Arizona State Government Publications
Project S.L.I.M. report on the Highways Division, Arizona Department of Transportation 
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GV 80.2: H 43
COpy 2
CiOVERNOR'S OFFICE FOR
EXCELLENCE IN GOVERNMENT
Report on the
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Arizona Depil" tlll~ I~ I~ Transportation
." " ..... " ",.
August 1, 1993
TABLE OF CONTENTS
TITLE PAGE
Transmittal Letter. . . . . . . . . . . . . . . . . . . . . . . . . . . .. IV
ADOT Acceptance Letter , . . . . . . . . . . . . . . . .. V
Executive Summary 1
List of Recommendations 12
Equipment Services
1. Preventive Maintenance Scheduling 12
2. Equipment Management Systems .. , .. , .... ,........... 13
3. Veeder Root/ Cardlock Systems , 15
4. Equipment Surplus/ Obsolete Parts 17
5. Major Equipment Rebuilds , , . . . . . . . . . . . . . 20
6. Motor Pool Replacement Policy 22
7. Equipment Replacement Policy , 23
8. New Car " Get Ready" .. , 25
,
RIGHT- OF- WAY SECTION
9. Corridor/ Alignment Participation 26
10. Commitment To Five Year Plan " 28
11. Limited Change Orders After 30% Phase ,, 30
12. Policy For Privatization/ Consultant Use , ..... ,........... 32
13. Limited Advance Acquisition , , 35
14. Statute Changes For Acquisition And Disposal 37
15. Recovery Of Incurred Costs , , ,42
' 16. Combined Consultant Use For Plans 43
17. Property Management Privatization 45
18. Right- of- Way Issues ( Internal ADOT Team) 47
TRAFFIC ENGINEERING
19. In- House Traffic Control Design 48
20. Studies And Data Collection To Districts 50
21. Traffic Engineering Role .. . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ENVIRONMENTAL PLANNING
22. Environmental Clearance Process , , 52
ORGANIZATIONAL STRUCTURE/ STAFFING
23. Highway Division Macro Structure ( Internal ADOT Team) ,. 53
24. Equipment Services Section " , , 54
25, Urban Highways Consolidation ( Internal ADOT Team) .", 56
26. Materials Section ..•.. ,., " .. , , 57
27. Right- of- Way Section .......•... " .. " , , , 60
28, Construction Section •.... , 62
29. Construction Staffing ...,.......................... 64
30 Construction " Shelf" Positions .. , . . . . . . . . . . . . . . . . . . . . . 70
31. Traffic Operations , , 71
32. Districts 1- 4 Field FTE Reductions 73
33. Traffic Engineering Section , 74
II
34. Structures Section 76
35. Highways Division Technical Training 79
List of " Bullet Point" issues 82
Exhibit # 1
Exhibit # 2
Exhibit # 3
Exhibit # 4
Exhibit # 5
Exhibit # 6
Summary of Recommendations and Savings Matrix ... 89
OEG/ ADOT Partnering Agreement . . . . . . . . . . . . . .. 91
Team Activity Matrix 93
Team Work Plan 104
ESt Project Description " 107
Right- of- Way Recommendations Research Material . . .. 112
III
FIFE SYMINGTON
GOVERNOR
OFFICE OF THE GOVERNOR
OFFICE FOR EXCEI, I, ENCE IN GOVERNMENT
1700 West Wasbiogtoo, Suite 300, Pboeoix, Arizona 8SOO7 • ( 602) 542- 7546 • Fax ( 602) 542- 1220
June 21, 1993
Mr. Larry Bonine, Director
Arizona Department of Transportation
206 South 17th Avenue
Phoenix, Arizona 85007
Dear Mr. Bonine:
The Governor's Office For Excellence In Government's Project SLIM Team has
completed its review of the Arizona Department of Transportation Highways Division,
and we are pleased to present to you our report of findings and recommendations.
Our review was conducted from August, 1992 through June, 1993.
In total, we identified benefits of $ 35 million for the Highways Division, of which
$ 14.5 million is annual cost reduction, and $ 20.5 million is annual cost avoidance.
We wrote 35 formal recommendations, and identified 78 " bullet- point" issues that
should be considered by internal ADOT Quality Teams as potential areas for
improvement within the Division. The methodology used by this team relied heavily
on input from ADOT staff at all levels, and every effort has been made to achieve
" buy- in" from each of these levels. The team was involved in 102 meetings and 11
formal presentations' held for the sole purpose of developing a consensus between
ADOT staff and the Office For Excellence. Therefore, we believe the
recommendations contained in this report are realistic and implementable.
We thank you and all of the ADOT staff who assisted us in this endeavor, as the vast
majority of our recommendations were first articulated by ADOT employees,
customers, or constituents.
Sincerely,
IV
ARIZONA DEPARTMENT OF TRANSPORTATION
206 South Seventeenth Avenue - Phoenix, Arizona 85007- 3213
Phone: ( 602) 255- 7226 - FAX: ( 602) 255- 6941
FIFE SYMINGTON
Governor
LARRY S. BONINE
DireclDr
June 30, 1993
Mr. Tim Boncoskey, Director
Governor's Office for Excellence
1700 West Washington, Suite 300
Phoenix, 5f5007
Dear Mr. Jo'~ ey:
We have received the SLIM report for the Highways Division and concur with the
findings and recommendations that have been detailed by your staff. Mr. Marcum and his
team should be commended for their efforts and their willingness to work with our staff on
some very ambitious issues. The activities of this SLIM team have been a great
compliment to our Quality and Productivity Initiative here at ADOT. We will immediately
begin the implementation of these recommendations and the additional issues identified in
this report.
We look forward to having your staff assist us through tJ1e next year with the
Administrative Services, Aeronautics and Transportation Planning Divisions.
Sincerely,
~
LSBrrRWljs
v
HIGHWAYS AERONAUTICS MOTOR VEHICLE PUBliC TRANSIT ADMINISTRATIVE SERVICES TRANSPORTATION PLANNING
EXECUTIVE SUMMARY
The Governor's Office For Excellence In Government ( OEG) initiated a review of the
Arizona Department of Transportation ( ADOT) Highways Division in August, 1992.
The review of the Division was conducted by a four person Project SLIM Team and
was completed on June 30, 1993. This summary describes the objectives of the
review, the methodology used during the analysis, and the recommendations made
as a result of the effort. The potential benefits of the recommendations have been
quantified, suggested implementation dates provided, and recommendations requiring
legislative changes identified.
In total, 35 formal recommendations and 78 " bullet- point" recommendations were
written, yielding benefits of $ 35 million ($ 14.5 million in annual cost reductions, and
$ 20.5 million in annual cost avoidance). The impact of these recommendations on
the staffing levels of the Division was a reduction of 729 positions, comprised of 237
funded, full- time positions ( 108 filled, 129 vacant); and 492 non- funded " shelf"
vacancies. A summary of recommendations and related benefits is presented in
Exhibit 1, on p. 89 of this document. It is the firm belief of the Project SLIM Team
that all of these benefits can be realized while maintaining or exceeding the Division's
current service levels.
OBJECTIVES AND GOALS
The overall objective of the OEG review was to evaluate the ADOT Highways Division
using organizational analysis and Total Quality Management ( TQM) techniques,
identifying areas where operating costs could be reduced and improvements could be
made in the delivery of the Division's services. The goals were to streamline
processes; improve systems and procedures; eliminate re- work and unnecessary work;
and to re- align groups, with related functions. Additionally, the OEG Team facilitated
the establishment of organizational structures that could support the long- term goal
of continuous improvement.
METHODOLOGY
The approach used in this study was to take an integrated view of the Division,
studying the following varia'bles in each of the areas reviewed:
- mission
- strategic focus
- process flows
- technological support
1
information management
- organizational performance measurements
- quality and service levels ( customer orientation)
- organizational structure
- logistics and physical assets
The analysis began with the team studying " shelf data" provided by ADOT, to become
familiar with the mission, size, structure, and responsibilities of the major areas of the
Agency as a whole, and of the Highways Division in particular. Next, a " partnering"
session was held involving ADOT executive staff; ADOT Highways Division
management down to the Section level; OEG executive staff; and the OEG SLIM
Team. The purpose of the partnering session waslo identify mutual expectations for
the review, and to create an issue/ conflict resolution procedure. A copy of the
partnering agreement is presented in Exhibit 2, p. 91. The next phase was an
extensive interviewing and surveying process aimed at ADOT employees at all levels,
as well as ADOT customers and constituents. The purpose of this exercise was to
identify potential areas for improvement within the Division. During the course of the
review, the Team conducted a total of 558 interviews ( 447 internal and 111 external).
The team also conducted a written survey of 927 highway maintenance personnel;
reviewed the ADOT initiated survey of 500 Highway Development Group staff, as well
as the Development Group's OPI Senate Survey Analysis Report. The team visited
16 remote locations statewide, and conducted telephone interviews with Department
of Transportation representatives from 24 states ( see Exhibit 3, p. 93 ).
Through the use of the interview and survey instruments, the Team identified
potential improvement areas in the Division, progressing through the various
organizational units in the following sequence, as depicted in Exhibit 4 on p. 104:
- Equipment Services Section
- Highway Maintenance Section
- Materials Section
- Construction Section
- Urban Highways Section
- Right- of- Way Section
- Location Section
- Traffic Engineering Section
- Structures Section
- Design Section
- General Operations Section
2
An issue which needed to be addressed by the Team and ADOT management early
on in the review concerned the relationship between the SLIM Team and the many
internal ADOT quality improvement teams operating in the Agency. The solution
agreed upon was to maintain a flexible approach that resulted in SLIM team members
functioning in a variety of capacities with eight internal ADOT Quality Improvement
teams, serving as consultants, facilitators, or team members. The SLIM team also
requested that six separate " interface" teams be formed by ADOT to support the SLIM
analysis. There were four such teams in the highway maintenance area, and two
assigned to the Division restructuring effort.
As issues were identified, meetings were scheduled with the appropriate ADOT
managers at all levels of the Agency in an effort to reach consensus about the issues
on which the SLIM Team would focus its efforts. The issues ultimately receiving such
consensus were developed into the 35 formal recommendations contained in this
document. The balance of the 113 total issues identified became the " bullet- point"
recommendations that are found on pages 82- 88. Once an issue was identified as
one to be developed into a formal recommendation, appropriate analytical techniques
were employed to develop and quantify the recommendation, such as:
- identification of error prevention activities
- root cause analysis
- pareto analysis
- force field analysis
- process flow charting
- assessment of organizational structures:
* spans of control
* cost to manage
* managerial layering
*, alignment of mission
* overlapping or redundant functions
* centralization vs decentralization
When this activity was accomplished, meetings were again scheduled with ADOT
management at all levels to begin the consensus- building process on the formalized
recommendation and any benefits identified. In total, 102 such meetings were held
during the course of this study. Additionally, the SLIM Team made 11 formal
presentations during the year aimed at building consensus ( see Exhibit # 3, p. 93).
3
The following is an overview of the 35 recommendations that emerged from this
process ( with a brief description of their intent):
EQUIPMENT SERVICES ( FLEET/ EQUIPMENT MAINTENANCE)
1. Preventive Maintenance Scheduling
Establishes a pilot program to lengthen the time and mileage requirements
for specific ADOT vehicles.
Benefit: Increased staff time available for other work - Dollar Amount not
specifically quantifiable.
2. Equipment Management Systems
As a result of SLIM recommendations, an internal team with an outside
consultant, has reviewed the EMS system for improvement.
Benefit: A reduction in FTE level ( see Equipment Services Structure
Recommendation, p. 54) and an increase in the efficiency of the
Management Information System. Efficiency savings total $ 1.7 million over
a three year period, with an initial cost of $ 522,000. Net savings to ADOT
is $ 1.2 million over a three year period.
3. Veeder Root/ Cardlock Systems
The quantification of work hours reduction due to ADOT's continuing
implementation of these systems.
Benefit: Contained in the Equipment Services structure recommendation,
p. 54.
4. Equipment Surplus/ Obsolete Parts
Reduction of surplus/ obsolete parts inventory to 5% or less of the total
parts inventory improving acquisition time of parts.
Benefit: $ 100,000 cost reduction first year, $ 50,000 per year thereafter.
5. Major Equipment Rebuilds
4
ADOT needs to establish an equipment repair policy to determine the most
cost- effective method of repairing major equipment.
Benefit: $ 25,000 annual cost reduction.
6. Motor Pool Replacement Policy
The purchase of specific ADOT motor pool vehicles will be deferred one
year.
Benefit: $ 202,000 cost avoidance.
7. Equipment Replacement Policy
ADOT needs to establish an equipment replacement policy to guide the
purchase of new equipment.
Benefit: Equipment will be replaced in the most cost- effective manner.
8. New Car " Get Ready"
Makes recommendations to improve the " Get Ready" process for new
vehicles.
Benefit: Better customer service and an annual cost reduction of $ 108,000
( savings quantified in Equipment Services structure recommendation, p.
54).
RIGHT- OF- WAY SECTION
· 9. Corridor/ Alignment Participation
Improves the input of the Right- of- Way Section into the identification of
highway corridors and/ or alignments.
Benefit: Annual cost reduction of $ 419,000.
10. Commitment To Five Year Plan
Reduces the number of changes made annually to the Five Year
Construction Plan.
5
Benefit: Increases the efficiency of the right- of- way acquisition process.
11. Limited Change Orders After 30% Phase
Reduces the amount of change orders after the 30% design phase.
Benefit: Annual cost reduction of $ 405,000.
12. Policy For Privatization/ Consultant Use
Requires ADOT to establish a policy with specific written criteria to
determine the use of private sector services.
Benefit: Annual cost reduction of $ 55,000.
13. Limited Advance Acquisition
Requires ADOT to establish a policy with specific written guidelines for
advance acquisition of real property related to a project that has not been
funded.
Benefit: Approximate annual cost reduction of $ 2.9 million.
14. Statute Changes For Acquisition And Disposal
Requires legislation to be passed to provide ADOT with the ability to
abandon real property; to use licensed real estate agents and brokers; and
to adjust property values to provide just compensation to property owners.
Benefit: 5 year cost reduction equaling approximately $ 19.6 million, of
which 19.4 million is cost avoidance.
15. Recovery Of Incurred Costs
Allows ADOT to recover incurred costs when conveying property to other
federal, state, county, city, or town agencies.
Benefit: Revenue enhancement.
16. Combined Consultant Use For Plans
6
Allows ADOT Right- of- Way Section and Design Section to jointly use
consultant services for plans.
Benefit: Annual cost avoidance of $ 238,000.
17. Property Management Privatization
Requires ADOT to establish a policy with written criteria to determine when
private sector services are more cost- effective for property management
services.
Benefit: Reduced operating cost through FTE reductions ( see Right- of- Way
structure recommendation, p. 60).
18. Right- of- Way Issues ( Internal ADOT Team)
Reduces rework for title reports and consultant services.
Benefit: Annual cost reduction of $ 248,000. The complete report by this
Team may be reviewed at the Office For Excellence In Government.
TRAFFIC ENGINEERING
19. In- House Traffic Control Design
Reduces the use of consultants for traffic engineering electrical design.
Benefit: Annual cost reduction of $ 300,000.
,
20. Studies And Data Collection To Districts
Allows the outlying traffic engineering crews to perform some of their own
remedial studies and data collection.
Benefit: Cost reduction in the travel budget and improved time frames.
21. Traffic Engineering Role
Requires Traffic Engineering Section to be a primary participant in the
development of the Freeway Management System and ISTEA Safety and
Congestion Management Program.
7
Benefit: Re- structures organization and increases staff so unit can better
fulfill its mission.
ENVIRONMENTAL PLANNING
22. Environmental Clearance Process
An analysis of problems in the environmental clearance process that result
in project delays. Recommendations included ensuring the quality of
outside consultants; conducting project scoping in the project development
phase; scheduling formal partnering sessions with affected agencies; and
implementing internal ADOT training on environmental issues.
This study was lead by an internal ADOT Team - the complete
recommendations may be reviewed at the Office For Excellence In
Government. Benefit: Annual cost avoidance of $ 619,000.
ORGANIZATIONAL STRUCTURE/ STAFFING
23. Highways Division Macro Structure
Restructuring of the Highways Division - reduces two layers of
management; increases spans of control; improves customer service at the
District level through decentralization and empowerment; and establishes
Project Management as the new method for conducting the Division's
business. Quantification of savings and benefits are described in
recommendations # 24- 35.
24. Equipment Services Section
Improves services and downsizes the organization by 26 FTEs.
Benefit: Annual cost reduction of $ 691,000.
25. Urban Highways . Consolidation ( Internal ADOT Team)
Consolidates 2 sections within the Highway Development Group;
establishes a Project Management Section; and reduces 9 consultant
positions. The full report provided by the ADOT Team is available at the
OEG.
8
Benefit: Annual cost reduction of $ 1.5 million.
26. Materials Section
Improves services and downsizes the organization by 13 FTEs.
Benefit: Annual cost reduction of $ 494,000.
27. Right- of- Way Section
Improves services, recommends changes in statutes, and reduces the
organization by 18 FTEs.
Benefit: Annual cost reduction of $ 582,000.
28. Construction Section
Improves services and downsizes the section by 9 FTEs.
Benefit: Reduces FTE levels and operating costs ( see Construction Staffing
Point, p. 64)
29. Construction Staffing
Recommends that ADOT adopt a ratio of 1.3 FTE per contractor million of
payments as the standard for staffing construction ORGs. Reduces the
organization by 134 positions.
Benefit: Annual cost reduction of $ 5.15 million.
30. Construction " Shelf" Positions
Recommends that ADOT abolish all vacant positions in 8250 ORGs. that
exceed the established construction FTE level. Reduces the organization by
492 unfunded, vacant positions.
Benefit: Removing surplus and duplicative positions will bring the data base
in- line with authorized FTE levels.
31. Traffic Operations
9
Recommends having a team look at the internal billing process. Downsize
the signal, lighting, and sign shops, reducing the organization by 5 FTEs.
Benefit: Annual cost reduction of $ 150,000.
32. Districts 1- 4 Field FTE Reductions
Each District reviewed their non- construction vacancies and determined
which positions could be abolished, reducing the organization by 14 FTEs
and $ 367,000.
Benefit: Annual cost reduction of $ 367,000.
33. Traffic Engineering Section
Recommend increasing in- house traffic control design work. Some remedial
studies and data collection recommended to be moved to the districts.
Increased role by Traffic Engineering in the Freeway Management System
and ISTEA Safety and Congestion Management Program. Includes FTE
additions.
Benefit: Increase effectiveness for the Division's Traffic Engineering
activities. Total net savings to the Agency for all Traffic Engineering
recommendations is $ 70,000.
34. Structures Section
A comprehensive review of the Structures Section with recommendations
to improve, processes, downsize 9 positions, upgrade Detailers from 17 to
18, and create 3 grade 22 positions.
Benefit: Annual cost reduction of $ 303,000.
35. Highways Division Technical Training
This recommendation develops a coordinated and comprehensive approach
to providing technical training to the Division. The establishment of a
Technical Training Service with 6 new positions - transferring all current
Training Officer I positions ( in the Division) to the Technical Training Service
- eliminating or drastically reducing the Central Arizona College contract
($ 273,220). The estimated cost of establishing the new positions for this
10
recommendation is $ 231,939.
Benefit: Improved productivity of staff; lowered equipment repair
/ maintenance costs through reduction in equipment abuse/ misuse. Annual
cost savings of $ 41,000.
As mentioned, in addition to the 35 formal recommendations, the Team also identified
78 " bullet- point" issues. These are areas that did not receive the necessary
consensus to develop into formal recommendations, but were considered to be
important enough to list as potential areas for further improvement, and should,
therefore, be investigated by future ADOT internal quality teams.
Finally, the OEG SLIM Team would like to acknowledge today's ADOT as an Agency
that demonstrates a commitment to improving the quality of its products and services
through the use of contemporary Quality Management practices. It should be noted
that the original ideas for improvements and cost savings contained in this document
came from the employees and customers of ADOT. It was the methodology used by
the Governor's Office For Excellence In Government that encouraged this input from
all levels of the Agency, and developed that input through a consensus- oriented
process into tangible opportunities for change and improvement. The employees of
ADOT should be commended for their efforts and assistance to the OEG SLIM Team,
and for their commitment to continually improving ADOT services to the citizens,
residents, and visitors that travel Arizona's Highways.
11
RECOMMENDATIONS
EQUIPMENT SERVICE.. 5
# 1 - Preventive Maintenance Scheduling
Current Situation
ADOT Equipment Services is responsible for scheduling and performing preventive
maintenance ( PM) on vehicles. PM intervals are assigned in the Equipment
Management System based on class of vehicle. In equij> ment classes 0030- 0290,
which includes sedans, pick- ups and 1 ton trucks, the " AIt level PM is set for 4
months or 6000 miles, whichever occurs first.
An " A" service consists of oil/ filter change and lubrication. Equipment Services also
inspects the vehicle.
There are 1475 vehicles in these classes of which 636 ( 43%) are driven less than
12,000 miles per year.
Impact
Many vehicles are having IIAII PM services performed at 4 month intervals ( or
less) even though they have accumulated only 1000- 4000 miles since their last
servicing. This results in unnecessary services and increased operating costs
for low usage vehicles.
Recommendation
ADOT Equipment Services should institute a pilot program of 25 vehicles per
district and change the IIAII PM service interval from 4 months/ 6000 miles to
6 months/ 6000 miles for vehicles in equipment classes 0030 - 0290. The pilot
program will run for 3 years. At this time, the program will be evaluated to
determine whether these criteria should be adopted for the entire fleet.
Benefit
The reduction of the number of IIAII services, through an increased time interval
from 4 months to 6 months, will increase the time equipment technicians have
available to perform other PM services. The quantification of savings is not
available at this time.
12
# 2 - Equipment Management System
Current Situation
The Equipment Management System ( EMS) has · been operational for eight and
one- half years. During this time the system has been upgraded both with vendor
supplied enhancements and internal modifications to meet changing needs.
• Mechanics report their labor on a daily shop labor document. Each task,
work order number, vehicle number and the time required to complete the
task are reported . Subsequently, these data are entered into EMS using an
on- line transaction.
• Receipt of parts requires an on- line transaction that includes the keying of
the ADOT stock number. Any issues related to the transaction require the
keying of the ADOT stock number and the repair/ PM work order number.
• A minimum of two on- line transactions ( three if delay times are recorded)
are required to enter data at the close of a work order.
Impact
• The mechanics spend several minutes per day completing their daily shop
labor document. Additional time is spent keying this data into the system.
• Parts personnel expend time keying stock numbers and repair/ PM work
order numbers into the system.
Recommendation
• ADOT establish an internal QPI team to further investigate improving the
efficiency and effectiveness of the EMS.
Note: A team was subsequently established to review the EMS process,
and the report was finalized on June 30, 1993 ( see Exhibit # 5, p. 107).
The full report. is available for review at the Office For Excellence In
Government..
• Equipment Services evaluate the cost effectiveness of using bar code
readers for both the parts receipt/ issue processes and the shop labor
process. EMS currently contains an on- line cross reference file of ADOT
13
stock numbers to manufacturers part numbers, therefore, bar code labels
would not be required. The mechanics would be provided a repair task list
with bar codes and the repair/ PM work order number would be printed both
in alpha numeric and bar code format. In addition to the time saved filling
and keying documents, the accuracy of the task labor data would certainly
improve.
• EMS staff combine the " MISCL"( work order close), " MIUON"( downtime)
and " MISWO"( delay time) transaction into one transaction thereby reducing
the time and keying required to close a work order.
Benefit
• A reduction in FTE levels ( see structure recommendation, p. 54) and a more
efficient Management Information System. The recommendations will result
in a savings of $ 1,7 million over a three year period, at a one- time cost of
$ 522,000 - yeilding a net three savings to AOOT of $ 1.2 million. The
$ 522,000 represents start- up cost, and the break- even point on this
investment is 9 months.
14
# 3 - VEEDER ROOT TANK SENSORING SYSTEM AND
CARDLOCK FUEL DISPENSING SYSTEM
This recommendation relates to a previously established and on- going ADOT program
improvement.
Current Situation
Within the current five year tank replacement program being administered by
Equipment Services personnel, automated tank level sensors are included in all new
tank installations. 21 of ADOT's tank sites have been upgraded.
Fuel Dispensing Information Management
Fuel tickets are manually collected daily at all fuel locations and sent to the nearest
Equipment Services' shop for data entry.
Impact
• Fuel Storage Tank Measurement/ Monitoring
Manual tank measurement, data input into the Tank Integrity Subsystem
and the associated data reduction require considerable time.
