is the tax base shrinking, the demand for services (especially social services) is expanding.

Why Public Works and Street Departments?

Of any department in local government, the public works and street department is unique. It provides a myriad of services; ranging from picking up the garbage to maintaining streets. It also has the largest concentration of equipment and capital assets, as well as the largest inventories of consumable inventories and repair parts.

Despite its diverse role and significant need for management tools, these departments have typically been the last department to automate operations and, according to this and other studies, usually lack essential computer resources to improve efficiency and cost-effectiveness.

The Focus

This study focuses on productivity and cost-control issues. Since these departments represent a major portion of the overall budget, any improvement in operations should have an immediate and direct impact on the "bottom-line".

Three major areas were considered in the study:

• Department and employee efficiency
• Project, equipment, repair parts and inventory management
• Improving cost-effectiveness.

This report was developed using survey responses from across the country. The survey attempted to achieve as broad a sampling as possible to account for locality differences.

This report is divided into four main sections:

• A discussion of the problem.
• Survey statistics.
• Analysis of survey findings.
• Action plan to improve operations.

A Discussion

When it comes to street department operations, city officials from across the nation focused on budget cuts, increased costs of operations and increased workloads as the three most significant issues they face.

It's an on-going problem. For years, cities have struggled against these growing problems. It's becoming more and more difficult to keep up when expenses exceed available resources, when increased demand for services stretches the department's ability to respond. Roads and the general infrastructure are deteriorating. A 1991 survey of issues and trends observed city and county officials found streets and bridges and needing the most capital expenditures and in greatest need of repair. While 56% regarded street repairs as serious or very serious, 40% reduced maintenance due to lack of funding.

Additionally, while cities act to provide the same level of services to a growing comminity, it is becoming more difficult to maintain the existing system. One superintendent commented, "We cannot maintain the existing aged infrastructure properly because we are too busy installing new work."

This is a national problem and the U.S. Congress addressed the issue in 1991 when it passed a $151 billion Transportation Bill designed to rebuild America's infrastructure and improve management control in the various street and highway departments. America's mayors have also spoken out on the issue. During the United States Conference of Mayors in 1992, mayors from cities, large and small, identified over 7,000 public works projects in 506 cities that carried a price tag of almost $26 billion.

But, despite this emphasis, the reality is that small communities lack funds to accomplish major public works projects. They are struggling to maintain essential services in an ever-shrinking budget environment.

A public works operations director pointed out, "Budget constraints force us to prioritize work, evaluate the cost/benefit of services, and improve our personnel management procedures".

Yet, most cities agree they lack a comprehensive plan or strategy to solve these problems. Virtually all cities thought a specialized system would improve operations and efficiency. The consensus was that procedures must be established to streamline scheduling and operations, promote efficient use of personnel and equipment, and improve cost control.

Many communities have turned to computers and computer technology to provide the answer, but have failed to reach objectives because "off-the-shelf" software may provide certain management tools, but the software doesn't address the specific needs of the street department. This approach has developed into a "patchwork" effect of software solutions for the department with several separately-operating software programs each performing part of the tasks, but failing to provide total integration as a management tool.

A specialized "Technology Tool" didn't exist for small rural communities when the survey was conducted. Today, CitiTech Management Software from CitiTech Systems has provided that tool. American City and County magazine reported in 1990 that cities turning to automation haven't always been successful. Most canned software was difficult to learn and use because they were developed for larger cities. Those smaller cities which have written their own applications or hired consultants to develop them have found they fail to address the "total problem".

Likewise, another survey of city and county officials found that over 50% of the respondents had automated the financial and budgeting operations of their community, but less than 20% had automated any portion of their public works departments. The emphasis was on "accounting", not "operations".

Because cities operate with public monies, the emphasis is obviously on accounting reports which show how funds were spent. But, accounting, by its nature, is historical. It reports the past, but fails to look to the future. Effective management requires "forward-looking" programs that are more than just budgeting. What are we doing now and what can we do to improve? Effective management requires city officials and planners to ask "Are we doing the right things?"