• Fuel Dispensing Information Management
Fuel ticket entry and data verification require 19 man hours per week
statewide and 20 man hours per week in Phoenix.
Recommendation
• Fuel storage Tank Measurement/ Monitoring
When all tanks have been upgraded to include Veeder Root tank sensors,
the Tank Integrity Subsystem will no longer be required and one FTE
( P& PSI) will be eliminated.
• Fuel Dispensing Information Management
As funds become available and automated cardlock systems are installed at
the appropriate sites, the need for fuel data verification will be minimized
and an FTE ( IPS III) will be eliminated.
15
Benefit
Greater efficiency, reduced FTE levels, and reduced operating costs ( see
Equipment Services structure recommendation, p. 54).
16
# 4 - EQUIPMENT SURPLUS/ OBSOLETE PARTS
DOA Procurement Rules should be interpreted to allow Equipment Services to use the
re- stock/ buy- back program to dispose of miscellaneous parts. It is suggested that a
review of equipment should be conducted to determine the specific equipment classes
that are continually surplused because they have become obsolete or overstocked,
before the re- stocking fee program is utilized.
Current Situation
The total value on hand of the obsolete parts inventory has gone down dramatically
from $ 324,009 on February 28, 1992 to $ 28,5,. 0 on November 23, 1992 ( a ten
month period). The average per month value of obsolete parts during these ten
months, was $ 105,645. During this time period, the obsolete parts value constituted
6% of the total parts inventory value. Obsolete parts are defined by Equipment
Services Section as those parts which are no longer used on vehicles or equipment
in the active fleet.
Some contracts for parts include a clause requiring the successful bidder to perform
a fleet survey for the purpose of suggesting inventory stock requirements for the
Equipment Services Section. The Equipment Services Administrator and ADOT
Procurement have stated that a report produced by the Equipment Management
System determines what inventory stock is required, not the successful bidder.
Currently, the majority of parts contracts are Phoenix- based with three to six day
delivery times.
Equipment Services has previously contacted DOA Procurement to secure permission
to utilize contract and oft- contract vendors for the return of miscellaneous parts.
Equipment Services \/ yould negotiate a re- stocking or buy- back fee. Three bids would
be used to solicit vendors who would be interested in purchasing the obsolete parts.
If a part becomes overstocked or obsolete the contract vendor would credit Equipment
Services for the initial price, less the re- stocking fee. Example - An average
re- stocking fee of 15% would create an 85% credit to Equipment Services.
Miscellaneous parts disposed of through DOA Property Surplus are currently bringing
a 5% return to Equipment Services. The Department of Public Safety utilizes a
re- stocking fee program. and has at times received 100% credit. A. C. C.
R2- 7- 803. E. 2.( a)/( 4) of the State Procurement Rules states, " Before surplus materials
are disposed of by trade- in to a vendor for credit on an acquisition, the Surplus
Property Manager and State Procurement Administrator shall approve such disposal.
The Surplus Property Manager shall base this determination on whether the trade- in
value is expected to exceed the value realized through the sale or other disposition of
17
such materials."
DOA Procurement believes that a change in the interpretation of that rule would
constitute a gift to the State of Arizona ( transfer of property for future consideration)
if a re- stocking fee resulted in a credit to Equipment Services. They believe that it
would appear that the credit was an inducement for the State to condition a future
order to collect the payment. It was stated in a June 19, 1990 memo from DOA
Surplus Property that, " That appearance is to be avoided."
Impact
• Stock inventory levels may be kept at a higher level because of the
limited accessibility caused by the Phoenix- based contracts.
• Cost recovery is not easily tracked because the parts number issued by
Equipment Services is not noted on the DOA Authorization form.
• Allowing Equipment Services Section to dispose of property through a
vendor utilizing a 15% or better restock fee would result in an 85% or
better return on the investment rather than the DOA Surplus Property
method that resulted in an average of a 5% return on the investment.
Recommendations
• Obsolete parts inventory should be maintained at a 5% level of the Total
Parts Inventory.
• The Shop Parts Expeditor, not the successful bidder, should perform the
survey tp determine inventory stock requirements. The clause should be
deleted from the contract.
• The Equipment Services number assigned to parts should be noted on
the Property Disposal Request and Authorization form along with the
class code to track the cost recovery.
• All parts contracts should be written to allow the Parts Expeditor the
flexibility to buy off contract when necessary to repair equipment and
reduce downtime. In metropolitan areas, where vendors can deliver
parts several times a day, inventory should be limited to the 100 most
used categories of parts. The successful bidder should have the
capability of delivering parts to the shop upon request in the shortest
18
Benefit
time frame.
• ADOT Procurement should be very specific about when it is not
necessary for the successful bidder ( parts vendors) to provide parts
statewide as they solicit bids for - ADOT contracts. This should
encourage parts vendors in metropolitan areas other than Phoenix to
submit bids. ADOT Procurement currently monitors 42 ADOT contracts
and 20 State contracts for parts.
• Allowing Equipment Services Section to dispose of property through a
vendor utilizing a 15% or better restock fee would result in an 85% or
better return on the investment rather than the DOA Surplus Property
method that resulted in an average of a 5% return on the investment.
EXAMPLES: If DOA Surplus Property disposed of the obsolete property,
Equipment Services would have received a revenue of $ 6,741 in April or
$ 1,090 in September if restocking had been utilized. Equipment
Services would have received a credit of $ 114,611 in April or $ 18,530
in September, from parts vendors.
• Overhead costs would be reduced.
• Tracking of obsolete parts would allow specific cost recovery to be
monitored.
• Improved availability of parts may reduce turn around time on vehicle
repair.
• Reducing the Equipment Services obsolete inventory stock on hand to
5% would reduce the amount of credit and could easily be cleared from
the vendors' books prior to the end of the contract period. This should
address the Department of Administration's concern with the
Procurement Rule.
• The combination of the lowered inventory, lowered obsolete inventory,
improved tracking and the increased return on investment
recommendations, in our opinion, will result in some overall reduction in
parts inventory expenditures. An estimate of cost savings through these
recommendations should result in a savings of $ 100,000 the first year
and $ 50,000 annually thereafter.
19
# 5 - MAJOR EQUIPMENT REBUILDS
The rebuilding of engines and transmissions should occur in the most cost- effective
manner. Equipment repair history documents show a cost savings may be realized by
comparing written cost estimates between contracted repair vendors and Equipment
Services staff. A written policy would provide the gUidelines for this type of repair.
Current Situation
After review of selected large equipment repair histories, evidence indicates that
in- house repair costs sometimes exceed cost estimates provided by contracted repair
vendors. The Equipment Services Administrator indicates that engines are no longer
rebuilt in- house on a regular basis. They are rebuilt only as filler work as needed for
the Heavy Equipment Repair Technician group.
Impact
• Lack of a written policy regarding cost efficiency for major rebuilds
results in additional repair costs to the Equipment Services Section and
equipment users.
• No warranty is provided when the work is completed in- house.
• Extended downtime for the equipment may cause the user to keep a
higher equipment inventory to accommodate the downtime of
equipment.
• An exp~ nded inventory increases the user's costs for equipment usage
and monthly rental.
Recommendations
• A policy should be written by Equipment Services certified mechanics
and Shop Supervisors representing all Districts to guide major equipment
rebuilds/ replacements. The policy shall be reviewed by the Equipment
Services Administrator, a representative of the State Engineer's Office
and a Fleet Manager from outside of ADOT and approved by the State
Engineer's Office.
20
• After determining that an engine/ transmission needs major repair, the
Shop Supervisor must review the options of: 1) replacement 2) rebuild
in- house 3) rebuild by private vendor. The written policy will guide the
selection of the option.
• The Equipment Shop Supervisors in the Districts should monitor this
program utilizing the EMS to track the equipment's repair history and
realize the greatest savings to the Arizona Department of Transportation.
Benefit
Utilization of the rebuild guidelines should produce a minimum cost savings of
$ 25,000 annually.
21
# 6 - MOTOR POOL REPLACEMENT POLICY
The vehicles utilized in the ADOT motor pool are currently replaced according to the
standard replacement policy.
Current Situation
There are presently 92 vehicles listed as being in the ADOT motor pool. Input from
Equipment Services staff suggests that these vehicles should be replaced using a
different replacement criteria.
Impact
Some vehicles are being sold at auction when there is still an opportunity for
significant savings by utilizing the vehicles longer than the current specified
replacement period.
Recommendation
Extend the " replacement by age" criteria by one year for vehicles assigned to
the ADOT Motor Pool.
The following vehicles would not be replaced this year:
3 1984 Compact Sedans
7 1985 Compact Sedans
11 1986 Compact Sedans
These seda, ns have an average cost of approximately $ 9,616.00.
Benefit
There is an estimated minimum savings of approximately $ 201,936 by
extending the replacement criteria for the identified motor pool vehicles.
22
# 7 - EQUIPMENT REPLACEMENT POLICY
The purchase of equipment by Equipment Services, initiated by either Equipment
Services staff or other ADOT personnel should be guided by a written policy.
The purchase of unique equipment and equipment purchase priorities are currently
guided by the recently re- established Equipment Review Committee. There is,
however, no written policy guiding these activities. Routine equipment is requested
by telephone or at meetings held at the district level with the Fleet Manager.
Current Situation
Of $ 20 million paid to Equipment Services in equipment rental last year, a large
portion of which was paid by the ADOT Highways Operations Group, Equipment
Services spent $ 4.9 million for equipment purchases.
The Equipment Review Committee is comprised of the Assistant State Engineer for
Maintenance, the Equipment Services Administrator, the four District Engineers or
their representatives, and a rotating position currently filled by the Assistant State
Engineer for Locations. The Fleet Manager, an attending non- member, is primarily
responsible for acquiring equipment. This Committee was recently re- established and
has been meeting quarterly to review non- routine equipment requests.
Impact
• Equipment rental cost the Highway Operations Group about $ 20 million
last year and equipment acquisitions cost the Equipment Services
Section $ 4.9 million last year.
Recommendations
• A written policy should be established by the Equipment Review
Committee and approved by ADOT management and Highway Division
budget staff. The written policy would allow for the oversight of
non- routine equipment requests and the review of their cost
effectiveness.. The written policy would require the user to justify the
need for the equipment, document costs, estimate utilization, and
present the options researched.
23
• The Equipment Review Committee should be expanded and formally
charged with monitoring the requests and expenditures for non- routine
equipment to assure needs are met and that the greatest savings are
realized by the Arizona Department of Transportation.
• The Equipment Review Committee make up should include the following
additional members:
Mechanical Equipment Design Engineer
Private Sector Equipment Vendor
Fleet Management Manager
• The four informal District Equipment Review Committees should utilize
a similar policy to guide the requests made to the Fleet Manager and
prioritized by the Equipment Review Committee.
Benefit
The formal written policy will provide the Equipment Review Committee with
guidelines to ensure cost- effective expenditures for equipment. Monitoring requests
and expenditures for non- routine equipment, in compliance with the written policy,
will ensure equipment needs are met and the greatest savings are realized by the
Arizona Department of Transportation.
24
# 8 - NEW CAR GET READY SHOP - LIGHT TRUCKS AND CARS
Equipment Services receives all new light vehicles for the agency and then processes
them through the " Get Ready" shop for distribution to the other areas of the
Department.
Current Situation
Each new vehicle must be recorded, licensed, inspected, and have decals, lights, tool
boxes, and radios installed as appropriate. In addition, all light vehicles have their
wheel alignment inspected by Equipment Services prior to the vehicle being delivered.
During the past two years, ADOT's purchase of fleet vehicles has declined due to a
reduction in the monies available in the revolving fund. subsequently, the amount of
work done by the Get Ready Shop has also declined proportionally.
Impact
• The processing of new vehicles does not require the same number of
staff that were previously required for larger budget expenditures for
fleet vehicles.
Recommendations
• The Get Ready shop be downsized to:
1 Equipment Shop Supervisor
2 Equipment Repair Technicians
1 Equipment Service Assistant.
• Within 60 days the Get Ready Shop establish performance standards for
the processing of new equipment.
Benefit
• The reduction of 4 vacant FTE with subsequent vacancy savings of
approximately:$ 88,540.00 ( savings identified under Equipment Services
Recommendation Exhibit # 1, p. 89).
• Employee Related Expenses ( ERE- 22.6%) savings would approximate
$ 20,010.04.
25
RIGHT OF WAY
# 9 - CORRIDOR/ ALIGNMENT PARTICIPATION
Current Situation
Right- of- Way Section has limited input over the identification of corridors or
alignment of highways.
• Corridors are established by the Transportation Planning Division of ADOT
and approved by the ADOT Board based on future transportation needs.
Impacts
• When the highway alignment is designed there is no one on the design
project specializing in the cost of the property within that alignment.
• Increases workload of Right- of- Way Agent prior to acquisition phase.
• Increases the potential for higher project costs.
Recommendation
Appropriate Right- of- Way personnel should be members of the Project
Management Team to assist as needed with the alignment design of the
highways. Their role would be to provide a variety of services including the
estimated costs of a specific alignment and advise on alignment adjustments
that would not affect safety, yet reduce the potential cost of Right- of- Way
acquisition prior to the 30% design phase.
Benefit
• Reduces acquisition costs by purchasing parcels with lower market value.
• Reduces potential for litigation involving disputes and damage claims.
• Reduces workload of Right- of- Way Agent during acquisition phase.
• Eases the acquisition process by reducing negative impacts.
• Reduces the potential for higher project costs.
26
Cost Savings/ Avoidance
Quantitative cost savings cannot be precisely forecast. Based on discussions
with Right- of- Way professionals, a conservative estimate of a 1% savings
associated with this process improvement would realize $ 418,850 in 1994 ( the
5 Year Plan identifies $ 12,985,000 for State and $ 28,900,000 for MAG Rightof-
Way acquisition). The basis for the estimate is by assigning an appropriate
person whose primary concern is the " cost" of right- of- way property, not in
merely establishing a dollar figure that is to be used for planning purposes,
ADOT will save at least 1% of the money they have allotted for right- of- way
acquisitions in 1994.
27
# 10 - " Commitment to 5 Year Plan
Current Situation
The Right- ot- Way Section has limited input over the 5 year Construction Plan
determining the time frame for acquisition and construction.
Impact
• Right- of- Way acquisition completed 5 years in advance of the originally
scheduled construction date may eventually stretch to 10 years in
advance ot the rescheduled construction date.
• Prolonged property management costs to ADOT ( see # 17 - Property
Management Privatization point).
• Less revenue available for the Right- of- Way acquisition needs for a
highway project that was moved up in the 5 year plan.
• Difficult to plan for Right- of- Way staffing needs.
• True costs of re- allocating funding between projects because of
scheduling changes are not known but may impact available funding for
Right of Way acquisition. May be more costly to re- allocate and expend
the funds for a new project than losing the funding all together.
• Increases the potential for higher project costs.
Recommendation
ADOT should reduce the numerous changes made annually to the 5 year
Construction Plan and coordinate it with Right- of- Way's priority list.
Benefit
• Reduces the amount of time between acquisition and construction.
• Reduces property management costs to ADOT.
• Reduces potential for higher relocation and demolition costs.
28
• Improves planning of acquisition schedule.
• Improves planning of staffing needs.
• Reduces delay to highway user.
• Reduces the potential for higher project costs.
Cost Savings/ Avoidance
Cost savings cannot be precisely forecast ( or estimated).
29
# 11 - LIMITED CHANGE ORDERS AFTER 30% PHASE
Current Situation
The Right- of- Way Section has no control over the Design Process and the number of
change orders affecting Right- of- Way requirements.
Impact
• Causes delays in completing Right- of- Way planning process.
• Reduces public confidence and credibility of ADOT.
• Causes delays in completing Right- of- Way acquisition process.
• Increases workload on Right- of- Way staff.
• Increases the potential for higher project costs.
Recommendation
Right- of- way requirement changes must be approved by the Project Manager
after the 30% design phase. Changes after the 60% design phase must be
approved by the Project Manager utilizing Life Cycle Program costs as the
determining factor.
Benefit
• Reduces delays in Right- at- Way planning process.
• Reduces delays in Right- at- Way acquisition process.
• Reduces workload on Right- of- Way staff.
• Reduces the potential for higher project costs.
• Provides more quality up- front in the 30% phase.
30
Cost Savings! Avoidance
The limitation of design changes is expected to save $ 405,000 per year
according to analysis found in the Right- of- Way Requirements OPI report of
February, 1993 ( RIW rework due to design change will save $ 297,000; design
rework due to RIW requests will save $ 15,000; and reducing consultant rework
will save $ 194,000). There were 355 formal change orders in 1991, making
the average cost of a change order $ 1 ,425.
31
# 12 - ' POLICY FOR PRIVATIZATION/ CONSULTANT USE
Current Situation
The Right- of- Way Section has not set a policy to use the services of the private
sector.
Impact
• No system exists to determine when to utilize Right- of- Way staff or the
private sector for completion of plans, appraisals, acquisitions, property
management and relocations. This creates a higher potential for
subjectivity when selecting in- house or contract services.
• Cost effectiveness of contracting out services versus those services
provided in- house is not measured.
• Higher number of litigation cases related to acquisition when acquisition
services are provided by Right- of- Way staff compared to the number of
litigation cases when acquisition services are provided by private sector.
• Increases travel and per diem costs with Right- of- Way staff based in
Phoenix traveling statewide compared to using local agents.
• Requires a higher baseline staffing level without addressing peaks and
valleys of workload.
• Continued use of consultants for specific services may affect the Rightof-
Way. staff's ability to effectively monitor consultant work.
• Increases the potential for higher project costs.
Recommendation
The Right- of- Way Section should establish a policy with written criteria,
including a cost/ benefit formula with a weighting system attached to each
criteria, to determine in an objective manner the use and selection of private
sector services. A non- compensated temporary committee including ADOT
Right- of- Way Staff, ADOT Procurement Staff, non- ADOT Right- of- Way
professionals and members of the general public should be responsible for
developing the policy. The ADOT Director should approve this policy. The
32
policy must be applied to all major Right- of- Way Section work activities. A
tracking system should be established to measure costs of private sector and
Right- of- Way Section Staff. Right- of- Way Staff should utilize the minimum
appraisal necessary and be held to provide the same level of service as required
by the contracted staff. The Right- of- Way Section should utilize the
professional services of the ADOT Procurement group to develop all bids and
Requests for Proposals.
Benefit
• Reduces selection subjectivity.
• Cost effectiveness will be measurable.
• Lower number of litigation cases if there is an increase in the use of
private sector appraisers.
• Reduces Right- of- Way agent travel and per diem.
• Increases section's flexibility to deal with the peaks and valleys of the
workload.
• Reduces the potential for higher project costs.
Cost Savings/ Avoidance
The cost of performing an appraisal is dependent upon a number of variables.
The cost for a private citizen to obtain an appraisal ranges from $ 250 to $ 500
per appraisal. , The more complex the property, the higher the cost of the
appraisal. The contracted or " fee" appraisers have a higher level of technology
for research sources available to them along with a greater frequency in the
market area. The average cost paid by ADOT to fee appraisers is $ 2,212 per
appraisal. The average number of hours per appraisal is 12. The average cost
of an appraisal performed by ADOT staff is $ 1,910. The average number of
hours is 34. In FY 1991/ 92, 30 appraisals were contracted out and 214 were
performed by ADOT., Staff. Utilizing a range of set fees for " fee" appraisals
should save a minimum of $ 500 per appraisal. Utilizing the minimal appraisal
necessary should reduce staff appraisals by a minimum of $ 448 ( 8 hours X
$ 56/ hour) per appraisal. In FY 1991/ 92 these changes would have saved
$ 110,822. It is not known how many appraisals will be performed next year
by fee or staff appraisers. A very conservative estimate of actual savings
33
' would be half of the 1991/ 92 figures or $ 55,436.
34
# 13 - LIMITED ADVANCE ACQUISITION
Current Situation
ADOT has no policy to limit advance acquisition to hardship only purchases
until the funding for highway construction has been secured.
Impact
• Acquisition funds are expended for projects never funded for
construction.
• Long- term property management responsibilities.
• Increased property management costs due to increased inventory.
• Public perceives ADOT as poor planners and managers when property is
acquired in advance and never used or used more than 10 years later for
a highway project.
• Increases the potential for higher project costs.
Recommendation
The Right- of- Way Section, in conjunction with the ADOT Director and Board,
should establish a policy that would limit advance acquisitions ( purchases of
real property prior to having secured funding for the construction of the
highway), particularly non- hardship cases. State Statute 28- 1865, Section 5,
Subsection D may need to be statutorily changed to ensure enforcement of the
policy, if the ADOT Director and Board are unable to establish a policy.
Benefit
• Increase of property remaining on the tax rolls.
• Reduces ADOT property inventory.
• Reduces property management costs.
• Reduces relocation costs.
35
• Improved image of ADOT.
• Reduces the potential for higher project costs.
Cost Savings/ Avoidance
Cost savings with this recommendation cannot be precisely calculated. The
Chief Right- of- Way Agent agrees that some limitations should result in at least
5% reduction in annual acquisition costs. In 1994, this would save $ 2.9
million based on funding identified in the 5 Year Plan.
36
# 14 - ' STATUTE CHANGES FOR ACQUISITION AND DISPOSAL
Current Situation
ADOT has not been successful in changing statutes and regulations that
contribute to the high cost of acquisition and disposal of excess property.
There are three major factors in State Statute 28- 1865 that limit the ADOT
Right of Way Section's ability to save taxpayer monies. Those factors are the
( 1) ability to abandon, ( 2) use of licensed real estate agents and brokers and ( 3)
methods of acquisition.
Impact
Ability to Abandon
• Limits ability of ADOT to conduct business as the private sector would
when abandoning or disposing of property.
• Excess property classified as uneconomic remnants remain on the ADOT
property inventory indefinitely. ADOT currently does not have a
complete inventory list of excess parcels.
• Abutting land owners not willing to pay for small, irregular shaped
parcels.
• Increases long- term property management costs.
• Increases administrative workload for Right- of- Way staff.
• Increases overall costs of highway projects.
Impact
Disposal Methods
• Citizens typically first utilize the services of licensed real estate agents
when looking to purchase houses, buildings and property. They cannot
learn of ADOT properties this way.
• Limits ADOT's communication and marketing ability of properties
available for sale to infrequent brochure mailings and newspaper notices.
37
• Requires greater effort from citizens to become informed on ADOT
properties to be auctioned.
• Increases administrative workload for Right- of- Way staff to organize
auctions and handle transactions.
• Increases travel and per diem for Right- of- Way staff
• Increases overall costs for highway project.
Impacts
Acquisition Method
• Increases costs to taxpayers when an ADOT improvement project is the
cause for an increase in the market value of a property and then ADOT
must pay that higher value to obtain the property for that improvement
project.
• Reduces the amount of highway that can be constructed until more
funding can become available.
• Increases potential for higher project costs.
Recommendation
ADOT should seek sponsorship and introduce legislative changes to State
Statute 28- 1865, Section 5, Subsections B, G, Land M. ADOT should actively
seek input and support from taxpayers for these changes.
• Ability to Abandon - State Statute 28- 1865, Section 5, Subsection B
needs to be amended to allow ADOT the ability to abandon uneconomic
remnant parcels to a willing abutting land owner.
• Disposal methods - State Statute 28- 1865, Section 5, Subsection G
needs to be amended to allow ADOT the flexibility to use licensed real
estate brokers and their services to dispose of properties in addition to
the public auction method of disposal.
• Acquisition method - State Statute 28- 1865, Section 5, Subsections L
and M need to be amended to allow ADOT the ability to use a " Just
38
Compensation" formula for the acquisition of all properties when only a
parcel of a property owner's contiguous property will be acquired by
ADOT. This compensation formula would allow for a fair profit to be
made by landowners, as a result of the State's acquisition of right- ofway
property.
It is recommended that ADOT hold community forums to jointly develop
this legislation with interested groups and individuals, including those
representing private citizens and taxpayers. When enough community
input is received for a reasonable definition of " just compensation" to be
developed, ADOT should pursue the relevant legislative changes.
Benefit
Ability to Abandon
• Allows ADOT to conduct business as the private sector would when
abandoning or disposing of property.
• Reduces ADOT property inventory. ( Currently, well over 500 excellent
parcels identified.)
• Increase of property on the tax rolls.
• Reduces property management costs.
• Reduces administrative workload for Right- of- Way staff.
• Reduce~ the potential for higher project costs.
Benefit
Disposal Methods
• Improves service to citizens statewide by making it easier to purchase
properties frol11 ADOT
• Increases revenue potential by increasing opportunities for citizens to
purchase ADOT properties.
• Reduces administrative workload for Right- of- Way staff.
39
• Reduces travel and per diem for Right- of- Way staff.
• Reduces the potential for higher project costs.
Benefit
Acquisition Method
• Reduces costs to taxpayers.
• Allows property owners to be justly compensated for their loss of
property.
• Increases the amount of highway that can be constructed with less
funding.
• Reduces land speculation.
• Reduces the potential for higher project costs.
Cost Savings/ Avoidance
Ability to Abandon
ADOT does not have an up- to- date inventory of excess lands. It is
estimated that there are more than 500 excess land parcels owned by
ADOT. A very conservative cost savings to ADOT would be $ 12,500
( property management at $ 25 per parcel annually). The abandonment
would place the parcels back on the tax roll, producing a minimum of
$ 25,000 in tax revenue to the State ( 500 parcels valued at $ 500 each with
10% property tax).
Cost Savings/ Avoidance
Disposal Methods
ADOT disposes of excess land, structures and mobile homes by public
auction or conveyance to another entity. In FY 1991/ 92 revenues totaled
$ 1,789,185. The use of licensed real estate brokers to market and sell
ADOT property would conservatively increase revenue to ADOT by 10%
( based on the benefits described above). Using last year's revenue as a
40
base, revenue would increase by $ 178,919.
Cost Savings/ Avoidance
Acquisition Method
Conservatively and without a definitive formula, " Just Compensation"
legislation could off- set 20- 40% of the right- of- way costs on transportation
projects in undeveloped and developing areas. For example, if the state
program funding figures in the current 5 Year Plan and a 30% savings figure
are used as a methodology, ADOT could realize a cost avoidance of $ 19.43
million during 1994- 1998 ( 1994-$ 8.67, 1995-$ 2.67, 1996-$ 4.5, 1997
- $ 2.0, 1998 - $ 1.59). However, actual savings will vary based on the
length of time it takes to develop a consensus definition of " Just
Compensation" and the post 1998 acquisition schedule.
In the past, ADOT has presented " before and after" legislation based on the
federal land acquisition model as an alternative to reduce the cost of rightof-
way acquisition. It is estimated that this " before and after" approach
could result in a savings of up to $ 60 million for this same five year period.
This approach is still a valid alternative, however, for estimated savings in
this report this alternative was not used.
41
# 15 - RECOVERY OF INCURRED COSTS
Current Situation
The Right- of- Way Section historically has conveyed property to other federal,
state, county, city or town agencies for ADOT's original purchase price.
Impact
• ADOT's incurred costs as owners of the property are not recovered
resulting in ADOT subsidizing federal, state, county, city or town
agencies.
• Increases the potential for higher project costs.
Recommendation
The Right- of- Way Section should track costs incurred By ADOT and attributable
to that property during ADOT's ownership of the property. When the property
is conveyed to the agency, the price shall recover the original purchase price
and all costs associated with acquisition and relocation costs.
Benefit
• Increases accountability of costs associated with and attributable to
Right- of- Way.
• Increases revenue through cost recovery.
• Reduces overall cost of highway project.
42
# 16 - COMBINED CONSULTANT USE FOR PLANS
Current Situation
The Design Section and the Right- of- Way Section each enter into contracts for
the use of consultants to complete plans.
Impacts
• Design and Right- of- Way Sections must each go through the bidding and
selection process to hire a consultant.
• Increases cost to ADOT since each contract charges overhead cost.
• Increases overall cost to highway project.
Recommendation
Both sections should coordinate their plans' needs and enter into one contract
for the use of a qualified consultant to complete both Design and Right- of- Way
plans.
Benefit
• Reduces staff's administrative workload for bidding and selection.
• Reduces overhead costs paid by ADOT for two contracts.
• Improves communication between sections.
• Reduces overall cost of highway project.
Cost Savings/ Avoidance
During the last fiscal year there were 9 plans contracts in Right- of- Way that
potentially could have been combined with Design Section contracts to utilize
one contractor. The expertise needed for developing Right- of- Way plans and
the expertise needed for developing roadway design plans are vastly different;
there are, however, firms that can do both. A combined proposal should weigh
the needs of both Right- of- Way and roadway designs equally. The
administrative costs of managing two contracts are higher than managing one
contract.
43
Eliminating the 43% overhead cost in just half of the projects in 1991- 1992,
ADOT would achieve a cost avoidance of $ 237,919 ( 9 projects contracted in
Right- of- Way Plans Section at a cost of $ 1,106,599 reduced by 43% then cut
in half).
44
# 17 P'ROPERTY MANAGEMENT PRIVATIZATION
Current Situation
The Right- ot- Way Section's Property Management Program maintains properties
and structures ( vacant and occupied by lease) until needed tor the highway
construction process. Revenue is generated by this program. ADOT pays a
24% in- lieu tax on those properties that are leased to compensate the counties
tor their loss in property taxes. Right- ot- Way staff are responsible tor the
administrative duties associated with leases, maintenance contracts, rental
revenue collection, relocation and demolition scheduling.
Impact
• Increases workload ot Right- ot- Way staff tor post Right- ot- Way
acquisition duties.
• Workload is dependent upon the scheduling ot the projects within the 5
Year Construction Plan.
• Increases overall cost to highway project.
Recommendation
The Right- ot- Way Section Property Management program should be reduced by
contracting out, with one private sector provider, the property management
function for all rental properties with structures. The Chief Right- of- Way Agent
should work with the ADOT procurement staff to establish and process a
Request For Proposal ( RFP). The initial bid should only be awarded it the
successful bid is more cost- effective than a 5 year average of costs incurred
by ADOT providing the same level of service as outlined in the RFP. Staff level
should be adjusted appropriately in the new organizational structure it a bid is
not awarded.
Benefit
• Reduces workload ot Right- ot- Way staff tor post right- ot- way acquisition
duties.
• Reduces the potential for higher project costs.
45
Cost Savings/ Avoidance
The cost savings for this recommendation is realized in FTE reductions only at
this time. Additional cost savings may be realized it the property management
firm selected is able to reduce maintenance costs related to the rental
properties.
New Organizational Structure - See Attachment
Staff Reduction: From 127 FTE's to 109
FTE Cost Savings: $ 582,762 ( quantified under Right- ot- Way Structure
Recommendation, p. 60).
46
# 18 · ' RIGHT- Of- WAY ISSUES ( Internal ADOT Team)
Reduces rework for title reports and Consultant Services. Internal ADOT team
had the lead in this recommendation ( a full report is available at the Office for
Excellence in Government).
Benefit: Annual cost reduction not duplicative of above recommendations is
$ 248,000.
47
TRAFFIC ENGINEERING
# 19 - INCREASE TRAFFIC CONTROL DESIGN WORK COMPLETED IN- HOUSE
Current Situation
Designs are contracted out 90% of the time. A variety of staff are responsible
for monitoring these contracts.
Impact
• Traffic Engineering Section staff have reduced opportunity to develop
expertise.
• Difficult to monitor contract cost when the Section has no cost figures
to compare.
• Contractors are charging 150% overhead even when ADOT is providing
equipment and office space for contractors.
• No Section staff to complete design if contract fails.
Recommendation
Traffic Engineering should strive to achieve, within 3 years, performing a
minimum of 50% of the design work in- house. Additional staff of 7 will be
needed to perform at a 50% level. Additional staff should be phased into the
Section ( see attached proposed structure for 1994, p. 74).
Benefit
• Competent in- house core group established.
• Good comparison of cost and time frame for contract monitoring.
• Experienced staff to complete a project if a contract fails.
• Reduction of contract costs.
48
Cost Savings/ Avoidance
• Addition of 3 FTE's, at cost of $ 108,329, to perform additional 10% of
work in- house first year. Reduction of contractor billing hours by 10%
($ 3M consultant budget) will save $ 300,000.
49
# 20 - · SOME REMEDIAL STUDIES AND DATA COLLECTION DECENTRALIZATION
Current Situation
The Studies Branch currently performs all but a few remedial studies and data
collection for ADOT and all Districts.
Impact
• Time delays for Districts needing studies completed for budgeting
purposes.
• Travel for Phoenix- based studies staff.
• Time delays for some Traffic Engineering studies when working on
District studies.
Recommendation
• Allows the outlying traffic engineering crews to perform some of their
own remedial studies and data collection.
Benefit
• Improves turn around time for District studies.
• More time for Studies Branch staff to perform other studies.
• Reduced travel time and costs.
50
# 21 - TRAFFIC ENGINEERING ROLE IN FREEWAY MANAGEMENT SYSTEM
AND * ISTEA SAFETY & CONGESTION MANAGEMENT PROGRAM
• INTERMODAL SURFACE TRANSPORTATION EFFICIENCY ACT
Current Situation
The new Freeway Management System is currently the responsibility of District
One. The Traffic Engineering Section has played a very limited role in its
development. Primary responsibility of the Safety & Congestion Management
Program is still under discussion with the Federal government but Traffic
Engineering needs toplay · a major · role, in its development and implementation.
Traffic engineering is a specialized area unlike civil engineering.
Impacts:
• Traffic Engineering issues are being addressed by Civil Engineers with
less experience in the management of traffic than seasoned Traffic
Engineers.
• Focus is on the handling of accidents after they occur, not preventing
them.
Recommendation
• Traffic Engineering Section and its appropriate staff should have a
significant leadership role in both development and operation of the
Freeway Management System and the ISTEA Safety & Congestion
Management Program.
Benefit
• Greater focus on proactive management not reactive response to traffic
issues.
Cost Savings/ Avoidance:
• Staffing increase addressed in structure.
• Cost savings cannot be quantified at this time.
51
# 22 - ENVIRONMENTAL CLEARANCE PROCESS ( Internal ADOT Team)
An analysis of problems in the environmental clearance process that result in
project delays. Recommendations included ensuring the quality of outside
consultants; conducting project scoping in the project development phase;
scheduling formal partnering sessions with affected agencies; and implementing
internal ADOT training on environmental issues. This study was lead by an
internal ADOT Team - the complete recommendations may be reviewed at the
Office For Excellence In Government.
Benefit: Annual cost avoidance of $ 619,000.
52
ORGANIZATION STRUCTURE AND STAFFING
# 23 - HIGHWAY DIVISION MACRO STRUCTURE
An internal ADOT team working with the Project SLIM Team developed a new
organizational structure for the Highways Division, which accomplished the
following:
• Reduced two layers of management
• Increased span of control at all levels
• Improved customer services at the District level through decentralization
and employee empowerment
• Established Project Management as the new philosophy for conducting
the Division's business
( quantification of savings and benefits are described in recommendations
# 24 - 35)
The new structure is expected to enhance the quality of ADOT's service
delivery while reducing FTE levels by 729 positions ( 108 filled, 129 funded
vacancies, and 492 unfunded vacancies), for a total annual savings to the State
of Arizona of over $ 9 million.
The macro level current and proposed organizational charts are attached. Subunit
charts are, available at the Office For Excellence In Government.
53
Artzona Department 01 Transportation
HIGHWAYS DIV1S10N
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ATTACHMENT
CURRENT ORGANIZATION STRUCTURE
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PROPOSED ORGANIZATION ATTACHMENT
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53 b
# 24 - ' EQUIPMENT SERVICES SECTION
Current Situation
Equipment Services has reviewed their authorized positions and after an
assessment of current business practices, and the consideration of some future
changes, determined that existing and proposed service levels can be
maintained while reducing the current staffing profile.
Impact
The reduction of these positions will not impact on Equipment Services ability
to provide minimum, established levels of service.
Recommendation
As a result of the in- depth review of staffing patterns the following positions
are scheduled to be abolished immediately:
Position Number
0084/ 3075AAN
0253/ 5810AAN
o199/ 5670AAN
0019/ 5874AAN
0205/ 0683AAN
Q055/ 3257AAN
0038/ 0714AAN
Q117/ 0737AAN
0119/ 1199AAN
Q071/ 0678AAN
10726AAN
10675AAN
0008/ 3750AAN
0263/ 5747AAN
0098/ 0694AAN
o139/ 3626AAN
o192/ 3325AAN
Job Title
Clerk Typist II
Environmental Health Spec. 1
Accounting Tech. II
EDP Prog/ Anal. II
Equip. Repair Tech.
Equip. Repair Tech.
Equip. Repair Tech.
Equip. Repair Tech.
Equip. Repair Tech.
Equip. Repair Tech.
Equip. Repair Tech.
Equip. Repair Tech.
Clerk Typist III
Weight & Measures Insp.
Facility Support Worker
frog. Proj. Spec. II
Info. Proc. Spec. II
Total of 17 Positions
54
Salary
$ 16,062.00
$ 21,584.00
$ 20,278.00
$ 28,435.00
$ 26,993.00
$ 22,135.00
$ 26,993.00
$ 30,068.00
$ 26,993.00
$ 26,993.00
$ 31,258.00
$ 26,993.00
$ 17,699.00
$ 22,974.00
$ 19,142.00
$ 25,182.00
$ 17.755.00
$ 407,537.00
The following positions will not be funded and will be eliminated:
4893
5706
3256
4803
5452
4452
Student Aide
Clerk Typist III
Equip. Repair Tech.
Student Aide
Equip. Service Assist.
Clerical Assist:
Total of 6 Positions
$ 4,698.00
$ 14,558.00
$ 22,135.00
$ 4,698.00
$ 17,755.00
$ 11.998.00
$ 75,842.00
These 3 FTE's are to be abolished at future dates as the Equiment Management
System is revised and implemented:
0102/ 5555AAE
0244/ 5419AAN
0201/ 3629AAE
Benefit
Prog. Proj. Spec. I
Info. Proc. Spec. III
Equip. Utilization Sup.
Group Totals/ 26 FTE
ERE Addition
Grand Total
$ 29,203.00
$ 18,891.00
$ 32.626.00
$ 80,720.00
$ 564,099.00
$ 126.922.28
$ 691,021.28
Total combined savings of immediate and projected reductions of FTE's in
Equipment Services is $ 691,021.28 annually.
55
# 25 - URBAN HIGHWAYS CONSOLIDATION ( Internal ADOT Team)
Consolidates 2 sections within the Highway Development Group; establishes
a Project Management Section; and reduces 9 consultant positions. The full
report provided by the ADOT Team is available at the OEG.
Benefit: Annual cost reduction of $ 1.5 million.
56
# 26 - MATERIALS SECTION
The engineer of Materials heads the Materials Section of the Highways Division. The
Materials Section conducts research into construction materials and methods,
develops pavement sections for use in designing new projects, develops test methods
and acts as the reference laboratory for the district and project laboratories. It also
designs asphaltic and portland cement concrete pavements and performs tests that
cannot be made in the district or project laboratories.
The Materials Section monitors the tests performed by the project and the district to
see that the laboratories have acceptable correlation of tests and consults with the
districts and projects to maintain uniform testing procedures. Special reference tests
are prepared and sent to district laboratories to check testing procedures. A program
of periodic checking of test equipment used in district and project laboratories is used
to maintain the accuracy of the equipment.
Current Situation
Org 4841 - Testing Services
Testing frequencies are being evaluated and revised, and some work
processes have and are being changed.
Org 4842 - Geotechnical Services
Workloads and priorities are being shifted at this time. Materials Section
has recommended the reduction of one drilling crew and associated
equipment. Some crews workloads justify a reduction in the number of
staff performing the work.
The Foundation & Geologic Investigation Branch has difficulty meeting
schedules for the design section due to frequent breakdowns of old
equipment.
Org 4843 - Pavement Services
Due to changing workloads and availability of contracted specialty services,
if necessary, 1 Transportation Engineering Specialist position could be
eliminated.
57
Impact
Org 4841 - Testing Services
As a result of changing testing procedures and priorities 6 positions may be
eliminated.
Org 4842 - Geotechnical Services
As a result of an in- depth review of geotechnical services it was determined
that one drilling crew ( 3 FTEs) and associated equipment, and 3 other FTEs
could be eliminated.
Due to frequent breakdowns of drilling equipment, geotechnical services is
experiencing difficulty completing their projects in a timely manner.
Org 4843 - Pavement Services
Has a vacant Transportation Engineering Specialist position whose
requirements may be contracted out.
Recommendations
The following positions are recommended to be abolished:
Org 4841 - Testing Services
1 - Information Processing Specialist III
1 - Transportation Construction Technician II
1 - Transportation Construction Technician III
3 - Transportation Engineering Specialist
Org 4842 - Geotechnical Services
2 - Transportation Materials Field Crew Tech I
2 - Transportation Materials Field Crew Tech II
2 - Transportation Materials Field Crew Tech III
Org 4843 - Pavement Services
1 - Transportation Engineering Specialist
58
As a result of staff reductions and re- distribution of work, some excess
equipment will be turned back to Equipment Services. The following
Equipment is recommended to be * eliminated from ADOT's ( Org. 4842)
inventory:
1 - Core Drill ($ 1,000)
2 - Pickups ($ 4,000)
It is recommended that the drilling rigs for the Foundation and Geologic
Investigation Branch be evaluated by Equipment Services for dependability
and serviceability. Downtime with the present equipment must be reduced.
* This equipment should be sold.
Benefit
The elimination of the above items, plus support other operating and travel
funds, results in an approximate savings of:
13 Positions = $ 351,522
ERE @ 22% = $ 77,335
Travel Reduction = $ 39,555
Equipment Reduction = $ 5,000
Other Operating = $ 20,200
Total Combined Saving = $ 493,612
59
# 27 - AIGHT- OF- WAY SECTION
Improves services and downsizes the section by 18 FTEs.
STAFF CHANGES
• Abolish four Grade 22 positions ( Admin Service Officer III)
Minimum annual salary $ 34,737 plus ERE $ 7,990 equals $ 42,727
$ 170,908 Total Savings
• Abolish one Grade 21 position ( RIW Agent IV)
Minimum annual salary $ 31,879 plus ERE $ 7,332 equals $ 39,211
$ 39,211 Total Savings
• Abolish four 20 positions ( 2 RIW Appraiser III, Legal Analyst, R/ W
Reviewer) Minimum annual salary $ 29,097 plus ERE $ 6,692 equals
$ 35,789
$ 143,156 Total Savings
• Abolish four Grade 19 positions ( 2 RIW Plans Supervisors, Title Examiner
III, 1 R/ W Agent III)
Minimum annual salary $ 26,182 plus ERE $ 6,022 equals $ 32,204
$ 128,816 Total Savings
• Abolish one Grade 13 position ( Right- of- Way Assistant)
Minimum annual salary $ 17,618 plus ERE $ 4,052 equals $ 21670
$ 21,670 Total Savings
• Abolish , seven Grade 18 positions ( 5 RIW Agent II, Eng. Plans Tech III,
RP App II)
Minimum annual salary $ 24,238 plus ERE $ 5,575 equals $ 29,813
$ 208,691 Total Savings
• Abolish three Grade 11 positions ( Info Proc. Spec II, 2 Secretaries)
Minimum annual salary $ 15,481 plus ERE $ 3,561 equals $ 19,042
$ 54,126 Total Savings
60
• Create one Grade 19 Administrative Services Otticer position ( Consultant
Administrator)
Minimum annual salary $ 26,182 plus ERE $ 6,022 equals $ 32,204
$ 32,204 Total Additional Cost
• Create three Grade 12, Administrative Secretary I positions.
Minimum annual salary $ 16,531 plus ERE $ 3,802 equals $ 20,333
$ 60,999 Total Additional Cost
• Create one Grade 16, Right- ot- Way Agent I position
Minimum annual salary $ 20,895 plus ERE $ 4,806 equals $ 25,701
$ 25,701 Total Additional Cost
• Create one Grade 21, Transportation RIW Plans Manager position.
Minimum annual salary $ 31,879 plus ERE $ 7,332 equals $ 39,211
$ 39,211 Total Additional Cost
• Create one Grade 16, Right- ot- Way Appraiser
Minimum annual salary $ 20,895 plus ERE $ 4,806 equals $ 25,701
$ 25,701 Total Additional Cost
ALL FILLED POSITIONS
• FTE Savings to ADOT
• FTE Additional Cost to ADOT
• Total FTE Annual Savings to ADOT
61
$ 766,578
$ 183,816
$ 582,762
# 28 - CONSTRUCTION SECTION
Current Situation
Org 4833 - Construction Claims Branch
Processes construction claims that have been filed with ADOT. There has
been a significant reduction in claims due to successful partnering activities.
Org 4834 - Construction Management Branch
Administers the construction management program regarding manpower
forecasting and planning. Districts have been trained in the construction
management system.
Org 4831 - Field Review Branch
Conducts statewide quality assurance inspections of construction projects
in the districts.
Org 4837 - Reports Audit Branch
Verify mathematical correctness and compliance with specifications, all
documentation submitted from the field to support final pay quantities to
contractors on all State highway construction projects.
Impact
Org 4833 - Construction Claims Branch
Is overstaffed by one FTE due to a significant reduction in the amount of
claims being processed.
Org 4834 - Construction Management Branch
Construction Management System training activities have been reduced in
the districts.
62
Org 4831 - Field Review Branch
As a result of a branch review of workloads, this branch is overstaffed by
2 positions.
Org 4837 - Reports Audit Branch
With the pending full implementation of Field Office Automation System
( FAST), the workload of the branch will decrease significantly and allow a
reduction of 3 FTEs.
Recommendation
Org 4833 - Eliminate the following positions:
1 - Tr. Eng. TIL position. ( Abolish 7/ 1/ 94)
Org 4834 - Eliminate the following positions:
1 - Tr. Eng. Spec.
1 - Tr. Const. Tech 1\ 1
Org 4831 - Eliminate the following positions:
1 - Tr. Eng. Spec.
1 - Traf. SIL Tech II
Org 4837 - Eliminate the following positions:
1 - Tear Supv. ( by July 1, 1994)
1 - Tr. Const. Tech II
1 - Info. Proc. Spec. II
1 - Tr. O/ C Spec.
Benefit
• For quantification of savings see Construction Staffing recommendation,
p. 64.
63
# 29 - CONSTRUCTION STAFFING
Current Situation
The Highway Division manages all highway construction in Arizona. The actual
construction of roads is performed by private contractors selected through a
competitive bidding process. The specific activities performed within the Highways
Division, called construction engineering, include but are not limited to the following:
• Inspection and materials testing of roadway construction to ensure
procedures and materials meet plans and specifications
• Surveying
• Reviewing roadway design drawings
• Approving all payments to contractors
• Monitoring force accounts
• Processing contractor claims
• Reviewing and approving change orders
Although most of these activities continue to be the responsibility of full- time ADOT
personnel, the Department contracts with private engineering firms, and hires
temporary and seasonal personnel to augment in- house staff. ADOT also transfers
some quality control and surveying responsibilities to the contractors.
The Highways Division carries out its responsibilities through staff in four engineering
. districts and its central office. Staff, organized into areas encompassing several units
( ORGS), oversee construction activities, provide on- site inspections, and provide nondirect
support to the construction process. Construction ORGS typically include
resident engineers, engineering specialists, quality control technicians, survey
personnel, materials testing. staff, and records clerks.
Non- direct construction staff are defined as those personnel dedicated to providing
necessary support to the construction process, but are not located at the project level
and not required directly for the administration of the contract.
64
Construction staff are funded primarily from the ADOT construction budget
established each year by the Transportation Board. Construction funded positions are
identified with a Budget Identification Number ( BIN) of 8250. Construction funds are
derived from the Highway User Revenue Fund ( HURF) which consists of revenues
from the gasoline tax and other transportation- related fees. Construction funded staff
positions are not appropriated by the Legislature; but are determined by the
Department, based on total construction activity.
The tentative five- year construction program produced by the Transportation Planning
Division projects the following construction spending schedule ( see Attachment II A",
p. 68).
As of March 3, 1993, there were 650 authorized full- time employees ( FTEs) of which
585 were filled. Of the 585 filled positions, 442 were allocated to construction ORGS
and 143 ( 24.4%) were located in ORGS other than construction.
The Highway Division calculates an Arizona Construction Cost Index to track materials
expenditures. The Federal Highway Administration ( FHWA) also produces a quarterly
and annual index for federal aid projects in Arizona. Currently there exists a
substantial difference between the two indexes.
ADOT FHWA/ AZ
ANNUAL ANNUAL
YEAR INDEX INDEX DIFFERENCE
1987 100.0 100.0 0.0
1988 92.0 86.0 - 6.0
1989 87.0 85.5 - 1.5
1990 90.0 131.2 41.2
1991 86.0 90.7 4.7
1992 80.0 101.2 21.2
Impact
Based on current and projected funding levels as well as productivity
improvements it is necessary to adjust construction staffing levels and assign
personnel to appropriate funding sources.