The problem is that city street departments can't effectively manage their people, equipment, inventories, projects and other items without adequate tools. Manual systems fail to achieve information management and are primarily paper "record keeping" processes where it is difficult or impossible to analyze data and effect positive improvements.

If government hopes to improve the cost effectiveness of its operations, it must focus on methods that evaluate cost/benefit factors, improve productivity, eliminate waste and promote innovation.

It's been said that innovation drives the engine of success and innovation is a "bottoms-up" effort. For example, in designing a rocket, we light the rocket from the bottom, not the top. Similarly, innovation also occurs at the bottom. The people responsible for making things work are best prepared to offer innovative solutions that can improve productivity and operations.

The first step in developing a plan or strategy to solve the problems facing city governments today is "attitude". A street superintendent from Olympia, WA, said it best when he observed, "If we think we can always improve and try to operate in that mode, we can improve our efficiency and productivity. If something needs to be changed or the process revised to increase productivity, we change. We must promote innovation, even at the risk of failure".

The problem facing city government is not insurmountable, nor is it overly difficult. Solving today's problems are opportunities for the future which result in better service at less cost.

An Overview

If productivity, efficiency and information management are real objectives, this study reveals that much needs to be done. While most of the survey participants indicated they either used computers or had computer assets available, a significant proportion reported that their management systems were primarily manual or hand-processed. This indicates that department operations were not being properly managed, but rather "reported". Manual systems fail to provide management oversight because the volume of data is either difficult or impossible to analyze on an on-going basis. For example:

The study reveals that only 31% of the departments track employee productivity. Similarly, only 45% track equipment costs, and only 26% maintain an inventory or material control system. Of this group, over 50% track productivity, equipment and inventory by hand, although most have computers available. They simply lack specialized software needed to accomplish these tasks.

Departments were more effective in project management, however. Almost 70% track project costs, 83% schedule projects in advance, 83% budget individual projects, and 52% allocate project costs. As with employee, equipment and inventory management, nearly 75% of the departments that do track project management, use manual systems that simply record information... and don't help analyze it.

A common thread developed from survey results. Department heads are very aware of the situation they face and are acting to solve the problem. Many turned to computers, but discovered a computer system doesn't solve the problem if it fails to address the specific issues facing the department. In an effort to improve management control, these departments typically adopt a "patchwork" approach: several separately-operating software applications, each designed to do one task or function. Fleet management is an example. It performs fleet management, but that's all it does.

This patchwork approach has been shown to be inefficient, prone to errors and fails to provide meaningful management reports needed to make informed decisions.

To illustrate: virtually all departments had access to computers, but lacked specialized management software needed to do the job. The most commonly-used software was word processing (95%), budgeting (63%), accounting (50%) and payroll (72%). These weren't the computer applications most wanted, however. The most wanted software application was Pavement Management, with User Tracking and Project Management software tying for second place. Several cities were looking at GIS mapping software, but few had the software installed.

It became clear that innovative solutions require more than better accounting or "number crunching" software. Computers and computer automation isn't the answer, in and of itself. A strategy must be developed.

Indeed, a focus is essential in today's economy. With the streamlining of government and significant revenue cuts, cities and local governments are amont the first to feel the effects. Cities operate with a relatively stable budget. When costs for labor, equipment and material increase, it is difficult to absorb these increases in today's tight budget environment. Additionally, federally mandated programs continue to increase. Many times, these programs are not funded and the cities must not only bear the costs of implementing these programs, but also allocate manpower to track information and prepare volumes of government reports.

This report provides a blueprint on how cities can operate more efficiently and be more productive. The authors with to thank the cities that participated in the survey. Their comments, observations and action plans form the basis of this report. The conclusions developed from the responses are the author's and were developed to offer a plan on how cities can streamline operations, improve productivity, and be more cost-effective.

The "bottom-line" is simple and straight-forward. In order for city street departments to operate more effectively, we need to provide them with the tools they need. Survey results support the efforts being done at the department level and identify specific actions that will improve department operations.