65
Recommendation
Reduce the number of construction funded positions in BIN 8250 by
establishing a construction staffing policy detailing the criteria that determines
when positions should be assigned to BIN 8250 ( see attachment " B", p. 69)
• Abolish unnecessary and duplicative positions from the Human
Resources Management System ( HRMS) and define the authorized level
for construction funded positions ( see " Shelf" Construction Funded
Positions recommendation, p. 70).
Establish a construction staffing plan using FTEs per million dollars of
contractor payments as a baseline ( see attachment" A" I p. 68) and increase the
use of interim staffing such as seasonal and contracted temporary personnel.
Establish an internal team, incorporating an outside economist/ consultant, to
implement improvements to the Arizona Construction Costs Index. The team
should consider:
• Index methodology
• Appropriate materials components ( representative of total construction
spending)
• Correct " weighting" of index components based on relative importance
to the construction activities
• Causes of significant differences between the FHWA and Arizona
indexes,.
This recommendation should be implemented by October 1, 1993. By January,
1994, construction staffing levels should be re- adjusted using the newly
developed index, but in no instance shall the index used for fiscal year 1995 be
less than 1.00.
Benefit
Using a maximum baseline of 1.3 direct FTEs and .3 non- direct FTEs will yield
the following savings ( assuming first year staffing reductions of 69 FTEs)* See
attachment A ( p. 68) and Note below:
66
Vacancy savings of 65 FTEs ( 650- 585) @ $ 18,727 = $ 1.21 mil
ERE at 28% = $ 0 .34 mil
69 FTEs x 1686 hrs ( loaded rate) x $ 27 per hour = $ 3.14 mil
69 FTEs x 402 hrs ( non- load rate) x $ 8.97 per hour = $ 0 .25 mil
ERE at 28% = $ 0 .07 mil
69 FTEs X .8 equals 55 vehicles
that can be sold @ $ 2500 = $ 0 .14 mil
TOTAL $ 5.15 mil
· Note: Additional savings may occur in FY 1995 and beyond due to staffing
ratio adjustments based on revised funding levels and application of a revised
Arizona Construction Cost Index. ( see attachment " B", p. 69!.
67
ATTACHMENT " An
5 YEAR CONSTRUCTION - SPENDING SCHEDULE
IN MILLIONS OF DOLLARS
FY 1994
STATE 276.4
EMERGENCY 16.6
RELIEF
MAG 127.2
LOCAL GVT. 33.5
* TOTAL 453.7
DIRECT CONST.
FTE's 413
NON- DIRECT
FTE's 67
EXCEPTIONS 36
TOTAL STAFF
REQUIRED 516
FTE RATIO 1.. 1
CURRENT CONST
STAFFING 585
1995
265.6
0.0
43.3
35.5
344.4
413
67
36
516
1.5
516
1996
244.8
0.0
70.4
32.0
347.2
413
67
36
516
1.5
516
1997
284.4
0.0
127.3
32.0
443.7
413
67
36
516
1.2
516
1998
300.0
0.0
51.0
28.5
379.5
413
67
36
516
1.4
516
SURPLUS 69 o o o o
* NOTES:
1) All of the figures shown are displayed in 1993 dollars.
2) The " revised" Arizona Construction Costs Index will be applied to total
spending. Construction staff levels and surplus will be revised.
3) No allowances have been made for productivity improvements ( Le. FAST
Project) or for reduced sampling and testing of materials.
68
ATIACHMENT nB"
CONSTRUCTtON STAFFING POLICY
ADOT should use a guideline of 1.3 FTEs per million dollars of expenditures for direct
construction funded positions. The FY 1995 target for direct construction FTEs
should be re- examined in January 1994. This should be an annual procedure.
Beginning January, 1994, staffing levels will be calculated by applying the revised
Arizona Construction Cost Index but in no instance should the index used for fiscal
year 1995 be less than 1.00. ADOT should minimize the number of non- direct
construction FTEs, and at no time should this total exceed a ratio of .3 FTE per million
of adjusted construction expenditures.
On an annual basis, if the time charged for any specific position falls below 50%, a
review will be conducted to determine if the appropriate funding base is being utilized.
Develop a process to capture non- direct construction funded project charges ( labor
cost distribution).
No position will be authorized for construction funding that cannot maintain a 50%
charge to project ratio. This category includes, but is not limited to Bridge
Construction ( Structures Section), Electrical Inspection, Non- Supervisory Field
Reports, Personnel, Certification Acceptance, Internal Audit, District CMS, and District
Laboratory Staff.
In addition, a limited number of employees may charge to construction as exceptions
to the policy ( i. e. non- directs that do not fully meet this policy). These exceptions
include:
2 Safety ,
9 Engineers- in- training
13 FAST ( Q. P. t.)
1 Internal Audit
1 Certification Acceptance
10 Bridge Maintenance
36
At no time should the FTE per million for all direct and non- direct construction FTEs
exceed a 1.6 ratio. Construction staffing levels and assignments to funding sources
will be monitored and appropriately adjusted at least annually if necessary.
69
# 30 - CONSTRUCTION " SHELF" POSITIONS
Current Situation
The Arizona Department of Transportation ( ADOT) is responsible for
establishing the authorized staffing levels for construction funded positions.
Construction funded positions are identified with a Budget Identification
Number ( BIN) of 8250. As of March 3, 1993, ADOT had established an
authorized level of 650 permanent full- time ( PF) positions. There were a total
of 1,142 positions located in the Human Resource Management System
( HRMS) data base. Approximately 127 of these positions are for seasonals,
temporaries, and interns.
Impact
Over the past several years, the total number of positions in the HRMS data
base has grown substantially. Most of these positions have never been filled,
but the vacant positions have been accumulating in the data base. As of March
3, 1993, there were 492 vacant positions.
Recommendations
ADOT should abolish unnecessary and duplicative positions from the HRMS
data base and establish the authorized level of construction funded positions
as follows:
Abolish vacant and unfunded positions from 1142 to 650 ( 492 positions) and
establish a new authorized level of 685 construction funded positions ( 585 full
time and 100 seasonal).
Benefits
Removing surplus and duplicative positions will bring the data base in- line with
authorized FTE levels.
70
# 31 - tRAFFIC OPERATIONS
Current Situation
Org 4862 - Signal Shop Maintenance Unit repairs or tests electrical items,
modifies traffic signal cabinets, installs/ assists with new cabinets, and conducts
traffic cabinet quality checks statewide.
Org 4867 - Sign Manufacturing Unit is responsible for producing signs for all
districts. The construction of signs is shifting from wood to metal.
Org 4868 - Interstate Signing Unit is responsible for maintaining the signs on
the interstate system. Construction of major signs is contracted out and
occasionally the contractor's signs do not meet the sign inspector's
requirements.
Impact
Org 4862 Signal Shop Maintenance Unit is modifying traffic cabinets to meet
ADOT specification when the cabinet could be ordered with the ADOT
specification and eliminate the need for installation by org staff. Traffic cabinet
work could be performed with less staff.
Interstate signs built by contractors frequently need to be redone due to failing
to pass quality inspections because the contractor used two different lots of
materials in making one sign.
Metal signs require no painting. The Traffic Engineer has stopped the painting
of wood signs.,
Recommendation
Org 4862 -
Eliminate the following positions:
1 - Traffic S/ L Crew Supervisor ( vacant)
2 - Traffic S/ L Tech II ( vacant)
71
brg 4867 -
Eliminate the following positions:
1 - Painter
1 - Carpenter
Org 4868 -
Have the Org build all interstate signs and contract out only the installation
( when necessary).
Benefit
Having all interstate signs built at Org 4868 eliminates rework by private
contractors.
The reduction of 5 FTE's results in an approximate savings of $ 122,000.
Additional ERE @ 230/ 0 adds $ 28,000 for a total of $ 150,000.
72
# 32 - ' DISTRICT 1- 4 FIELD FTE REDUCTIONS
CURRENT SITUATION
Due to changes in work loads and priorities, the districts have identified the following
vacant positions that can be abolished.
DIST/ ORG POSITION TITLE SALARY
DIST 1 None identified
DIST 2
Org 4299 Tr. S/ L Crew Supv. Grade 18 $ 24,238
Org 4299 Tr. S/ L Tech II Grade 17 $ 22,481
Org 4299 Tr. S/ L Tech II Grade 17 $ 22,481
Org 4299 Tr. S/ L Tech II Grade 17 $ 22,481
Org 4200 Tr. Eng. Per. Tech II Grade 16 $ 20,895
Org 4207 Tr. Const. Tech III Grade 16 $ 20,895
Org 4207 Tr. Const. Tech III Grade 16 $ 20,895
Org 4270 Tr. Landscape Spec. * Grade 18 $ 24,238
Org 4271 Hwy. Maint. Supv* Grade 19 $ 26,182
DIST 3
Org 4321 Laborer* Grade 10 $ 15,275
DIST4
.
Org 4421 Hwy. Maint Tech 1* Grade 13 $ 17,618
Org 4434 Hwy. Maint Tech 1* Grade 13 $ 17,618
Org 4481 Hwy. Maint Tech 1* Grade 13 $ 17,618
Org 4484 Hwy. Maint Tech 111* Grade 16 $ 20,895
Total Salary $ 293,810
Total ERE @ 25% $ 73,452
Combined $ 367,262
* Savings from maintenance funded positions should be re- allocated
within the current maintenance budget.
73
# 33 - TRAFFIC ENGINEERING STAFFING COST SAVINGS/ INCREASES
The following changes are proposed for Traffic Engineering:
• Create one Grade 24 position ( Tr Eng. Ill)
Minimum Annual Salary $ 41,533 plus ERE $ 9,553 equals $ 51,086
$ 51,086 Total Cost Increase
• Create two Grade 23 position ( EOP Tech. Sup. Spec. lIl, Traffic Eng. Supv.)
Minimum Annual Salary $ 37,978 plus ERE $ 8,735 equals $ 46,713
$ 93,426 Total Cost Increase ( AOOT will have Personnel review the EOP
position for proper classification.)
• Create one Grade 20 position ( EOP Tech. Sup. Spec. 1)
Minimum Annual Salary $ 29,097 plus ERE $ 6,692 equals $ 35,789
$ 35,789 Total Cost Increase
• Create three Grade 22 positions ( Traf. Engineer I)
Minimum Annual Salary $ 34,737 plus ERE $ 7,990 equals $ 42,727
$ 128,181 Total Cost Increase
• Create four Grade 18 positions ( Eng. Plans Tech III, Contracts Mgmt. Spec. lI,
two Tr. Traf. Studies Analysts).
Minimum Annual Salary $ 24,238 plus ERE $ 5,575 equals $ 29,813
$ 119,251 Total Cost Increase
• Create two Grade 16 positions ( Admin. Support Super. 11,
Eng. Plans Tech II) Minimum Annual Salary $ 20,895
plus ERE $, 4,806 equals $ 25,701
$ 51,402 Total Cost Increase
• Create three Grade 13 positions ( Info. Proc. Spec. III)
Minimum Annual Salary $ 17,618 plus ERE $ 4,052 equals $ 21,670
$ 65,010 Total Cost Increase
• Create one Grade 11 position ( Info. Proc. Spec. II)
Minimum Annual Salary $ 15,481 plus ERE $ 3,561 equals $ 19,042
$ 19,042 Total Cost Increase
74
• Abolish two Grade 24 positions ( Tr. Traf. Eng. Mgrs.)
Minimum Annual Salary $ 41,533 plus ERE $ 9,553 equals $ 51,086
$ 102,171 Total Savings
• Abolish one Grade 22 position ( Tr. Traf. Eng. Team Leader)
Minimum Annual Salary $ 34,737 plus ERE $ 7,990 equals $ 42,727
$ 42,727 Total Savings
• Abolish one Grade 20 position ( Hwy Safety Spec. llI)
Minimum Annual Salary $ 29,097 plus ERE $ 6,692 equals $ 35,789
$ 35,789 Total Savings
• Abolish two Grade 14 positions ( Eng. Plans Tech I, Admin. Supp. Super. l)
Minimum Annual Salary $ 18,755 plus ERE $ 4,314 equals $ 23,069
$ 46,138 Total Savings
• Abolish three Grade 11 positions ( Info. Proc. Spec. lI)
Minimum Annual Salary $ 15,481 plus ERE $ 3,561 equals $ 19,042
$ 57,126 Total Savings
• Contract Employee - $ 48,500 ( Admin Asst., Contracts)
Vacant Positions
2 Tr. Traf. Eng. Mgrs.
FTE creation costs
FTE abolish savings
Contract employee s~ vings
Net additional FTE costs
$ 563,187
$ 283,951
$ 48.500
$ 230,736
75
Traffic Engineering Section ATTACHMENT
Offlee For EMcellenee
structure Proposal
6- 14- 91
Stete Engineer
Stela
Traffle Engineer
Orade 25
II Direct Reports
AdminIstrative Admlnstratlve
Assistant Seereter)' It
Orade 17 Grade 13
I I I I I I
TRAFFIC STUDIES TRAFFIC DESIGN TRAFFIC RECORDS TRAFFIC ELEC. TRAFFiC PROGRAMS Tr. Tref. Eng.
DESION Supv.
Grade 23
TransportatIon Tran. porlalon EDP technIcal Transportation Traffic
Traffic EngIneer Traffic Englne. r Support Spec. III TraffIc Engineer EngIneer III
Supervl. or Supervisor Supervisor ( Ne.)
Grade 23 Grade 23 Grade 23 Orad. 23 Orade 24
STAFF ADDITIONS:
TOTAl FTE's = 8 FTEs
79
Analyst
Orade III
Tech II
Orade 16
D/ C Tech
] Onde ' 5
ns
Tech II
." do 16 .
AT"
TRAFFIC STUDIES
Trans. Traf. Eng.
Supervisor
Gnde 2)
7 DI rect Reports
Secretary
Gnde II
r r I I I
Transportatlol'l Tnnsporlilion Transportation Transporhtlon Transportation Trans. Eng.
Eng. Special hit Eng. Specialist Eng. Specialist Eng. Specllliist Engineer I . Grade 22
Orade 2. Orade 2. Onde 2. Orade 2. Grade 22
I
] DlrectlReports
I I
4 Direct Reports ] Direct Reports 5 01 reel Reports , . • Trans. Eng .
Specialist
Grade 20
Traffic Studln Treffl c Stud I.. Trefflc Studies Tnfflc Studl ..
Analyst Analyst Analyst Analyst
Orade III Onde ' 8 Orade 18 Onde III
Trans. Eng.
I Specialist I Engl
--. I I Engl Plllnsl I I Grade 2'
1 Id Tr udy
Tref. F1el~ i
D/ C Tech
Grade 15
Tnf. Field
D/ C Tech
Grade 15
Tnf. Field
D/ C Tech
Gnde 15
Traf. Field
D/ C Tech II
Grade 16
TDre/ Cf. TFechhll,,' J'"
Grade 15
Traf. Field
D/ C Tech
Grade 15
Tref. Field
D/ C Tech
Gnde 15
75 b
TRAFFIC DESIGN
Trens. Trer. Eng.
Superylsor
Grade 23
ATTACHi' 1ENT
· r
Trensportatlon
En,. Tea. Leader
Orade 22
I
4 DI ract Reports
I
Transporhtl on
En,. Spec. ..
Orada 21
Englnaar Plans
Tech III
Oreda 18
En, lnaer Plans
Tech II
Orada 16
En, lneer Plans
Tech II
Orade 16
5 Direct
I
Transportation
En,. Tea. Leader
Orade 22
I
4 Direct Reports
I
Transporhtlon
Eng. Spec.
Orade 21
En, lneer Plans
Tech III
Grade 18
Engineer Plans
Tech II
Grade 16
Engineer Plens
Tech II
Orade 16
Reports
Secrehry
Grede 11
I
TransportaUon
Engineer I
Grede 22
I
3 Direct Reports
I
Transportation
En,. Spec.
Orede 21
Engineer Plens
Tech III
Grade III
Contrach USJIlIl.
Specialist.
Grede 18
Transport. etlon
Engineer I
Grade 22
Trensportetlon
Engineer I
Grede 22
Transport. atlon
Engineer I
Grade 22
I
AdIIIln. Support
Supv. II
Onde 16
Reports
TRAFFIC RECORDS
EDP Tech. Sup.
Specialist III
Grade 23
7 DlrectlReports
1
EDP Specialist I
Grade 2e
Secretary
Grade II
I
Trans. Eng.
Compo Appl.
Grade 17
ATTACH!> 1ENT
Res. stat.
Anal. III
Grade 18
Information Proc.
Specialist III
Orade ' 3
I
Information Proc.
Specialist III
Onde ' 3
I
Information Proc.
Specialist III
Gnde 13
I
Information Proc.
Specialist II
Grade ' I
" I
Information Proc.
Specialist II
Grade II
1
Information Proc.
Specialist II
Gnde II
T
Information Proc.
Specialist II
Orede ' I
I
Information Proc.
Specialist II
Gnde ' I .-
Information Proc.
Specialist II
Orade I'
I
Information Proc.
Specialist II
Grade I' .-
Information Proc.
Specialist II
Grade II .-
, -;- n; o;~ at I o~ ; roc. 1
Spechll~~ II 75 d
Res. stat.
Analyst II
Grade 17
Res. stat.
Anal. II
Grade 17
TRAFFIC
£ LECTRICAl
D£ SION
Tr. Tra'. £ ng.
SupervIsor
Gnde 23
9 DIrect I Reporh
Secretary
Grade II
Tr. Tra'. £ ng.
Team leader
Grade 22
Tr. Tra'. £ ng.
Tealll leader
Grade 22
Tre'. £ ng. Spec.
Grade 2.
Tr. £ Iec.
DesIgn Tech
Grade 18
Tr. £ Iec.
Des Ign Tech
Orade 18
£ ng. ' Ians
Tech II
Grade 16
£ ng. ' Ians
Tech II
Grade 16
£ ng. ' Ians
Tech II
Grade 16
75 e
ATTACHMENT
TRAFFIC
PROGRAMS
Transportation
Eng Inur II I
Grade 24
L--
Some positions established
In District I for FMS should
be transferred to this unit.
The unit responsible for FMS
development, new products
evaluation, ISTEA program, T. E.
manual, STDS policies &
procedures committee within
Traffic Engineering.
Intra- agency committee Is currently
developing recommendations for ISTEA.
The State Engineer's office should
provide some guidance with the
development of this unit to help
Incorporate traffic engineering Into
transportation processes.
75 f
ATTACHMENT
# 34 ~ STRUCTURES SECTION
Current Situation
The Structures Section currently operates underfive organizational units: 4050,
4051, 4052, 4053, and 4059. The administrative functions are centralized
and performed by two secretaries under the direction of the Assistant State
Engineer- Structures.
• Org 4050 is an administrative org responsible for management of the
section and administrative functions.
• Org 4051 - Bridge Design Services is responsible for review, bridge design,
and technical support.
• Org 4052 - Bridge Drainage Services is responsible for design and review
of bridge and highway drainage.
• Org 4053 and 4059 - Bridge Operations Services is responsible for bridge
construction liaison with Districts, bridge foundation design, and bridge
maintenance inspection.
Impact
• The Bridge Review Branch in Org 4051 is experiencing staff turnover and
has difficulty in maintaining review schedules.
• The Bridge Construction Branch in Org 4053 has an overlapping function
with engineers in Org 4051, Bridge Design. There is loss of continuity in
project knowledge when the project transfers from design to construction.
• The automation of detailing requires more expertise in functions related to
the CADD system, while the same automation requires fewer positions.
• There is a high turnover of personnel in the Grade 20 designer positions in
the Section; the character of the work in project management requires
greater expertise.
• There is a strong need for technical specialists to assist the Section as a
whole in computer hardware and software functions.
76
Recommendation
• Reorganize the Structures Section into a single organizational unit with six
sub- functions:
Bridge Design Unit I
- Bridge Design Unit II
- Bridge Design Unit III
- Bridge Drainage Services
- Bridge Technical Services
- Bridge Management Services
•
•
•
•
Combine the current functions of bridge review, bridge design, and bridge
construction into three equal Bridge Design Units as Bridge Design Services.
Combine Drainage review functions in one unit by transferring two similar
positions in Statewide Project Management Section.
Upgrade the Bridge Detailer II positions to Grade 18 and assign more duties
and responsibilities.
Reorganize the Technical Support Branch and the Bridge Foundation Branch
into a new Bridge Technical Services, and increase technical capabilities.
New staffing for each unit:
•
•
Bridge Design Service (
3 equal units)
Bridge Drainage
Services -
1 Bridge Engineer II supv.
4 Bridge Engineer I
3 Bridge Designer
3 Bridge Design Technician
1 Bridge Engineer II supv.
3 Bridge Engineer I
4 Bridge Drainage Designer
* 1 Bridge Engineer II
* 1 Bridge Drainage Designer
Gr 23
Gr 22
Gr 20
Gr18
Gr 23
Gr 22
Gr20
Gr 23
Gr20
* These positions are to transfer from SPMS to Structures Section
77
• Bridge Technical
Services -
• Bridge Management
Services
Benefit
1 Bridge Engineer II supv.
2 Bridge Engineer I
1 Brg. Foundation Engineer
1 Bridge Designer
2 Trans. Engr. Specialists
1 Bridge Engineer III
5 Bridge Engineer I
5 Bridge Inspection Tech.
1 Bridge Detailer
Gr 23
Gr 22
Gr22
Gr 20
Gr 20
Gr24
Gr 22
Gr 15
Gr 15
• Combining the bridge review and bridge construction functions with bridge
design will improve efficiency, reduce turnover, and will provide for " cradle
to grave" project continuity.
• The reorganization reduces layers of management and increases span of
control.
• Combining drainage functions from SPMS will result in more efficient use
of existing resources and will strengthen the function sufficiently to provide
all design review and scour evaluation.
• The use of automated detailing with enhanced staff capabilities will improve
production of drawings.
• Seven fewer Grade 20 positions along with a modest increase of 3 Grade
22 positions will reduce turnover problems, improve morale and provide
advancement opportunities.
• The reclassification of detailers from Grade 17 to Grade 18, along with an
overall reduction of two positions, results in only about $ 1,400 in increased
costs.
• The overall reduction of 9 FTE's results in an approximate savings of
$ 233,400. Additional ERE @ 30% adds $ 70,000 for a total estimated
savings of $ 303,400.
78
# 35 - · HIGHWAYS DIVISION - TECHNICAL TRAINING
Current Situation
There currently exists a lack of coordinated technical training in the Highways
Division. ADOT has been using Central Arizona College ( CAC) for Basic and
Advanced equipment operator training classes ($ 273,219 - 7/ 91 to 11/ 92).
Engineering districts have been performing technical and safety training on an
" as needed" basis without regard to overall departmental needs.
Impact
• ADOT staff in the Districts are not receiving consistent, current, up- todate
technical training in a manner which is customer friendly
• ADOT does not have a documented, quality, equipment operator training
program
• There is a demonstrated lack of technical and safety training occurring
• Mandatory training requirements are frequently met with inappropriate
training courses
• There is a lack of in- house, trained technical instructors
• Frequently, training courses are available only in the Phoenix area
• There is an increased potential for lawsuits and accidents due to a lack
of technjcal/ safety training
• Costs of training are considerably increased by requiring district staff to
travel to Phoenix rather than training staff traveling to districts
• The validity of existing technical training programs, or the cost of not
having new/ necessary technical training is not currently evaluated
Recommendation
ADOT needs to focus resources on providing a quality, consistent technical
training program for the Highways Division by:
79
Benefit
• Establishing in policy that technical training for Division staff is the
responsibility of the State Engineer
• Creating a formal, statewide technical training program by establishing
the Technical Training Service under · the direction and control of the
State Engineer's Office
• Identifying the funding source and percentage of federal funds that
should flow through the Technical Training Service to be used
specifically for technical training
• Creating a Training Officer HI position to manage the daily functions of
the service
• Creating a Training Officer II position to develop and implement an inhouse
Subject- Matter- Expert Technical Instructor training program ( TrainThe-
Trainer). This position requires an expert on curriculum development
and instructor techniques
• Having the Technical Training Service manager evaluate the
effectiveness of District and Equipment Services Training Officer
positions
• Creating 2 Training Officer I positions ( contract only) to conduct basic
and advanced equipment operator training ( on- site in the Districts) and
eliminate the Central Arizona College training program. These positions
should provide " expert" on- the- job training to potential operators
• Create 2 Training Specialist ( contract - if necessary) positions to develop
and coordinate various technical training programs ( ex: NICET, etc.)
• All Training Officer I's in the Highways Division ( 4 in districts and 2 in
Equipment Services) should report directly to the Technical Training
Service Manager
• Increase utilization of local community college participation in Highway
Division training programs.
• ADOT will have a standardized and comprehensive technical training
80
program to meet Division specific training needs
• Training costs should be reduced by having technical training provided
by " traveling" subject- matter- experts
• Technical training courses will increase in number and be more directly
related to job specific applications
• Improved utilization of Equipment Services and District Training Officers
• The Highways Division will have a centralized, coordinated assessment
of Division/ District/ Section technical training needs
• Improved technical training will increase the life/ usability of ADOT
equipment due to a comprehensive training program focusing on
operation and maintenance of equipment.
Costs/ Savings
• The creation of 6 new FTEs is estimated to cost ( with ERE) $ 231,939.
This is a " high" estimate due to utilizing " contracts" to provide expert
trainers rather than ADOT employing full- time trainers.
• The total elimination of the CAC contracts would result in an
approximate $ 41,000 savings ( with the creation of new FTEs) to provide
more and better training than CAC now provides.
81
BULLET POINTS ISSUES
The following items have been identified as areas for potential study by internal ADOT
Quality Improvement Teams:
1. Project Management Concept: ADOT should organize its Highways Division
under a Project Management philosophy. This concept would ensure that one
individual - a project manager - has cradle- to- grave responsibility for ADOT
projects. The concept will necessitate maintaining a certain number of
functional silos, which will be responsible for providing the internal expertise
needed by the project managers to draw on as required ( this concept is
currently being developed jointly by Project SLIM and the ADOT Highways
Division).
2. Privatization/ Reliance Qn Consultants: ADOT should develop a formal model
to assist management in determining when to contract out a particular service
and when to do it in- house. It appears that the decision to contract out is
sometimes based on whether or not employees like or dislike certain tasks, and
not necessarily on cost- effectiveness. It is not apparent whether a decision to
contract out a service formerly done in- house is captured as a savings in FTE
reductions, allows for other work to be done, or merely reduces the workload
of the people formerly doing that activity.
Another issue related to contracting out for services concerns the reliance by
ADOT on the engineering consultant community. A paradox exists here
because we frequently hear in our interviews that ADOT must keep a core
group of engineers in order to maintain needed expertise within the Agency.
At the same time, however, we often hear concerns expressed about having
to " wean our~ elvesoff" the consultants, and about not having the expertise to
do certain jobs without the consultants. This suggests that ADOT does not
have the expertise in certain areas to begin with, so maintaining expertise in
those areas is not the central issue. The issue appears to be deciding whether
to build the expertise internally or to contract out to organizations already
possessing that expertise.
3. EngineeringITechnical Expertise vs. Managerial/ Leadership Expertise: The
overwhelming majority of managers within the Highways Division are
professional engineers. The orientation and skills necessary to succeed as an
engineer, such as specialization, detail- orientation, and a methodical nature can
sometimes conflict with the skills necessary to be an effective leader ( wide
vision, flexibility, delegation, motivation, etc.) , particularly in a TQM
82
environment.
4. The Agency's Ability To Effectively Manage The Current Level Of QPI
Activity: ADOT has at least 64 Quality Teams analyzing approximately 300
issues. This may be an excessive amount given the communication and
coordination problems that have surfaced; the drain on employee time and
productivity; and the difficulty some teams are having implementing
recommendations.
Through our working relationship with 8 of these internal teams, we have
identified some of the relative strengths and weaknesses of external teams
( SLIM, Ernst & Young, etc.) vs. the internal QPI teams. The internal teams
have an advantage over an external group in identifying and flow charting major
processes, and gathering feedback from internal customers regarding obstacles
to improvement. An external team appears to be superior in the areas of
gathering input from outside customers and constituencies; recommending
alternative structures, processes, and missions; quantifying dollar savings
resulting from recommendations; and implementing recommendations through
internal teams ( Note: ADOT is currently addressing the coordination and
communication problems of the internal teams described here).
5. Asset Utilization: The District One ( metro Phoenix) Equipment Services vehicle
maintenance facility is substantially under- utilized. The facility contains two
buildings with a total of 40 vehicle bays, and only one 8 hour shift is run. We
believe this facility has the potential for becoming a central maintenance point
for all state government vehicles in the Phoenix metropolitan area. There is
currently a separate cross functional OEG/ ADOT/ DOA team reviewing this
subject.
6. Self- Imposed Service Levels: The team has identified a tendency by ADOT to
impose service levels on itself that exceed the norm, particularly in light of the
fact that the Federal Highway Administration ( FHWA) does not mandate any
specific levels of service in regard to the frequency of services provided.
Examples of this are in the areas of lab inspections, materials testing, and
inspections of construction sites. .
7. Fragmentation of Automation Systems: Our review of ADOT has revealed a
multitude of computer systems operating which cannot communicate with one
another, and which do not appear to be part of any master automation plan
( FAST, EMS, PECOS, CMP, TRACS, etc.). Another area of concern is the
pattern of recruiting under- qualified people to work with automation systems,
83
' providing them with on- the- job training - rather than hiring someone with the
needed expertise.
8. Policing of Overweight Intra- state Trucks: ADOT engineers indicate most of the
damage to our road system is done by trucks, particularly those which are
operating in excess of the legal weight ( one overweight truck can result in the
same amount of wear and tear on the road as 10,000 cars). Most of the
enforcement against overweight trucks is done at the ports- of- entry, which
affects primarily interstate trucks. We believe there could be significant savings
in highway maintenance costs if the Department of Public Safety made a
concerted effort to cite overweight intrastate trucks operating on Arizona's
highways. This enforcement activity should be tied to ADOT's road
assessments to determine which areas are being impacted more than others.
9. Decentralization/ Empowerment to Districts: We believe improvements to
Agency effectiveness will come from pushing down authority in the Division to
the District Engineer level and lower where applicable. The current " State
Office" programs, which serve as the centralizing force, need to be renamed to
symbolize more precisely their true function - to provide technical and general
support to field operations.
10. Image of ADOT: For a variety of reasons, ADOT is laboring under a public
image problem today. We suggest that the agency utilize its internal PR
capability ( videos, publications, presentations, etc.) to help counter this public
perception. Public Service Announcements ( PSAs) should be produced
showing the value- added work of highway workers, snowplow drivers,
engineers checking bridges for structural damage related to flooding, etc. The
campaign could build on the " Highway Workers - Give Them a Brake" campaign
ADOT currently uses.
11. Consolidate and reduce the number of orgs. statewide where appropriate
12. Appropriate personnel classifications - Reclassify personnel division- wide to
their appropriate job classification
13. Overtime/ backlogs -. Review overtime/ backlogs for systems improvements
14. Contracting levels vs FTE levels - Review benefits and related costs
15. Isolated camps - Review for elimination
84
16. Life cycle costs - More emphasis in the development phase
17. Roadside Development - rest areas: fewer & more appropriate design
18. Landscaping - Consider numbers and types of plants during design phase
19. District 1 - Contract out all of maintenance ( pilot)
20. Cost benefit analysis of landscaping in district 1 ( ADOT says 25% less for
them)
21. Selected rest areas for privatization ( revenue enhancement)
22. Consider maintenance costs/ construction during design phase
23. Labs - unnecessary tests/ duplication/ outside inspections
24. Quality Assurance Program - Under review
25. Increase privatization of testing
26. Accident reports should be checked for completeness prior to microfilming to
eliminate rework.
27. Establish a DUIT team to study work performed by Transportation Engineer
Specialist in Traffic Electrical Design to determine if Engineer should be required
for the position.
28. Annual Road Assessment - Review for validity, subjectivity, continuity, and
duplication.
29. Blue Stake Process - Consider partnering with Blue Stake centers to reduce
unnecessary inspection requests
30. Permits - Explore feasibility of charging for all permits
31 . Billboards/ sign revenue ( increase)
32. Partner with law enforcement jurisdictions to get complete accident reports the
first time.
85
33. Equipment utilization - Office equipment, vehicle to FTE ratio, etc.
34. Land Leases - Review for possible sale/ rental increase
35. Use of prison labor - Explore feasibility of expanding use of prison labor
( Signs/ labor intensive activities/ locations)
36. Contracts
• New contracts should contain flexibility to add newly completed miles
• Cost- benefit model for contracting vs. in- house processes/
• Expand contracting - systematically analyze for new opportunities ( signing,
for example)
37. Provide staff authority to go along with responsibility.
38. Increase utilization of video/ conference calls to reduce travel time,
expenditures, etc..
39. Modify hard hat requirement - Limit wearing requirement to overhead work only
40. " Pima" system analysis - Review for expansion/ cost effectiveness
41. Procurement - cost of buying on vs. off contract ( vendor not available locally)
42. BTS forms, etc. - eliminate duplication of PECOS
43. Expand re- cycling and salvage of items sitting in maintenance yards
44. Investigate value of bi- weekly vehicle reports
45. Exclude up to 1%- 5% of maintenance budget from reversion to general HURF
fund
46. Review arbitrary cap of maintenance budget
47. Measurement of field maintenance quality of work - Establish a measurement
for quality of maintenance work
48. Centralize ADOT technical library services
86
49. " Adjust required site visit for water/ waste water facilities
50. Lost materials report - Monitor dollar amount of loss
51. Decentralize permits to districts
52. Trainers should be " hands- on" experts to provide training- not merely
administrators
53. Mandatory Training - Require/ provide job specific technical training for district
staff
54. Billing process - requisitions and supplements by orgs
55. Higher level of authority to Area Engineer/ Maintenance Superintendent
56. Drop ship large orders ( possibly all) of traffic signals
57. Buy common items locally
58. Make all ISG/ JCL printouts by request only
59. Cross train signing & striping people to operate snow plows ( review pay
grades)
60. DPS - Training to DPS will reduce/ eliminate unnecessary call outs of ADOT staff
62. Put traffic engineering into districts
,
63. Inter- governmental Agreements - Review inter- governmental agreements with
cities and counties to maintain roads ( does ADOT need this road/ agreement?)
64. Establish standardized specifications - ( ie) Establish 1 type of guardrail to be
used until the year 2000 then upgrade to latest. Consistent as possible
65. Improve hiring process - Empower local units to hire more quickly
66. Cross train Information Processing Specialists to work on all ( DPS, local, county
and fatality) reports and mail procedures.
67. Establish feasibility of contracting out a portion ( or all) of Photogrammetry
87
Services
68. Review feasibility of utilizing portable ( one- man) Global Positioning Technology
to reduce the size and cost of survey teams.
69. Develop a system ( either a billing or a reporting system) to create an awareness
within ADOT of the expenses attached to using the aircraft.
70. Create a revenue flow through marketing ADOT aircraft as a passenger service
to State Government. Will increase usage rate of both aircraft.
71. Provide total quality and manager training for those in supervisory positions.
72. Eliminate ADOT- provided housing where private sector housing is available
within a reasonable radius.
73. Hold consultants to ADOT standards, eg., use same signing with consultants
as does Traffic Engineering Section. ADOT Engineering Records can supply
these to consultants on disk. Subcontractors are not always aware of this
resource availability.
74. Update computers in Records for on- line corrections quickly and to flag locator
problems,
Click tabs to swap between content that is broken into logical sections.
| Rating | |
| TITLE | Project S.L.I.M. report on the Highways Division, Arizona Department of Transportation |
| CREATOR | Arizona. Office for Excellence in Government. |
| SUBJECT | Arizona--Highway Division--Appropriations and expenditures; Government productivity--Arizona; Arizona--Economic policy; |
| Browse Topic |
Government and politics |
| DESCRIPTION | 126 pages (PDF version). File size: 4097.118 KB. Governmental reorganization. Project SLIM report. Project S.L.I.M. report. Project SLIM related. Project S.L.I.M. related. |
| Language | English |
| Publisher | Arizona. Office for Excellence in Government. |
| TYPE | Text |
| Material Collection |
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| Acquisition Note | Publication or link to publication sent to reports@lib.az.us |
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| DATE ORIGINAL | 1993-08-01 |
| Time Period |
1990s (1990-1999) |
| ORIGINAL FORMAT | Paper |
| Source Identifier | GV 80.2:H 43 |
| Location | ocm29900856 |
| DIGITAL IDENTIFIER | GV_80_2_H_43.pdf |
| DIGITAL FORMAT | PDF (Portable Document Format) |
| DIGITIZATION SPECIFICATIONS | Digitized into PDF form through scanning at the Records Management Division, Arizona State Library. |
| REPOSITORY | Arizona State Library. Archives and Public Records--Law and Research Library. |
| File Size | 4097.118 KB |
| Full Text | GV 80.2: H 43 COpy 2 CiOVERNOR'S OFFICE FOR EXCELLENCE IN GOVERNMENT Report on the · H. i. I. I.~ II• l. 1ili.$ io. 1I Arizona Depil" tlll~ I~ I~ Transportation ." " ..... " ",. August 1, 1993 TABLE OF CONTENTS TITLE PAGE Transmittal Letter. . . . . . . . . . . . . . . . . . . . . . . . . . . .. IV ADOT Acceptance Letter , . . . . . . . . . . . . . . . .. V Executive Summary 1 List of Recommendations 12 Equipment Services 1. Preventive Maintenance Scheduling 12 2. Equipment Management Systems .. , .. , .... ,........... 13 3. Veeder Root/ Cardlock Systems , 15 4. Equipment Surplus/ Obsolete Parts 17 5. Major Equipment Rebuilds , , . . . . . . . . . . . . . 20 6. Motor Pool Replacement Policy 22 7. Equipment Replacement Policy , 23 8. New Car " Get Ready" .. , 25 , RIGHT- OF- WAY SECTION 9. Corridor/ Alignment Participation 26 10. Commitment To Five Year Plan " 28 11. Limited Change Orders After 30% Phase ,, 30 12. Policy For Privatization/ Consultant Use , ..... ,........... 32 13. Limited Advance Acquisition , , 35 14. Statute Changes For Acquisition And Disposal 37 15. Recovery Of Incurred Costs , , ,42 ' 16. Combined Consultant Use For Plans 43 17. Property Management Privatization 45 18. Right- of- Way Issues ( Internal ADOT Team) 47 TRAFFIC ENGINEERING 19. In- House Traffic Control Design 48 20. Studies And Data Collection To Districts 50 21. Traffic Engineering Role .. . . . . . . . . . . . . . . . . . . . . . . . . . . 51 ENVIRONMENTAL PLANNING 22. Environmental Clearance Process , , 52 ORGANIZATIONAL STRUCTURE/ STAFFING 23. Highway Division Macro Structure ( Internal ADOT Team) ,. 53 24. Equipment Services Section " , , 54 25, Urban Highways Consolidation ( Internal ADOT Team) .", 56 26. Materials Section ..•.. ,., " .. , , 57 27. Right- of- Way Section .......•... " .. " , , , 60 28, Construction Section •.... , 62 29. Construction Staffing ...,.......................... 64 30 Construction " Shelf" Positions .. , . . . . . . . . . . . . . . . . . . . . . 70 31. Traffic Operations , , 71 32. Districts 1- 4 Field FTE Reductions 73 33. Traffic Engineering Section , 74 II 34. Structures Section 76 35. Highways Division Technical Training 79 List of " Bullet Point" issues 82 Exhibit # 1 Exhibit # 2 Exhibit # 3 Exhibit # 4 Exhibit # 5 Exhibit # 6 Summary of Recommendations and Savings Matrix ... 89 OEG/ ADOT Partnering Agreement . . . . . . . . . . . . . .. 91 Team Activity Matrix 93 Team Work Plan 104 ESt Project Description " 107 Right- of- Way Recommendations Research Material . . .. 112 III FIFE SYMINGTON GOVERNOR OFFICE OF THE GOVERNOR OFFICE FOR EXCEI, I, ENCE IN GOVERNMENT 1700 West Wasbiogtoo, Suite 300, Pboeoix, Arizona 8SOO7 • ( 602) 542- 7546 • Fax ( 602) 542- 1220 June 21, 1993 Mr. Larry Bonine, Director Arizona Department of Transportation 206 South 17th Avenue Phoenix, Arizona 85007 Dear Mr. Bonine: The Governor's Office For Excellence In Government's Project SLIM Team has completed its review of the Arizona Department of Transportation Highways Division, and we are pleased to present to you our report of findings and recommendations. Our review was conducted from August, 1992 through June, 1993. In total, we identified benefits of $ 35 million for the Highways Division, of which $ 14.5 million is annual cost reduction, and $ 20.5 million is annual cost avoidance. We wrote 35 formal recommendations, and identified 78 " bullet- point" issues that should be considered by internal ADOT Quality Teams as potential areas for improvement within the Division. The methodology used by this team relied heavily on input from ADOT staff at all levels, and every effort has been made to achieve " buy- in" from each of these levels. The team was involved in 102 meetings and 11 formal presentations' held for the sole purpose of developing a consensus between ADOT staff and the Office For Excellence. Therefore, we believe the recommendations contained in this report are realistic and implementable. We thank you and all of the ADOT staff who assisted us in this endeavor, as the vast majority of our recommendations were first articulated by ADOT employees, customers, or constituents. Sincerely, IV ARIZONA DEPARTMENT OF TRANSPORTATION 206 South Seventeenth Avenue - Phoenix, Arizona 85007- 3213 Phone: ( 602) 255- 7226 - FAX: ( 602) 255- 6941 FIFE SYMINGTON Governor LARRY S. BONINE DireclDr June 30, 1993 Mr. Tim Boncoskey, Director Governor's Office for Excellence 1700 West Washington, Suite 300 Phoenix, 5f5007 Dear Mr. Jo'~ ey: We have received the SLIM report for the Highways Division and concur with the findings and recommendations that have been detailed by your staff. Mr. Marcum and his team should be commended for their efforts and their willingness to work with our staff on some very ambitious issues. The activities of this SLIM team have been a great compliment to our Quality and Productivity Initiative here at ADOT. We will immediately begin the implementation of these recommendations and the additional issues identified in this report. We look forward to having your staff assist us through tJ1e next year with the Administrative Services, Aeronautics and Transportation Planning Divisions. Sincerely, ~ LSBrrRWljs v HIGHWAYS AERONAUTICS MOTOR VEHICLE PUBliC TRANSIT ADMINISTRATIVE SERVICES TRANSPORTATION PLANNING EXECUTIVE SUMMARY The Governor's Office For Excellence In Government ( OEG) initiated a review of the Arizona Department of Transportation ( ADOT) Highways Division in August, 1992. The review of the Division was conducted by a four person Project SLIM Team and was completed on June 30, 1993. This summary describes the objectives of the review, the methodology used during the analysis, and the recommendations made as a result of the effort. The potential benefits of the recommendations have been quantified, suggested implementation dates provided, and recommendations requiring legislative changes identified. In total, 35 formal recommendations and 78 " bullet- point" recommendations were written, yielding benefits of $ 35 million ($ 14.5 million in annual cost reductions, and $ 20.5 million in annual cost avoidance). The impact of these recommendations on the staffing levels of the Division was a reduction of 729 positions, comprised of 237 funded, full- time positions ( 108 filled, 129 vacant); and 492 non- funded " shelf" vacancies. A summary of recommendations and related benefits is presented in Exhibit 1, on p. 89 of this document. It is the firm belief of the Project SLIM Team that all of these benefits can be realized while maintaining or exceeding the Division's current service levels. OBJECTIVES AND GOALS The overall objective of the OEG review was to evaluate the ADOT Highways Division using organizational analysis and Total Quality Management ( TQM) techniques, identifying areas where operating costs could be reduced and improvements could be made in the delivery of the Division's services. The goals were to streamline processes; improve systems and procedures; eliminate re- work and unnecessary work; and to re- align groups, with related functions. Additionally, the OEG Team facilitated the establishment of organizational structures that could support the long- term goal of continuous improvement. METHODOLOGY The approach used in this study was to take an integrated view of the Division, studying the following varia'bles in each of the areas reviewed: - mission - strategic focus - process flows - technological support 1 information management - organizational performance measurements - quality and service levels ( customer orientation) - organizational structure - logistics and physical assets The analysis began with the team studying " shelf data" provided by ADOT, to become familiar with the mission, size, structure, and responsibilities of the major areas of the Agency as a whole, and of the Highways Division in particular. Next, a " partnering" session was held involving ADOT executive staff; ADOT Highways Division management down to the Section level; OEG executive staff; and the OEG SLIM Team. The purpose of the partnering session waslo identify mutual expectations for the review, and to create an issue/ conflict resolution procedure. A copy of the partnering agreement is presented in Exhibit 2, p. 91. The next phase was an extensive interviewing and surveying process aimed at ADOT employees at all levels, as well as ADOT customers and constituents. The purpose of this exercise was to identify potential areas for improvement within the Division. During the course of the review, the Team conducted a total of 558 interviews ( 447 internal and 111 external). The team also conducted a written survey of 927 highway maintenance personnel; reviewed the ADOT initiated survey of 500 Highway Development Group staff, as well as the Development Group's OPI Senate Survey Analysis Report. The team visited 16 remote locations statewide, and conducted telephone interviews with Department of Transportation representatives from 24 states ( see Exhibit 3, p. 93 ). Through the use of the interview and survey instruments, the Team identified potential improvement areas in the Division, progressing through the various organizational units in the following sequence, as depicted in Exhibit 4 on p. 104: - Equipment Services Section - Highway Maintenance Section - Materials Section - Construction Section - Urban Highways Section - Right- of- Way Section - Location Section - Traffic Engineering Section - Structures Section - Design Section - General Operations Section 2 An issue which needed to be addressed by the Team and ADOT management early on in the review concerned the relationship between the SLIM Team and the many internal ADOT quality improvement teams operating in the Agency. The solution agreed upon was to maintain a flexible approach that resulted in SLIM team members functioning in a variety of capacities with eight internal ADOT Quality Improvement teams, serving as consultants, facilitators, or team members. The SLIM team also requested that six separate " interface" teams be formed by ADOT to support the SLIM analysis. There were four such teams in the highway maintenance area, and two assigned to the Division restructuring effort. As issues were identified, meetings were scheduled with the appropriate ADOT managers at all levels of the Agency in an effort to reach consensus about the issues on which the SLIM Team would focus its efforts. The issues ultimately receiving such consensus were developed into the 35 formal recommendations contained in this document. The balance of the 113 total issues identified became the " bullet- point" recommendations that are found on pages 82- 88. Once an issue was identified as one to be developed into a formal recommendation, appropriate analytical techniques were employed to develop and quantify the recommendation, such as: - identification of error prevention activities - root cause analysis - pareto analysis - force field analysis - process flow charting - assessment of organizational structures: * spans of control * cost to manage * managerial layering *, alignment of mission * overlapping or redundant functions * centralization vs decentralization When this activity was accomplished, meetings were again scheduled with ADOT management at all levels to begin the consensus- building process on the formalized recommendation and any benefits identified. In total, 102 such meetings were held during the course of this study. Additionally, the SLIM Team made 11 formal presentations during the year aimed at building consensus ( see Exhibit # 3, p. 93). 3 The following is an overview of the 35 recommendations that emerged from this process ( with a brief description of their intent): EQUIPMENT SERVICES ( FLEET/ EQUIPMENT MAINTENANCE) 1. Preventive Maintenance Scheduling Establishes a pilot program to lengthen the time and mileage requirements for specific ADOT vehicles. Benefit: Increased staff time available for other work - Dollar Amount not specifically quantifiable. 2. Equipment Management Systems As a result of SLIM recommendations, an internal team with an outside consultant, has reviewed the EMS system for improvement. Benefit: A reduction in FTE level ( see Equipment Services Structure Recommendation, p. 54) and an increase in the efficiency of the Management Information System. Efficiency savings total $ 1.7 million over a three year period, with an initial cost of $ 522,000. Net savings to ADOT is $ 1.2 million over a three year period. 3. Veeder Root/ Cardlock Systems The quantification of work hours reduction due to ADOT's continuing implementation of these systems. Benefit: Contained in the Equipment Services structure recommendation, p. 54. 4. Equipment Surplus/ Obsolete Parts Reduction of surplus/ obsolete parts inventory to 5% or less of the total parts inventory improving acquisition time of parts. Benefit: $ 100,000 cost reduction first year, $ 50,000 per year thereafter. 5. Major Equipment Rebuilds 4 ADOT needs to establish an equipment repair policy to determine the most cost- effective method of repairing major equipment. Benefit: $ 25,000 annual cost reduction. 6. Motor Pool Replacement Policy The purchase of specific ADOT motor pool vehicles will be deferred one year. Benefit: $ 202,000 cost avoidance. 7. Equipment Replacement Policy ADOT needs to establish an equipment replacement policy to guide the purchase of new equipment. Benefit: Equipment will be replaced in the most cost- effective manner. 8. New Car " Get Ready" Makes recommendations to improve the " Get Ready" process for new vehicles. Benefit: Better customer service and an annual cost reduction of $ 108,000 ( savings quantified in Equipment Services structure recommendation, p. 54). RIGHT- OF- WAY SECTION · 9. Corridor/ Alignment Participation Improves the input of the Right- of- Way Section into the identification of highway corridors and/ or alignments. Benefit: Annual cost reduction of $ 419,000. 10. Commitment To Five Year Plan Reduces the number of changes made annually to the Five Year Construction Plan. 5 Benefit: Increases the efficiency of the right- of- way acquisition process. 11. Limited Change Orders After 30% Phase Reduces the amount of change orders after the 30% design phase. Benefit: Annual cost reduction of $ 405,000. 12. Policy For Privatization/ Consultant Use Requires ADOT to establish a policy with specific written criteria to determine the use of private sector services. Benefit: Annual cost reduction of $ 55,000. 13. Limited Advance Acquisition Requires ADOT to establish a policy with specific written guidelines for advance acquisition of real property related to a project that has not been funded. Benefit: Approximate annual cost reduction of $ 2.9 million. 14. Statute Changes For Acquisition And Disposal Requires legislation to be passed to provide ADOT with the ability to abandon real property; to use licensed real estate agents and brokers; and to adjust property values to provide just compensation to property owners. Benefit: 5 year cost reduction equaling approximately $ 19.6 million, of which 19.4 million is cost avoidance. 15. Recovery Of Incurred Costs Allows ADOT to recover incurred costs when conveying property to other federal, state, county, city, or town agencies. Benefit: Revenue enhancement. 16. Combined Consultant Use For Plans 6 Allows ADOT Right- of- Way Section and Design Section to jointly use consultant services for plans. Benefit: Annual cost avoidance of $ 238,000. 17. Property Management Privatization Requires ADOT to establish a policy with written criteria to determine when private sector services are more cost- effective for property management services. Benefit: Reduced operating cost through FTE reductions ( see Right- of- Way structure recommendation, p. 60). 18. Right- of- Way Issues ( Internal ADOT Team) Reduces rework for title reports and consultant services. Benefit: Annual cost reduction of $ 248,000. The complete report by this Team may be reviewed at the Office For Excellence In Government. TRAFFIC ENGINEERING 19. In- House Traffic Control Design Reduces the use of consultants for traffic engineering electrical design. Benefit: Annual cost reduction of $ 300,000. , 20. Studies And Data Collection To Districts Allows the outlying traffic engineering crews to perform some of their own remedial studies and data collection. Benefit: Cost reduction in the travel budget and improved time frames. 21. Traffic Engineering Role Requires Traffic Engineering Section to be a primary participant in the development of the Freeway Management System and ISTEA Safety and Congestion Management Program. 7 Benefit: Re- structures organization and increases staff so unit can better fulfill its mission. ENVIRONMENTAL PLANNING 22. Environmental Clearance Process An analysis of problems in the environmental clearance process that result in project delays. Recommendations included ensuring the quality of outside consultants; conducting project scoping in the project development phase; scheduling formal partnering sessions with affected agencies; and implementing internal ADOT training on environmental issues. This study was lead by an internal ADOT Team - the complete recommendations may be reviewed at the Office For Excellence In Government. Benefit: Annual cost avoidance of $ 619,000. ORGANIZATIONAL STRUCTURE/ STAFFING 23. Highways Division Macro Structure Restructuring of the Highways Division - reduces two layers of management; increases spans of control; improves customer service at the District level through decentralization and empowerment; and establishes Project Management as the new method for conducting the Division's business. Quantification of savings and benefits are described in recommendations # 24- 35. 24. Equipment Services Section Improves services and downsizes the organization by 26 FTEs. Benefit: Annual cost reduction of $ 691,000. 25. Urban Highways . Consolidation ( Internal ADOT Team) Consolidates 2 sections within the Highway Development Group; establishes a Project Management Section; and reduces 9 consultant positions. The full report provided by the ADOT Team is available at the OEG. 8 Benefit: Annual cost reduction of $ 1.5 million. 26. Materials Section Improves services and downsizes the organization by 13 FTEs. Benefit: Annual cost reduction of $ 494,000. 27. Right- of- Way Section Improves services, recommends changes in statutes, and reduces the organization by 18 FTEs. Benefit: Annual cost reduction of $ 582,000. 28. Construction Section Improves services and downsizes the section by 9 FTEs. Benefit: Reduces FTE levels and operating costs ( see Construction Staffing Point, p. 64) 29. Construction Staffing Recommends that ADOT adopt a ratio of 1.3 FTE per contractor million of payments as the standard for staffing construction ORGs. Reduces the organization by 134 positions. Benefit: Annual cost reduction of $ 5.15 million. 30. Construction " Shelf" Positions Recommends that ADOT abolish all vacant positions in 8250 ORGs. that exceed the established construction FTE level. Reduces the organization by 492 unfunded, vacant positions. Benefit: Removing surplus and duplicative positions will bring the data base in- line with authorized FTE levels. 31. Traffic Operations 9 Recommends having a team look at the internal billing process. Downsize the signal, lighting, and sign shops, reducing the organization by 5 FTEs. Benefit: Annual cost reduction of $ 150,000. 32. Districts 1- 4 Field FTE Reductions Each District reviewed their non- construction vacancies and determined which positions could be abolished, reducing the organization by 14 FTEs and $ 367,000. Benefit: Annual cost reduction of $ 367,000. 33. Traffic Engineering Section Recommend increasing in- house traffic control design work. Some remedial studies and data collection recommended to be moved to the districts. Increased role by Traffic Engineering in the Freeway Management System and ISTEA Safety and Congestion Management Program. Includes FTE additions. Benefit: Increase effectiveness for the Division's Traffic Engineering activities. Total net savings to the Agency for all Traffic Engineering recommendations is $ 70,000. 34. Structures Section A comprehensive review of the Structures Section with recommendations to improve, processes, downsize 9 positions, upgrade Detailers from 17 to 18, and create 3 grade 22 positions. Benefit: Annual cost reduction of $ 303,000. 35. Highways Division Technical Training This recommendation develops a coordinated and comprehensive approach to providing technical training to the Division. The establishment of a Technical Training Service with 6 new positions - transferring all current Training Officer I positions ( in the Division) to the Technical Training Service - eliminating or drastically reducing the Central Arizona College contract ($ 273,220). The estimated cost of establishing the new positions for this 10 recommendation is $ 231,939. Benefit: Improved productivity of staff; lowered equipment repair / maintenance costs through reduction in equipment abuse/ misuse. Annual cost savings of $ 41,000. As mentioned, in addition to the 35 formal recommendations, the Team also identified 78 " bullet- point" issues. These are areas that did not receive the necessary consensus to develop into formal recommendations, but were considered to be important enough to list as potential areas for further improvement, and should, therefore, be investigated by future ADOT internal quality teams. Finally, the OEG SLIM Team would like to acknowledge today's ADOT as an Agency that demonstrates a commitment to improving the quality of its products and services through the use of contemporary Quality Management practices. It should be noted that the original ideas for improvements and cost savings contained in this document came from the employees and customers of ADOT. It was the methodology used by the Governor's Office For Excellence In Government that encouraged this input from all levels of the Agency, and developed that input through a consensus- oriented process into tangible opportunities for change and improvement. The employees of ADOT should be commended for their efforts and assistance to the OEG SLIM Team, and for their commitment to continually improving ADOT services to the citizens, residents, and visitors that travel Arizona's Highways. 11 RECOMMENDATIONS EQUIPMENT SERVICE.. 5 # 1 - Preventive Maintenance Scheduling Current Situation ADOT Equipment Services is responsible for scheduling and performing preventive maintenance ( PM) on vehicles. PM intervals are assigned in the Equipment Management System based on class of vehicle. In equij> ment classes 0030- 0290, which includes sedans, pick- ups and 1 ton trucks, the " AIt level PM is set for 4 months or 6000 miles, whichever occurs first. An " A" service consists of oil/ filter change and lubrication. Equipment Services also inspects the vehicle. There are 1475 vehicles in these classes of which 636 ( 43%) are driven less than 12,000 miles per year. Impact Many vehicles are having IIAII PM services performed at 4 month intervals ( or less) even though they have accumulated only 1000- 4000 miles since their last servicing. This results in unnecessary services and increased operating costs for low usage vehicles. Recommendation ADOT Equipment Services should institute a pilot program of 25 vehicles per district and change the IIAII PM service interval from 4 months/ 6000 miles to 6 months/ 6000 miles for vehicles in equipment classes 0030 - 0290. The pilot program will run for 3 years. At this time, the program will be evaluated to determine whether these criteria should be adopted for the entire fleet. Benefit The reduction of the number of IIAII services, through an increased time interval from 4 months to 6 months, will increase the time equipment technicians have available to perform other PM services. The quantification of savings is not available at this time. 12 # 2 - Equipment Management System Current Situation The Equipment Management System ( EMS) has · been operational for eight and one- half years. During this time the system has been upgraded both with vendor supplied enhancements and internal modifications to meet changing needs. • Mechanics report their labor on a daily shop labor document. Each task, work order number, vehicle number and the time required to complete the task are reported . Subsequently, these data are entered into EMS using an on- line transaction. • Receipt of parts requires an on- line transaction that includes the keying of the ADOT stock number. Any issues related to the transaction require the keying of the ADOT stock number and the repair/ PM work order number. • A minimum of two on- line transactions ( three if delay times are recorded) are required to enter data at the close of a work order. Impact • The mechanics spend several minutes per day completing their daily shop labor document. Additional time is spent keying this data into the system. • Parts personnel expend time keying stock numbers and repair/ PM work order numbers into the system. Recommendation • ADOT establish an internal QPI team to further investigate improving the efficiency and effectiveness of the EMS. Note: A team was subsequently established to review the EMS process, and the report was finalized on June 30, 1993 ( see Exhibit # 5, p. 107). The full report. is available for review at the Office For Excellence In Government.. • Equipment Services evaluate the cost effectiveness of using bar code readers for both the parts receipt/ issue processes and the shop labor process. EMS currently contains an on- line cross reference file of ADOT 13 stock numbers to manufacturers part numbers, therefore, bar code labels would not be required. The mechanics would be provided a repair task list with bar codes and the repair/ PM work order number would be printed both in alpha numeric and bar code format. In addition to the time saved filling and keying documents, the accuracy of the task labor data would certainly improve. • EMS staff combine the " MISCL"( work order close), " MIUON"( downtime) and " MISWO"( delay time) transaction into one transaction thereby reducing the time and keying required to close a work order. Benefit • A reduction in FTE levels ( see structure recommendation, p. 54) and a more efficient Management Information System. The recommendations will result in a savings of $ 1,7 million over a three year period, at a one- time cost of $ 522,000 - yeilding a net three savings to AOOT of $ 1.2 million. The $ 522,000 represents start- up cost, and the break- even point on this investment is 9 months. 14 # 3 - VEEDER ROOT TANK SENSORING SYSTEM AND CARDLOCK FUEL DISPENSING SYSTEM This recommendation relates to a previously established and on- going ADOT program improvement. Current Situation Within the current five year tank replacement program being administered by Equipment Services personnel, automated tank level sensors are included in all new tank installations. 21 of ADOT's tank sites have been upgraded. Fuel Dispensing Information Management Fuel tickets are manually collected daily at all fuel locations and sent to the nearest Equipment Services' shop for data entry. Impact • Fuel Storage Tank Measurement/ Monitoring Manual tank measurement, data input into the Tank Integrity Subsystem and the associated data reduction require considerable time. • Fuel Dispensing Information Management Fuel ticket entry and data verification require 19 man hours per week statewide and 20 man hours per week in Phoenix. Recommendation • Fuel storage Tank Measurement/ Monitoring When all tanks have been upgraded to include Veeder Root tank sensors, the Tank Integrity Subsystem will no longer be required and one FTE ( P& PSI) will be eliminated. • Fuel Dispensing Information Management As funds become available and automated cardlock systems are installed at the appropriate sites, the need for fuel data verification will be minimized and an FTE ( IPS III) will be eliminated. 15 Benefit Greater efficiency, reduced FTE levels, and reduced operating costs ( see Equipment Services structure recommendation, p. 54). 16 # 4 - EQUIPMENT SURPLUS/ OBSOLETE PARTS DOA Procurement Rules should be interpreted to allow Equipment Services to use the re- stock/ buy- back program to dispose of miscellaneous parts. It is suggested that a review of equipment should be conducted to determine the specific equipment classes that are continually surplused because they have become obsolete or overstocked, before the re- stocking fee program is utilized. Current Situation The total value on hand of the obsolete parts inventory has gone down dramatically from $ 324,009 on February 28, 1992 to $ 28,5,. 0 on November 23, 1992 ( a ten month period). The average per month value of obsolete parts during these ten months, was $ 105,645. During this time period, the obsolete parts value constituted 6% of the total parts inventory value. Obsolete parts are defined by Equipment Services Section as those parts which are no longer used on vehicles or equipment in the active fleet. Some contracts for parts include a clause requiring the successful bidder to perform a fleet survey for the purpose of suggesting inventory stock requirements for the Equipment Services Section. The Equipment Services Administrator and ADOT Procurement have stated that a report produced by the Equipment Management System determines what inventory stock is required, not the successful bidder. Currently, the majority of parts contracts are Phoenix- based with three to six day delivery times. Equipment Services has previously contacted DOA Procurement to secure permission to utilize contract and oft- contract vendors for the return of miscellaneous parts. Equipment Services \/ yould negotiate a re- stocking or buy- back fee. Three bids would be used to solicit vendors who would be interested in purchasing the obsolete parts. If a part becomes overstocked or obsolete the contract vendor would credit Equipment Services for the initial price, less the re- stocking fee. Example - An average re- stocking fee of 15% would create an 85% credit to Equipment Services. Miscellaneous parts disposed of through DOA Property Surplus are currently bringing a 5% return to Equipment Services. The Department of Public Safety utilizes a re- stocking fee program. and has at times received 100% credit. A. C. C. R2- 7- 803. E. 2.( a)/( 4) of the State Procurement Rules states, " Before surplus materials are disposed of by trade- in to a vendor for credit on an acquisition, the Surplus Property Manager and State Procurement Administrator shall approve such disposal. The Surplus Property Manager shall base this determination on whether the trade- in value is expected to exceed the value realized through the sale or other disposition of 17 such materials." DOA Procurement believes that a change in the interpretation of that rule would constitute a gift to the State of Arizona ( transfer of property for future consideration) if a re- stocking fee resulted in a credit to Equipment Services. They believe that it would appear that the credit was an inducement for the State to condition a future order to collect the payment. It was stated in a June 19, 1990 memo from DOA Surplus Property that, " That appearance is to be avoided." Impact • Stock inventory levels may be kept at a higher level because of the limited accessibility caused by the Phoenix- based contracts. • Cost recovery is not easily tracked because the parts number issued by Equipment Services is not noted on the DOA Authorization form. • Allowing Equipment Services Section to dispose of property through a vendor utilizing a 15% or better restock fee would result in an 85% or better return on the investment rather than the DOA Surplus Property method that resulted in an average of a 5% return on the investment. Recommendations • Obsolete parts inventory should be maintained at a 5% level of the Total Parts Inventory. • The Shop Parts Expeditor, not the successful bidder, should perform the survey tp determine inventory stock requirements. The clause should be deleted from the contract. • The Equipment Services number assigned to parts should be noted on the Property Disposal Request and Authorization form along with the class code to track the cost recovery. • All parts contracts should be written to allow the Parts Expeditor the flexibility to buy off contract when necessary to repair equipment and reduce downtime. In metropolitan areas, where vendors can deliver parts several times a day, inventory should be limited to the 100 most used categories of parts. The successful bidder should have the capability of delivering parts to the shop upon request in the shortest 18 Benefit time frame. • ADOT Procurement should be very specific about when it is not necessary for the successful bidder ( parts vendors) to provide parts statewide as they solicit bids for - ADOT contracts. This should encourage parts vendors in metropolitan areas other than Phoenix to submit bids. ADOT Procurement currently monitors 42 ADOT contracts and 20 State contracts for parts. • Allowing Equipment Services Section to dispose of property through a vendor utilizing a 15% or better restock fee would result in an 85% or better return on the investment rather than the DOA Surplus Property method that resulted in an average of a 5% return on the investment. EXAMPLES: If DOA Surplus Property disposed of the obsolete property, Equipment Services would have received a revenue of $ 6,741 in April or $ 1,090 in September if restocking had been utilized. Equipment Services would have received a credit of $ 114,611 in April or $ 18,530 in September, from parts vendors. • Overhead costs would be reduced. • Tracking of obsolete parts would allow specific cost recovery to be monitored. • Improved availability of parts may reduce turn around time on vehicle repair. • Reducing the Equipment Services obsolete inventory stock on hand to 5% would reduce the amount of credit and could easily be cleared from the vendors' books prior to the end of the contract period. This should address the Department of Administration's concern with the Procurement Rule. • The combination of the lowered inventory, lowered obsolete inventory, improved tracking and the increased return on investment recommendations, in our opinion, will result in some overall reduction in parts inventory expenditures. An estimate of cost savings through these recommendations should result in a savings of $ 100,000 the first year and $ 50,000 annually thereafter. 19 # 5 - MAJOR EQUIPMENT REBUILDS The rebuilding of engines and transmissions should occur in the most cost- effective manner. Equipment repair history documents show a cost savings may be realized by comparing written cost estimates between contracted repair vendors and Equipment Services staff. A written policy would provide the gUidelines for this type of repair. Current Situation After review of selected large equipment repair histories, evidence indicates that in- house repair costs sometimes exceed cost estimates provided by contracted repair vendors. The Equipment Services Administrator indicates that engines are no longer rebuilt in- house on a regular basis. They are rebuilt only as filler work as needed for the Heavy Equipment Repair Technician group. Impact • Lack of a written policy regarding cost efficiency for major rebuilds results in additional repair costs to the Equipment Services Section and equipment users. • No warranty is provided when the work is completed in- house. • Extended downtime for the equipment may cause the user to keep a higher equipment inventory to accommodate the downtime of equipment. • An exp~ nded inventory increases the user's costs for equipment usage and monthly rental. Recommendations • A policy should be written by Equipment Services certified mechanics and Shop Supervisors representing all Districts to guide major equipment rebuilds/ replacements. The policy shall be reviewed by the Equipment Services Administrator, a representative of the State Engineer's Office and a Fleet Manager from outside of ADOT and approved by the State Engineer's Office. 20 • After determining that an engine/ transmission needs major repair, the Shop Supervisor must review the options of: 1) replacement 2) rebuild in- house 3) rebuild by private vendor. The written policy will guide the selection of the option. • The Equipment Shop Supervisors in the Districts should monitor this program utilizing the EMS to track the equipment's repair history and realize the greatest savings to the Arizona Department of Transportation. Benefit Utilization of the rebuild guidelines should produce a minimum cost savings of $ 25,000 annually. 21 # 6 - MOTOR POOL REPLACEMENT POLICY The vehicles utilized in the ADOT motor pool are currently replaced according to the standard replacement policy. Current Situation There are presently 92 vehicles listed as being in the ADOT motor pool. Input from Equipment Services staff suggests that these vehicles should be replaced using a different replacement criteria. Impact Some vehicles are being sold at auction when there is still an opportunity for significant savings by utilizing the vehicles longer than the current specified replacement period. Recommendation Extend the " replacement by age" criteria by one year for vehicles assigned to the ADOT Motor Pool. The following vehicles would not be replaced this year: 3 1984 Compact Sedans 7 1985 Compact Sedans 11 1986 Compact Sedans These seda, ns have an average cost of approximately $ 9,616.00. Benefit There is an estimated minimum savings of approximately $ 201,936 by extending the replacement criteria for the identified motor pool vehicles. 22 # 7 - EQUIPMENT REPLACEMENT POLICY The purchase of equipment by Equipment Services, initiated by either Equipment Services staff or other ADOT personnel should be guided by a written policy. The purchase of unique equipment and equipment purchase priorities are currently guided by the recently re- established Equipment Review Committee. There is, however, no written policy guiding these activities. Routine equipment is requested by telephone or at meetings held at the district level with the Fleet Manager. Current Situation Of $ 20 million paid to Equipment Services in equipment rental last year, a large portion of which was paid by the ADOT Highways Operations Group, Equipment Services spent $ 4.9 million for equipment purchases. The Equipment Review Committee is comprised of the Assistant State Engineer for Maintenance, the Equipment Services Administrator, the four District Engineers or their representatives, and a rotating position currently filled by the Assistant State Engineer for Locations. The Fleet Manager, an attending non- member, is primarily responsible for acquiring equipment. This Committee was recently re- established and has been meeting quarterly to review non- routine equipment requests. Impact • Equipment rental cost the Highway Operations Group about $ 20 million last year and equipment acquisitions cost the Equipment Services Section $ 4.9 million last year. Recommendations • A written policy should be established by the Equipment Review Committee and approved by ADOT management and Highway Division budget staff. The written policy would allow for the oversight of non- routine equipment requests and the review of their cost effectiveness.. The written policy would require the user to justify the need for the equipment, document costs, estimate utilization, and present the options researched. 23 • The Equipment Review Committee should be expanded and formally charged with monitoring the requests and expenditures for non- routine equipment to assure needs are met and that the greatest savings are realized by the Arizona Department of Transportation. • The Equipment Review Committee make up should include the following additional members: Mechanical Equipment Design Engineer Private Sector Equipment Vendor Fleet Management Manager • The four informal District Equipment Review Committees should utilize a similar policy to guide the requests made to the Fleet Manager and prioritized by the Equipment Review Committee. Benefit The formal written policy will provide the Equipment Review Committee with guidelines to ensure cost- effective expenditures for equipment. Monitoring requests and expenditures for non- routine equipment, in compliance with the written policy, will ensure equipment needs are met and the greatest savings are realized by the Arizona Department of Transportation. 24 # 8 - NEW CAR GET READY SHOP - LIGHT TRUCKS AND CARS Equipment Services receives all new light vehicles for the agency and then processes them through the " Get Ready" shop for distribution to the other areas of the Department. Current Situation Each new vehicle must be recorded, licensed, inspected, and have decals, lights, tool boxes, and radios installed as appropriate. In addition, all light vehicles have their wheel alignment inspected by Equipment Services prior to the vehicle being delivered. During the past two years, ADOT's purchase of fleet vehicles has declined due to a reduction in the monies available in the revolving fund. subsequently, the amount of work done by the Get Ready Shop has also declined proportionally. Impact • The processing of new vehicles does not require the same number of staff that were previously required for larger budget expenditures for fleet vehicles. Recommendations • The Get Ready shop be downsized to: 1 Equipment Shop Supervisor 2 Equipment Repair Technicians 1 Equipment Service Assistant. • Within 60 days the Get Ready Shop establish performance standards for the processing of new equipment. Benefit • The reduction of 4 vacant FTE with subsequent vacancy savings of approximately:$ 88,540.00 ( savings identified under Equipment Services Recommendation Exhibit # 1, p. 89). • Employee Related Expenses ( ERE- 22.6%) savings would approximate $ 20,010.04. 25 RIGHT OF WAY # 9 - CORRIDOR/ ALIGNMENT PARTICIPATION Current Situation Right- of- Way Section has limited input over the identification of corridors or alignment of highways. • Corridors are established by the Transportation Planning Division of ADOT and approved by the ADOT Board based on future transportation needs. Impacts • When the highway alignment is designed there is no one on the design project specializing in the cost of the property within that alignment. • Increases workload of Right- of- Way Agent prior to acquisition phase. • Increases the potential for higher project costs. Recommendation Appropriate Right- of- Way personnel should be members of the Project Management Team to assist as needed with the alignment design of the highways. Their role would be to provide a variety of services including the estimated costs of a specific alignment and advise on alignment adjustments that would not affect safety, yet reduce the potential cost of Right- of- Way acquisition prior to the 30% design phase. Benefit • Reduces acquisition costs by purchasing parcels with lower market value. • Reduces potential for litigation involving disputes and damage claims. • Reduces workload of Right- of- Way Agent during acquisition phase. • Eases the acquisition process by reducing negative impacts. • Reduces the potential for higher project costs. 26 Cost Savings/ Avoidance Quantitative cost savings cannot be precisely forecast. Based on discussions with Right- of- Way professionals, a conservative estimate of a 1% savings associated with this process improvement would realize $ 418,850 in 1994 ( the 5 Year Plan identifies $ 12,985,000 for State and $ 28,900,000 for MAG Rightof- Way acquisition). The basis for the estimate is by assigning an appropriate person whose primary concern is the " cost" of right- of- way property, not in merely establishing a dollar figure that is to be used for planning purposes, ADOT will save at least 1% of the money they have allotted for right- of- way acquisitions in 1994. 27 # 10 - " Commitment to 5 Year Plan Current Situation The Right- ot- Way Section has limited input over the 5 year Construction Plan determining the time frame for acquisition and construction. Impact • Right- of- Way acquisition completed 5 years in advance of the originally scheduled construction date may eventually stretch to 10 years in advance ot the rescheduled construction date. • Prolonged property management costs to ADOT ( see # 17 - Property Management Privatization point). • Less revenue available for the Right- of- Way acquisition needs for a highway project that was moved up in the 5 year plan. • Difficult to plan for Right- of- Way staffing needs. • True costs of re- allocating funding between projects because of scheduling changes are not known but may impact available funding for Right of Way acquisition. May be more costly to re- allocate and expend the funds for a new project than losing the funding all together. • Increases the potential for higher project costs. Recommendation ADOT should reduce the numerous changes made annually to the 5 year Construction Plan and coordinate it with Right- of- Way's priority list. Benefit • Reduces the amount of time between acquisition and construction. • Reduces property management costs to ADOT. • Reduces potential for higher relocation and demolition costs. 28 • Improves planning of acquisition schedule. • Improves planning of staffing needs. • Reduces delay to highway user. • Reduces the potential for higher project costs. Cost Savings/ Avoidance Cost savings cannot be precisely forecast ( or estimated). 29 # 11 - LIMITED CHANGE ORDERS AFTER 30% PHASE Current Situation The Right- of- Way Section has no control over the Design Process and the number of change orders affecting Right- of- Way requirements. Impact • Causes delays in completing Right- of- Way planning process. • Reduces public confidence and credibility of ADOT. • Causes delays in completing Right- of- Way acquisition process. • Increases workload on Right- of- Way staff. • Increases the potential for higher project costs. Recommendation Right- of- way requirement changes must be approved by the Project Manager after the 30% design phase. Changes after the 60% design phase must be approved by the Project Manager utilizing Life Cycle Program costs as the determining factor. Benefit • Reduces delays in Right- at- Way planning process. • Reduces delays in Right- at- Way acquisition process. • Reduces workload on Right- of- Way staff. • Reduces the potential for higher project costs. • Provides more quality up- front in the 30% phase. 30 Cost Savings! Avoidance The limitation of design changes is expected to save $ 405,000 per year according to analysis found in the Right- of- Way Requirements OPI report of February, 1993 ( RIW rework due to design change will save $ 297,000; design rework due to RIW requests will save $ 15,000; and reducing consultant rework will save $ 194,000). There were 355 formal change orders in 1991, making the average cost of a change order $ 1 ,425. 31 # 12 - ' POLICY FOR PRIVATIZATION/ CONSULTANT USE Current Situation The Right- of- Way Section has not set a policy to use the services of the private sector. Impact • No system exists to determine when to utilize Right- of- Way staff or the private sector for completion of plans, appraisals, acquisitions, property management and relocations. This creates a higher potential for subjectivity when selecting in- house or contract services. • Cost effectiveness of contracting out services versus those services provided in- house is not measured. • Higher number of litigation cases related to acquisition when acquisition services are provided by Right- of- Way staff compared to the number of litigation cases when acquisition services are provided by private sector. • Increases travel and per diem costs with Right- of- Way staff based in Phoenix traveling statewide compared to using local agents. • Requires a higher baseline staffing level without addressing peaks and valleys of workload. • Continued use of consultants for specific services may affect the Rightof- Way. staff's ability to effectively monitor consultant work. • Increases the potential for higher project costs. Recommendation The Right- of- Way Section should establish a policy with written criteria, including a cost/ benefit formula with a weighting system attached to each criteria, to determine in an objective manner the use and selection of private sector services. A non- compensated temporary committee including ADOT Right- of- Way Staff, ADOT Procurement Staff, non- ADOT Right- of- Way professionals and members of the general public should be responsible for developing the policy. The ADOT Director should approve this policy. The 32 policy must be applied to all major Right- of- Way Section work activities. A tracking system should be established to measure costs of private sector and Right- of- Way Section Staff. Right- of- Way Staff should utilize the minimum appraisal necessary and be held to provide the same level of service as required by the contracted staff. The Right- of- Way Section should utilize the professional services of the ADOT Procurement group to develop all bids and Requests for Proposals. Benefit • Reduces selection subjectivity. • Cost effectiveness will be measurable. • Lower number of litigation cases if there is an increase in the use of private sector appraisers. • Reduces Right- of- Way agent travel and per diem. • Increases section's flexibility to deal with the peaks and valleys of the workload. • Reduces the potential for higher project costs. Cost Savings/ Avoidance The cost of performing an appraisal is dependent upon a number of variables. The cost for a private citizen to obtain an appraisal ranges from $ 250 to $ 500 per appraisal. , The more complex the property, the higher the cost of the appraisal. The contracted or " fee" appraisers have a higher level of technology for research sources available to them along with a greater frequency in the market area. The average cost paid by ADOT to fee appraisers is $ 2,212 per appraisal. The average number of hours per appraisal is 12. The average cost of an appraisal performed by ADOT staff is $ 1,910. The average number of hours is 34. In FY 1991/ 92, 30 appraisals were contracted out and 214 were performed by ADOT., Staff. Utilizing a range of set fees for " fee" appraisals should save a minimum of $ 500 per appraisal. Utilizing the minimal appraisal necessary should reduce staff appraisals by a minimum of $ 448 ( 8 hours X $ 56/ hour) per appraisal. In FY 1991/ 92 these changes would have saved $ 110,822. It is not known how many appraisals will be performed next year by fee or staff appraisers. A very conservative estimate of actual savings 33 ' would be half of the 1991/ 92 figures or $ 55,436. 34 # 13 - LIMITED ADVANCE ACQUISITION Current Situation ADOT has no policy to limit advance acquisition to hardship only purchases until the funding for highway construction has been secured. Impact • Acquisition funds are expended for projects never funded for construction. • Long- term property management responsibilities. • Increased property management costs due to increased inventory. • Public perceives ADOT as poor planners and managers when property is acquired in advance and never used or used more than 10 years later for a highway project. • Increases the potential for higher project costs. Recommendation The Right- of- Way Section, in conjunction with the ADOT Director and Board, should establish a policy that would limit advance acquisitions ( purchases of real property prior to having secured funding for the construction of the highway), particularly non- hardship cases. State Statute 28- 1865, Section 5, Subsection D may need to be statutorily changed to ensure enforcement of the policy, if the ADOT Director and Board are unable to establish a policy. Benefit • Increase of property remaining on the tax rolls. • Reduces ADOT property inventory. • Reduces property management costs. • Reduces relocation costs. 35 • Improved image of ADOT. • Reduces the potential for higher project costs. Cost Savings/ Avoidance Cost savings with this recommendation cannot be precisely calculated. The Chief Right- of- Way Agent agrees that some limitations should result in at least 5% reduction in annual acquisition costs. In 1994, this would save $ 2.9 million based on funding identified in the 5 Year Plan. 36 # 14 - ' STATUTE CHANGES FOR ACQUISITION AND DISPOSAL Current Situation ADOT has not been successful in changing statutes and regulations that contribute to the high cost of acquisition and disposal of excess property. There are three major factors in State Statute 28- 1865 that limit the ADOT Right of Way Section's ability to save taxpayer monies. Those factors are the ( 1) ability to abandon, ( 2) use of licensed real estate agents and brokers and ( 3) methods of acquisition. Impact Ability to Abandon • Limits ability of ADOT to conduct business as the private sector would when abandoning or disposing of property. • Excess property classified as uneconomic remnants remain on the ADOT property inventory indefinitely. ADOT currently does not have a complete inventory list of excess parcels. • Abutting land owners not willing to pay for small, irregular shaped parcels. • Increases long- term property management costs. • Increases administrative workload for Right- of- Way staff. • Increases overall costs of highway projects. Impact Disposal Methods • Citizens typically first utilize the services of licensed real estate agents when looking to purchase houses, buildings and property. They cannot learn of ADOT properties this way. • Limits ADOT's communication and marketing ability of properties available for sale to infrequent brochure mailings and newspaper notices. 37 • Requires greater effort from citizens to become informed on ADOT properties to be auctioned. • Increases administrative workload for Right- of- Way staff to organize auctions and handle transactions. • Increases travel and per diem for Right- of- Way staff • Increases overall costs for highway project. Impacts Acquisition Method • Increases costs to taxpayers when an ADOT improvement project is the cause for an increase in the market value of a property and then ADOT must pay that higher value to obtain the property for that improvement project. • Reduces the amount of highway that can be constructed until more funding can become available. • Increases potential for higher project costs. Recommendation ADOT should seek sponsorship and introduce legislative changes to State Statute 28- 1865, Section 5, Subsections B, G, Land M. ADOT should actively seek input and support from taxpayers for these changes. • Ability to Abandon - State Statute 28- 1865, Section 5, Subsection B needs to be amended to allow ADOT the ability to abandon uneconomic remnant parcels to a willing abutting land owner. • Disposal methods - State Statute 28- 1865, Section 5, Subsection G needs to be amended to allow ADOT the flexibility to use licensed real estate brokers and their services to dispose of properties in addition to the public auction method of disposal. • Acquisition method - State Statute 28- 1865, Section 5, Subsections L and M need to be amended to allow ADOT the ability to use a " Just 38 Compensation" formula for the acquisition of all properties when only a parcel of a property owner's contiguous property will be acquired by ADOT. This compensation formula would allow for a fair profit to be made by landowners, as a result of the State's acquisition of right- ofway property. It is recommended that ADOT hold community forums to jointly develop this legislation with interested groups and individuals, including those representing private citizens and taxpayers. When enough community input is received for a reasonable definition of " just compensation" to be developed, ADOT should pursue the relevant legislative changes. Benefit Ability to Abandon • Allows ADOT to conduct business as the private sector would when abandoning or disposing of property. • Reduces ADOT property inventory. ( Currently, well over 500 excellent parcels identified.) • Increase of property on the tax rolls. • Reduces property management costs. • Reduces administrative workload for Right- of- Way staff. • Reduce~ the potential for higher project costs. Benefit Disposal Methods • Improves service to citizens statewide by making it easier to purchase properties frol11 ADOT • Increases revenue potential by increasing opportunities for citizens to purchase ADOT properties. • Reduces administrative workload for Right- of- Way staff. 39 • Reduces travel and per diem for Right- of- Way staff. • Reduces the potential for higher project costs. Benefit Acquisition Method • Reduces costs to taxpayers. • Allows property owners to be justly compensated for their loss of property. • Increases the amount of highway that can be constructed with less funding. • Reduces land speculation. • Reduces the potential for higher project costs. Cost Savings/ Avoidance Ability to Abandon ADOT does not have an up- to- date inventory of excess lands. It is estimated that there are more than 500 excess land parcels owned by ADOT. A very conservative cost savings to ADOT would be $ 12,500 ( property management at $ 25 per parcel annually). The abandonment would place the parcels back on the tax roll, producing a minimum of $ 25,000 in tax revenue to the State ( 500 parcels valued at $ 500 each with 10% property tax). Cost Savings/ Avoidance Disposal Methods ADOT disposes of excess land, structures and mobile homes by public auction or conveyance to another entity. In FY 1991/ 92 revenues totaled $ 1,789,185. The use of licensed real estate brokers to market and sell ADOT property would conservatively increase revenue to ADOT by 10% ( based on the benefits described above). Using last year's revenue as a 40 base, revenue would increase by $ 178,919. Cost Savings/ Avoidance Acquisition Method Conservatively and without a definitive formula, " Just Compensation" legislation could off- set 20- 40% of the right- of- way costs on transportation projects in undeveloped and developing areas. For example, if the state program funding figures in the current 5 Year Plan and a 30% savings figure are used as a methodology, ADOT could realize a cost avoidance of $ 19.43 million during 1994- 1998 ( 1994-$ 8.67, 1995-$ 2.67, 1996-$ 4.5, 1997 - $ 2.0, 1998 - $ 1.59). However, actual savings will vary based on the length of time it takes to develop a consensus definition of " Just Compensation" and the post 1998 acquisition schedule. In the past, ADOT has presented " before and after" legislation based on the federal land acquisition model as an alternative to reduce the cost of rightof- way acquisition. It is estimated that this " before and after" approach could result in a savings of up to $ 60 million for this same five year period. This approach is still a valid alternative, however, for estimated savings in this report this alternative was not used. 41 # 15 - RECOVERY OF INCURRED COSTS Current Situation The Right- of- Way Section historically has conveyed property to other federal, state, county, city or town agencies for ADOT's original purchase price. Impact • ADOT's incurred costs as owners of the property are not recovered resulting in ADOT subsidizing federal, state, county, city or town agencies. • Increases the potential for higher project costs. Recommendation The Right- of- Way Section should track costs incurred By ADOT and attributable to that property during ADOT's ownership of the property. When the property is conveyed to the agency, the price shall recover the original purchase price and all costs associated with acquisition and relocation costs. Benefit • Increases accountability of costs associated with and attributable to Right- of- Way. • Increases revenue through cost recovery. • Reduces overall cost of highway project. 42 # 16 - COMBINED CONSULTANT USE FOR PLANS Current Situation The Design Section and the Right- of- Way Section each enter into contracts for the use of consultants to complete plans. Impacts • Design and Right- of- Way Sections must each go through the bidding and selection process to hire a consultant. • Increases cost to ADOT since each contract charges overhead cost. • Increases overall cost to highway project. Recommendation Both sections should coordinate their plans' needs and enter into one contract for the use of a qualified consultant to complete both Design and Right- of- Way plans. Benefit • Reduces staff's administrative workload for bidding and selection. • Reduces overhead costs paid by ADOT for two contracts. • Improves communication between sections. • Reduces overall cost of highway project. Cost Savings/ Avoidance During the last fiscal year there were 9 plans contracts in Right- of- Way that potentially could have been combined with Design Section contracts to utilize one contractor. The expertise needed for developing Right- of- Way plans and the expertise needed for developing roadway design plans are vastly different; there are, however, firms that can do both. A combined proposal should weigh the needs of both Right- of- Way and roadway designs equally. The administrative costs of managing two contracts are higher than managing one contract. 43 Eliminating the 43% overhead cost in just half of the projects in 1991- 1992, ADOT would achieve a cost avoidance of $ 237,919 ( 9 projects contracted in Right- of- Way Plans Section at a cost of $ 1,106,599 reduced by 43% then cut in half). 44 # 17 P'ROPERTY MANAGEMENT PRIVATIZATION Current Situation The Right- ot- Way Section's Property Management Program maintains properties and structures ( vacant and occupied by lease) until needed tor the highway construction process. Revenue is generated by this program. ADOT pays a 24% in- lieu tax on those properties that are leased to compensate the counties tor their loss in property taxes. Right- ot- Way staff are responsible tor the administrative duties associated with leases, maintenance contracts, rental revenue collection, relocation and demolition scheduling. Impact • Increases workload ot Right- ot- Way staff tor post Right- ot- Way acquisition duties. • Workload is dependent upon the scheduling ot the projects within the 5 Year Construction Plan. • Increases overall cost to highway project. Recommendation The Right- ot- Way Section Property Management program should be reduced by contracting out, with one private sector provider, the property management function for all rental properties with structures. The Chief Right- of- Way Agent should work with the ADOT procurement staff to establish and process a Request For Proposal ( RFP). The initial bid should only be awarded it the successful bid is more cost- effective than a 5 year average of costs incurred by ADOT providing the same level of service as outlined in the RFP. Staff level should be adjusted appropriately in the new organizational structure it a bid is not awarded. Benefit • Reduces workload ot Right- ot- Way staff tor post right- ot- way acquisition duties. • Reduces the potential for higher project costs. 45 Cost Savings/ Avoidance The cost savings for this recommendation is realized in FTE reductions only at this time. Additional cost savings may be realized it the property management firm selected is able to reduce maintenance costs related to the rental properties. New Organizational Structure - See Attachment Staff Reduction: From 127 FTE's to 109 FTE Cost Savings: $ 582,762 ( quantified under Right- ot- Way Structure Recommendation, p. 60). 46 # 18 · ' RIGHT- Of- WAY ISSUES ( Internal ADOT Team) Reduces rework for title reports and Consultant Services. Internal ADOT team had the lead in this recommendation ( a full report is available at the Office for Excellence in Government). Benefit: Annual cost reduction not duplicative of above recommendations is $ 248,000. 47 TRAFFIC ENGINEERING # 19 - INCREASE TRAFFIC CONTROL DESIGN WORK COMPLETED IN- HOUSE Current Situation Designs are contracted out 90% of the time. A variety of staff are responsible for monitoring these contracts. Impact • Traffic Engineering Section staff have reduced opportunity to develop expertise. • Difficult to monitor contract cost when the Section has no cost figures to compare. • Contractors are charging 150% overhead even when ADOT is providing equipment and office space for contractors. • No Section staff to complete design if contract fails. Recommendation Traffic Engineering should strive to achieve, within 3 years, performing a minimum of 50% of the design work in- house. Additional staff of 7 will be needed to perform at a 50% level. Additional staff should be phased into the Section ( see attached proposed structure for 1994, p. 74). Benefit • Competent in- house core group established. • Good comparison of cost and time frame for contract monitoring. • Experienced staff to complete a project if a contract fails. • Reduction of contract costs. 48 Cost Savings/ Avoidance • Addition of 3 FTE's, at cost of $ 108,329, to perform additional 10% of work in- house first year. Reduction of contractor billing hours by 10% ($ 3M consultant budget) will save $ 300,000. 49 # 20 - · SOME REMEDIAL STUDIES AND DATA COLLECTION DECENTRALIZATION Current Situation The Studies Branch currently performs all but a few remedial studies and data collection for ADOT and all Districts. Impact • Time delays for Districts needing studies completed for budgeting purposes. • Travel for Phoenix- based studies staff. • Time delays for some Traffic Engineering studies when working on District studies. Recommendation • Allows the outlying traffic engineering crews to perform some of their own remedial studies and data collection. Benefit • Improves turn around time for District studies. • More time for Studies Branch staff to perform other studies. • Reduced travel time and costs. 50 # 21 - TRAFFIC ENGINEERING ROLE IN FREEWAY MANAGEMENT SYSTEM AND * ISTEA SAFETY & CONGESTION MANAGEMENT PROGRAM • INTERMODAL SURFACE TRANSPORTATION EFFICIENCY ACT Current Situation The new Freeway Management System is currently the responsibility of District One. The Traffic Engineering Section has played a very limited role in its development. Primary responsibility of the Safety & Congestion Management Program is still under discussion with the Federal government but Traffic Engineering needs toplay · a major · role, in its development and implementation. Traffic engineering is a specialized area unlike civil engineering. Impacts: • Traffic Engineering issues are being addressed by Civil Engineers with less experience in the management of traffic than seasoned Traffic Engineers. • Focus is on the handling of accidents after they occur, not preventing them. Recommendation • Traffic Engineering Section and its appropriate staff should have a significant leadership role in both development and operation of the Freeway Management System and the ISTEA Safety & Congestion Management Program. Benefit • Greater focus on proactive management not reactive response to traffic issues. Cost Savings/ Avoidance: • Staffing increase addressed in structure. • Cost savings cannot be quantified at this time. 51 # 22 - ENVIRONMENTAL CLEARANCE PROCESS ( Internal ADOT Team) An analysis of problems in the environmental clearance process that result in project delays. Recommendations included ensuring the quality of outside consultants; conducting project scoping in the project development phase; scheduling formal partnering sessions with affected agencies; and implementing internal ADOT training on environmental issues. This study was lead by an internal ADOT Team - the complete recommendations may be reviewed at the Office For Excellence In Government. Benefit: Annual cost avoidance of $ 619,000. 52 ORGANIZATION STRUCTURE AND STAFFING # 23 - HIGHWAY DIVISION MACRO STRUCTURE An internal ADOT team working with the Project SLIM Team developed a new organizational structure for the Highways Division, which accomplished the following: • Reduced two layers of management • Increased span of control at all levels • Improved customer services at the District level through decentralization and employee empowerment • Established Project Management as the new philosophy for conducting the Division's business ( quantification of savings and benefits are described in recommendations # 24 - 35) The new structure is expected to enhance the quality of ADOT's service delivery while reducing FTE levels by 729 positions ( 108 filled, 129 funded vacancies, and 492 unfunded vacancies), for a total annual savings to the State of Arizona of over $ 9 million. The macro level current and proposed organizational charts are attached. 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I I I Y ., tmllDlT ID'VI~ I 53 b # 24 - ' EQUIPMENT SERVICES SECTION Current Situation Equipment Services has reviewed their authorized positions and after an assessment of current business practices, and the consideration of some future changes, determined that existing and proposed service levels can be maintained while reducing the current staffing profile. Impact The reduction of these positions will not impact on Equipment Services ability to provide minimum, established levels of service. Recommendation As a result of the in- depth review of staffing patterns the following positions are scheduled to be abolished immediately: Position Number 0084/ 3075AAN 0253/ 5810AAN o199/ 5670AAN 0019/ 5874AAN 0205/ 0683AAN Q055/ 3257AAN 0038/ 0714AAN Q117/ 0737AAN 0119/ 1199AAN Q071/ 0678AAN 10726AAN 10675AAN 0008/ 3750AAN 0263/ 5747AAN 0098/ 0694AAN o139/ 3626AAN o192/ 3325AAN Job Title Clerk Typist II Environmental Health Spec. 1 Accounting Tech. II EDP Prog/ Anal. II Equip. Repair Tech. Equip. Repair Tech. Equip. Repair Tech. Equip. Repair Tech. Equip. Repair Tech. Equip. Repair Tech. Equip. Repair Tech. Equip. Repair Tech. Clerk Typist III Weight & Measures Insp. Facility Support Worker frog. Proj. Spec. II Info. Proc. Spec. II Total of 17 Positions 54 Salary $ 16,062.00 $ 21,584.00 $ 20,278.00 $ 28,435.00 $ 26,993.00 $ 22,135.00 $ 26,993.00 $ 30,068.00 $ 26,993.00 $ 26,993.00 $ 31,258.00 $ 26,993.00 $ 17,699.00 $ 22,974.00 $ 19,142.00 $ 25,182.00 $ 17.755.00 $ 407,537.00 The following positions will not be funded and will be eliminated: 4893 5706 3256 4803 5452 4452 Student Aide Clerk Typist III Equip. Repair Tech. Student Aide Equip. Service Assist. Clerical Assist: Total of 6 Positions $ 4,698.00 $ 14,558.00 $ 22,135.00 $ 4,698.00 $ 17,755.00 $ 11.998.00 $ 75,842.00 These 3 FTE's are to be abolished at future dates as the Equiment Management System is revised and implemented: 0102/ 5555AAE 0244/ 5419AAN 0201/ 3629AAE Benefit Prog. Proj. Spec. I Info. Proc. Spec. III Equip. Utilization Sup. Group Totals/ 26 FTE ERE Addition Grand Total $ 29,203.00 $ 18,891.00 $ 32.626.00 $ 80,720.00 $ 564,099.00 $ 126.922.28 $ 691,021.28 Total combined savings of immediate and projected reductions of FTE's in Equipment Services is $ 691,021.28 annually. 55 # 25 - URBAN HIGHWAYS CONSOLIDATION ( Internal ADOT Team) Consolidates 2 sections within the Highway Development Group; establishes a Project Management Section; and reduces 9 consultant positions. The full report provided by the ADOT Team is available at the OEG. Benefit: Annual cost reduction of $ 1.5 million. 56 # 26 - MATERIALS SECTION The engineer of Materials heads the Materials Section of the Highways Division. The Materials Section conducts research into construction materials and methods, develops pavement sections for use in designing new projects, develops test methods and acts as the reference laboratory for the district and project laboratories. It also designs asphaltic and portland cement concrete pavements and performs tests that cannot be made in the district or project laboratories. The Materials Section monitors the tests performed by the project and the district to see that the laboratories have acceptable correlation of tests and consults with the districts and projects to maintain uniform testing procedures. Special reference tests are prepared and sent to district laboratories to check testing procedures. A program of periodic checking of test equipment used in district and project laboratories is used to maintain the accuracy of the equipment. Current Situation Org 4841 - Testing Services Testing frequencies are being evaluated and revised, and some work processes have and are being changed. Org 4842 - Geotechnical Services Workloads and priorities are being shifted at this time. Materials Section has recommended the reduction of one drilling crew and associated equipment. Some crews workloads justify a reduction in the number of staff performing the work. The Foundation & Geologic Investigation Branch has difficulty meeting schedules for the design section due to frequent breakdowns of old equipment. Org 4843 - Pavement Services Due to changing workloads and availability of contracted specialty services, if necessary, 1 Transportation Engineering Specialist position could be eliminated. 57 Impact Org 4841 - Testing Services As a result of changing testing procedures and priorities 6 positions may be eliminated. Org 4842 - Geotechnical Services As a result of an in- depth review of geotechnical services it was determined that one drilling crew ( 3 FTEs) and associated equipment, and 3 other FTEs could be eliminated. Due to frequent breakdowns of drilling equipment, geotechnical services is experiencing difficulty completing their projects in a timely manner. Org 4843 - Pavement Services Has a vacant Transportation Engineering Specialist position whose requirements may be contracted out. Recommendations The following positions are recommended to be abolished: Org 4841 - Testing Services 1 - Information Processing Specialist III 1 - Transportation Construction Technician II 1 - Transportation Construction Technician III 3 - Transportation Engineering Specialist Org 4842 - Geotechnical Services 2 - Transportation Materials Field Crew Tech I 2 - Transportation Materials Field Crew Tech II 2 - Transportation Materials Field Crew Tech III Org 4843 - Pavement Services 1 - Transportation Engineering Specialist 58 As a result of staff reductions and re- distribution of work, some excess equipment will be turned back to Equipment Services. The following Equipment is recommended to be * eliminated from ADOT's ( Org. 4842) inventory: 1 - Core Drill ($ 1,000) 2 - Pickups ($ 4,000) It is recommended that the drilling rigs for the Foundation and Geologic Investigation Branch be evaluated by Equipment Services for dependability and serviceability. Downtime with the present equipment must be reduced. * This equipment should be sold. Benefit The elimination of the above items, plus support other operating and travel funds, results in an approximate savings of: 13 Positions = $ 351,522 ERE @ 22% = $ 77,335 Travel Reduction = $ 39,555 Equipment Reduction = $ 5,000 Other Operating = $ 20,200 Total Combined Saving = $ 493,612 59 # 27 - AIGHT- OF- WAY SECTION Improves services and downsizes the section by 18 FTEs. STAFF CHANGES • Abolish four Grade 22 positions ( Admin Service Officer III) Minimum annual salary $ 34,737 plus ERE $ 7,990 equals $ 42,727 $ 170,908 Total Savings • Abolish one Grade 21 position ( RIW Agent IV) Minimum annual salary $ 31,879 plus ERE $ 7,332 equals $ 39,211 $ 39,211 Total Savings • Abolish four 20 positions ( 2 RIW Appraiser III, Legal Analyst, R/ W Reviewer) Minimum annual salary $ 29,097 plus ERE $ 6,692 equals $ 35,789 $ 143,156 Total Savings • Abolish four Grade 19 positions ( 2 RIW Plans Supervisors, Title Examiner III, 1 R/ W Agent III) Minimum annual salary $ 26,182 plus ERE $ 6,022 equals $ 32,204 $ 128,816 Total Savings • Abolish one Grade 13 position ( Right- of- Way Assistant) Minimum annual salary $ 17,618 plus ERE $ 4,052 equals $ 21670 $ 21,670 Total Savings • Abolish , seven Grade 18 positions ( 5 RIW Agent II, Eng. Plans Tech III, RP App II) Minimum annual salary $ 24,238 plus ERE $ 5,575 equals $ 29,813 $ 208,691 Total Savings • Abolish three Grade 11 positions ( Info Proc. Spec II, 2 Secretaries) Minimum annual salary $ 15,481 plus ERE $ 3,561 equals $ 19,042 $ 54,126 Total Savings 60 • Create one Grade 19 Administrative Services Otticer position ( Consultant Administrator) Minimum annual salary $ 26,182 plus ERE $ 6,022 equals $ 32,204 $ 32,204 Total Additional Cost • Create three Grade 12, Administrative Secretary I positions. Minimum annual salary $ 16,531 plus ERE $ 3,802 equals $ 20,333 $ 60,999 Total Additional Cost • Create one Grade 16, Right- ot- Way Agent I position Minimum annual salary $ 20,895 plus ERE $ 4,806 equals $ 25,701 $ 25,701 Total Additional Cost • Create one Grade 21, Transportation RIW Plans Manager position. Minimum annual salary $ 31,879 plus ERE $ 7,332 equals $ 39,211 $ 39,211 Total Additional Cost • Create one Grade 16, Right- ot- Way Appraiser Minimum annual salary $ 20,895 plus ERE $ 4,806 equals $ 25,701 $ 25,701 Total Additional Cost ALL FILLED POSITIONS • FTE Savings to ADOT • FTE Additional Cost to ADOT • Total FTE Annual Savings to ADOT 61 $ 766,578 $ 183,816 $ 582,762 # 28 - CONSTRUCTION SECTION Current Situation Org 4833 - Construction Claims Branch Processes construction claims that have been filed with ADOT. There has been a significant reduction in claims due to successful partnering activities. Org 4834 - Construction Management Branch Administers the construction management program regarding manpower forecasting and planning. Districts have been trained in the construction management system. Org 4831 - Field Review Branch Conducts statewide quality assurance inspections of construction projects in the districts. Org 4837 - Reports Audit Branch Verify mathematical correctness and compliance with specifications, all documentation submitted from the field to support final pay quantities to contractors on all State highway construction projects. Impact Org 4833 - Construction Claims Branch Is overstaffed by one FTE due to a significant reduction in the amount of claims being processed. Org 4834 - Construction Management Branch Construction Management System training activities have been reduced in the districts. 62 Org 4831 - Field Review Branch As a result of a branch review of workloads, this branch is overstaffed by 2 positions. Org 4837 - Reports Audit Branch With the pending full implementation of Field Office Automation System ( FAST), the workload of the branch will decrease significantly and allow a reduction of 3 FTEs. Recommendation Org 4833 - Eliminate the following positions: 1 - Tr. Eng. TIL position. ( Abolish 7/ 1/ 94) Org 4834 - Eliminate the following positions: 1 - Tr. Eng. Spec. 1 - Tr. Const. Tech 1\ 1 Org 4831 - Eliminate the following positions: 1 - Tr. Eng. Spec. 1 - Traf. SIL Tech II Org 4837 - Eliminate the following positions: 1 - Tear Supv. ( by July 1, 1994) 1 - Tr. Const. Tech II 1 - Info. Proc. Spec. II 1 - Tr. O/ C Spec. Benefit • For quantification of savings see Construction Staffing recommendation, p. 64. 63 # 29 - CONSTRUCTION STAFFING Current Situation The Highway Division manages all highway construction in Arizona. The actual construction of roads is performed by private contractors selected through a competitive bidding process. The specific activities performed within the Highways Division, called construction engineering, include but are not limited to the following: • Inspection and materials testing of roadway construction to ensure procedures and materials meet plans and specifications • Surveying • Reviewing roadway design drawings • Approving all payments to contractors • Monitoring force accounts • Processing contractor claims • Reviewing and approving change orders Although most of these activities continue to be the responsibility of full- time ADOT personnel, the Department contracts with private engineering firms, and hires temporary and seasonal personnel to augment in- house staff. ADOT also transfers some quality control and surveying responsibilities to the contractors. The Highways Division carries out its responsibilities through staff in four engineering . districts and its central office. Staff, organized into areas encompassing several units ( ORGS), oversee construction activities, provide on- site inspections, and provide nondirect support to the construction process. Construction ORGS typically include resident engineers, engineering specialists, quality control technicians, survey personnel, materials testing. staff, and records clerks. Non- direct construction staff are defined as those personnel dedicated to providing necessary support to the construction process, but are not located at the project level and not required directly for the administration of the contract. 64 Construction staff are funded primarily from the ADOT construction budget established each year by the Transportation Board. Construction funded positions are identified with a Budget Identification Number ( BIN) of 8250. Construction funds are derived from the Highway User Revenue Fund ( HURF) which consists of revenues from the gasoline tax and other transportation- related fees. Construction funded staff positions are not appropriated by the Legislature; but are determined by the Department, based on total construction activity. The tentative five- year construction program produced by the Transportation Planning Division projects the following construction spending schedule ( see Attachment II A", p. 68). As of March 3, 1993, there were 650 authorized full- time employees ( FTEs) of which 585 were filled. Of the 585 filled positions, 442 were allocated to construction ORGS and 143 ( 24.4%) were located in ORGS other than construction. The Highway Division calculates an Arizona Construction Cost Index to track materials expenditures. The Federal Highway Administration ( FHWA) also produces a quarterly and annual index for federal aid projects in Arizona. Currently there exists a substantial difference between the two indexes. ADOT FHWA/ AZ ANNUAL ANNUAL YEAR INDEX INDEX DIFFERENCE 1987 100.0 100.0 0.0 1988 92.0 86.0 - 6.0 1989 87.0 85.5 - 1.5 1990 90.0 131.2 41.2 1991 86.0 90.7 4.7 1992 80.0 101.2 21.2 Impact Based on current and projected funding levels as well as productivity improvements it is necessary to adjust construction staffing levels and assign personnel to appropriate funding sources. 65 Recommendation Reduce the number of construction funded positions in BIN 8250 by establishing a construction staffing policy detailing the criteria that determines when positions should be assigned to BIN 8250 ( see attachment " B", p. 69) • Abolish unnecessary and duplicative positions from the Human Resources Management System ( HRMS) and define the authorized level for construction funded positions ( see " Shelf" Construction Funded Positions recommendation, p. 70). Establish a construction staffing plan using FTEs per million dollars of contractor payments as a baseline ( see attachment" A" I p. 68) and increase the use of interim staffing such as seasonal and contracted temporary personnel. Establish an internal team, incorporating an outside economist/ consultant, to implement improvements to the Arizona Construction Costs Index. The team should consider: • Index methodology • Appropriate materials components ( representative of total construction spending) • Correct " weighting" of index components based on relative importance to the construction activities • Causes of significant differences between the FHWA and Arizona indexes,. This recommendation should be implemented by October 1, 1993. By January, 1994, construction staffing levels should be re- adjusted using the newly developed index, but in no instance shall the index used for fiscal year 1995 be less than 1.00. Benefit Using a maximum baseline of 1.3 direct FTEs and .3 non- direct FTEs will yield the following savings ( assuming first year staffing reductions of 69 FTEs)* See attachment A ( p. 68) and Note below: 66 Vacancy savings of 65 FTEs ( 650- 585) @ $ 18,727 = $ 1.21 mil ERE at 28% = $ 0 .34 mil 69 FTEs x 1686 hrs ( loaded rate) x $ 27 per hour = $ 3.14 mil 69 FTEs x 402 hrs ( non- load rate) x $ 8.97 per hour = $ 0 .25 mil ERE at 28% = $ 0 .07 mil 69 FTEs X .8 equals 55 vehicles that can be sold @ $ 2500 = $ 0 .14 mil TOTAL $ 5.15 mil · Note: Additional savings may occur in FY 1995 and beyond due to staffing ratio adjustments based on revised funding levels and application of a revised Arizona Construction Cost Index. ( see attachment " B", p. 69!. 67 ATTACHMENT " An 5 YEAR CONSTRUCTION - SPENDING SCHEDULE IN MILLIONS OF DOLLARS FY 1994 STATE 276.4 EMERGENCY 16.6 RELIEF MAG 127.2 LOCAL GVT. 33.5 * TOTAL 453.7 DIRECT CONST. FTE's 413 NON- DIRECT FTE's 67 EXCEPTIONS 36 TOTAL STAFF REQUIRED 516 FTE RATIO 1.. 1 CURRENT CONST STAFFING 585 1995 265.6 0.0 43.3 35.5 344.4 413 67 36 516 1.5 516 1996 244.8 0.0 70.4 32.0 347.2 413 67 36 516 1.5 516 1997 284.4 0.0 127.3 32.0 443.7 413 67 36 516 1.2 516 1998 300.0 0.0 51.0 28.5 379.5 413 67 36 516 1.4 516 SURPLUS 69 o o o o * NOTES: 1) All of the figures shown are displayed in 1993 dollars. 2) The " revised" Arizona Construction Costs Index will be applied to total spending. Construction staff levels and surplus will be revised. 3) No allowances have been made for productivity improvements ( Le. FAST Project) or for reduced sampling and testing of materials. 68 ATIACHMENT nB" CONSTRUCTtON STAFFING POLICY ADOT should use a guideline of 1.3 FTEs per million dollars of expenditures for direct construction funded positions. The FY 1995 target for direct construction FTEs should be re- examined in January 1994. This should be an annual procedure. Beginning January, 1994, staffing levels will be calculated by applying the revised Arizona Construction Cost Index but in no instance should the index used for fiscal year 1995 be less than 1.00. ADOT should minimize the number of non- direct construction FTEs, and at no time should this total exceed a ratio of .3 FTE per million of adjusted construction expenditures. On an annual basis, if the time charged for any specific position falls below 50%, a review will be conducted to determine if the appropriate funding base is being utilized. Develop a process to capture non- direct construction funded project charges ( labor cost distribution). No position will be authorized for construction funding that cannot maintain a 50% charge to project ratio. This category includes, but is not limited to Bridge Construction ( Structures Section), Electrical Inspection, Non- Supervisory Field Reports, Personnel, Certification Acceptance, Internal Audit, District CMS, and District Laboratory Staff. In addition, a limited number of employees may charge to construction as exceptions to the policy ( i. e. non- directs that do not fully meet this policy). These exceptions include: 2 Safety , 9 Engineers- in- training 13 FAST ( Q. P. t.) 1 Internal Audit 1 Certification Acceptance 10 Bridge Maintenance 36 At no time should the FTE per million for all direct and non- direct construction FTEs exceed a 1.6 ratio. Construction staffing levels and assignments to funding sources will be monitored and appropriately adjusted at least annually if necessary. 69 # 30 - CONSTRUCTION " SHELF" POSITIONS Current Situation The Arizona Department of Transportation ( ADOT) is responsible for establishing the authorized staffing levels for construction funded positions. Construction funded positions are identified with a Budget Identification Number ( BIN) of 8250. As of March 3, 1993, ADOT had established an authorized level of 650 permanent full- time ( PF) positions. There were a total of 1,142 positions located in the Human Resource Management System ( HRMS) data base. Approximately 127 of these positions are for seasonals, temporaries, and interns. Impact Over the past several years, the total number of positions in the HRMS data base has grown substantially. Most of these positions have never been filled, but the vacant positions have been accumulating in the data base. As of March 3, 1993, there were 492 vacant positions. Recommendations ADOT should abolish unnecessary and duplicative positions from the HRMS data base and establish the authorized level of construction funded positions as follows: Abolish vacant and unfunded positions from 1142 to 650 ( 492 positions) and establish a new authorized level of 685 construction funded positions ( 585 full time and 100 seasonal). Benefits Removing surplus and duplicative positions will bring the data base in- line with authorized FTE levels. 70 # 31 - tRAFFIC OPERATIONS Current Situation Org 4862 - Signal Shop Maintenance Unit repairs or tests electrical items, modifies traffic signal cabinets, installs/ assists with new cabinets, and conducts traffic cabinet quality checks statewide. Org 4867 - Sign Manufacturing Unit is responsible for producing signs for all districts. The construction of signs is shifting from wood to metal. Org 4868 - Interstate Signing Unit is responsible for maintaining the signs on the interstate system. Construction of major signs is contracted out and occasionally the contractor's signs do not meet the sign inspector's requirements. Impact Org 4862 Signal Shop Maintenance Unit is modifying traffic cabinets to meet ADOT specification when the cabinet could be ordered with the ADOT specification and eliminate the need for installation by org staff. Traffic cabinet work could be performed with less staff. Interstate signs built by contractors frequently need to be redone due to failing to pass quality inspections because the contractor used two different lots of materials in making one sign. Metal signs require no painting. The Traffic Engineer has stopped the painting of wood signs., Recommendation Org 4862 - Eliminate the following positions: 1 - Traffic S/ L Crew Supervisor ( vacant) 2 - Traffic S/ L Tech II ( vacant) 71 brg 4867 - Eliminate the following positions: 1 - Painter 1 - Carpenter Org 4868 - Have the Org build all interstate signs and contract out only the installation ( when necessary). Benefit Having all interstate signs built at Org 4868 eliminates rework by private contractors. The reduction of 5 FTE's results in an approximate savings of $ 122,000. Additional ERE @ 230/ 0 adds $ 28,000 for a total of $ 150,000. 72 # 32 - ' DISTRICT 1- 4 FIELD FTE REDUCTIONS CURRENT SITUATION Due to changes in work loads and priorities, the districts have identified the following vacant positions that can be abolished. DIST/ ORG POSITION TITLE SALARY DIST 1 None identified DIST 2 Org 4299 Tr. S/ L Crew Supv. Grade 18 $ 24,238 Org 4299 Tr. S/ L Tech II Grade 17 $ 22,481 Org 4299 Tr. S/ L Tech II Grade 17 $ 22,481 Org 4299 Tr. S/ L Tech II Grade 17 $ 22,481 Org 4200 Tr. Eng. Per. Tech II Grade 16 $ 20,895 Org 4207 Tr. Const. Tech III Grade 16 $ 20,895 Org 4207 Tr. Const. Tech III Grade 16 $ 20,895 Org 4270 Tr. Landscape Spec. * Grade 18 $ 24,238 Org 4271 Hwy. Maint. Supv* Grade 19 $ 26,182 DIST 3 Org 4321 Laborer* Grade 10 $ 15,275 DIST4 . Org 4421 Hwy. Maint Tech 1* Grade 13 $ 17,618 Org 4434 Hwy. Maint Tech 1* Grade 13 $ 17,618 Org 4481 Hwy. Maint Tech 1* Grade 13 $ 17,618 Org 4484 Hwy. Maint Tech 111* Grade 16 $ 20,895 Total Salary $ 293,810 Total ERE @ 25% $ 73,452 Combined $ 367,262 * Savings from maintenance funded positions should be re- allocated within the current maintenance budget. 73 # 33 - TRAFFIC ENGINEERING STAFFING COST SAVINGS/ INCREASES The following changes are proposed for Traffic Engineering: • Create one Grade 24 position ( Tr Eng. Ill) Minimum Annual Salary $ 41,533 plus ERE $ 9,553 equals $ 51,086 $ 51,086 Total Cost Increase • Create two Grade 23 position ( EOP Tech. Sup. Spec. lIl, Traffic Eng. Supv.) Minimum Annual Salary $ 37,978 plus ERE $ 8,735 equals $ 46,713 $ 93,426 Total Cost Increase ( AOOT will have Personnel review the EOP position for proper classification.) • Create one Grade 20 position ( EOP Tech. Sup. Spec. 1) Minimum Annual Salary $ 29,097 plus ERE $ 6,692 equals $ 35,789 $ 35,789 Total Cost Increase • Create three Grade 22 positions ( Traf. Engineer I) Minimum Annual Salary $ 34,737 plus ERE $ 7,990 equals $ 42,727 $ 128,181 Total Cost Increase • Create four Grade 18 positions ( Eng. Plans Tech III, Contracts Mgmt. Spec. lI, two Tr. Traf. Studies Analysts). Minimum Annual Salary $ 24,238 plus ERE $ 5,575 equals $ 29,813 $ 119,251 Total Cost Increase • Create two Grade 16 positions ( Admin. Support Super. 11, Eng. Plans Tech II) Minimum Annual Salary $ 20,895 plus ERE $, 4,806 equals $ 25,701 $ 51,402 Total Cost Increase • Create three Grade 13 positions ( Info. Proc. Spec. III) Minimum Annual Salary $ 17,618 plus ERE $ 4,052 equals $ 21,670 $ 65,010 Total Cost Increase • Create one Grade 11 position ( Info. Proc. Spec. II) Minimum Annual Salary $ 15,481 plus ERE $ 3,561 equals $ 19,042 $ 19,042 Total Cost Increase 74 • Abolish two Grade 24 positions ( Tr. Traf. Eng. Mgrs.) Minimum Annual Salary $ 41,533 plus ERE $ 9,553 equals $ 51,086 $ 102,171 Total Savings • Abolish one Grade 22 position ( Tr. Traf. Eng. Team Leader) Minimum Annual Salary $ 34,737 plus ERE $ 7,990 equals $ 42,727 $ 42,727 Total Savings • Abolish one Grade 20 position ( Hwy Safety Spec. llI) Minimum Annual Salary $ 29,097 plus ERE $ 6,692 equals $ 35,789 $ 35,789 Total Savings • Abolish two Grade 14 positions ( Eng. Plans Tech I, Admin. Supp. Super. l) Minimum Annual Salary $ 18,755 plus ERE $ 4,314 equals $ 23,069 $ 46,138 Total Savings • Abolish three Grade 11 positions ( Info. Proc. Spec. lI) Minimum Annual Salary $ 15,481 plus ERE $ 3,561 equals $ 19,042 $ 57,126 Total Savings • Contract Employee - $ 48,500 ( Admin Asst., Contracts) Vacant Positions 2 Tr. Traf. Eng. Mgrs. FTE creation costs FTE abolish savings Contract employee s~ vings Net additional FTE costs $ 563,187 $ 283,951 $ 48.500 $ 230,736 75 Traffic Engineering Section ATTACHMENT Offlee For EMcellenee structure Proposal 6- 14- 91 Stete Engineer Stela Traffle Engineer Orade 25 II Direct Reports AdminIstrative Admlnstratlve Assistant Seereter)' It Orade 17 Grade 13 I I I I I I TRAFFIC STUDIES TRAFFIC DESIGN TRAFFIC RECORDS TRAFFIC ELEC. TRAFFiC PROGRAMS Tr. Tref. Eng. DESION Supv. Grade 23 TransportatIon Tran. porlalon EDP technIcal Transportation Traffic Traffic EngIneer Traffic Englne. r Support Spec. III TraffIc Engineer EngIneer III Supervl. or Supervisor Supervisor ( Ne.) Grade 23 Grade 23 Grade 23 Orad. 23 Orade 24 STAFF ADDITIONS: TOTAl FTE's = 8 FTEs 79 Analyst Orade III Tech II Orade 16 D/ C Tech ] Onde ' 5 ns Tech II ." do 16 . AT" TRAFFIC STUDIES Trans. Traf. Eng. Supervisor Gnde 2) 7 DI rect Reports Secretary Gnde II r r I I I Transportatlol'l Tnnsporlilion Transportation Transporhtlon Transportation Trans. Eng. Eng. Special hit Eng. Specialist Eng. Specialist Eng. Specllliist Engineer I . Grade 22 Orade 2. Orade 2. Onde 2. Orade 2. Grade 22 I ] DlrectlReports I I 4 Direct Reports ] Direct Reports 5 01 reel Reports , . • Trans. Eng . Specialist Grade 20 Traffic Studln Treffl c Stud I.. Trefflc Studies Tnfflc Studl .. Analyst Analyst Analyst Analyst Orade III Onde ' 8 Orade 18 Onde III Trans. Eng. I Specialist I Engl --. I I Engl Plllnsl I I Grade 2' 1 Id Tr udy Tref. F1el~ i D/ C Tech Grade 15 Tnf. Field D/ C Tech Grade 15 Tnf. Field D/ C Tech Gnde 15 Traf. Field D/ C Tech II Grade 16 TDre/ Cf. TFechhll,,' J'" Grade 15 Traf. Field D/ C Tech Grade 15 Tref. Field D/ C Tech Gnde 15 75 b TRAFFIC DESIGN Trens. Trer. Eng. Superylsor Grade 23 ATTACHi' 1ENT · r Trensportatlon En,. Tea. Leader Orade 22 I 4 DI ract Reports I Transporhtl on En,. Spec. .. Orada 21 Englnaar Plans Tech III Oreda 18 En, lnaer Plans Tech II Orada 16 En, lneer Plans Tech II Orade 16 5 Direct I Transportation En,. Tea. Leader Orade 22 I 4 Direct Reports I Transporhtlon Eng. Spec. Orade 21 En, lneer Plans Tech III Grade 18 Engineer Plans Tech II Grade 16 Engineer Plens Tech II Orade 16 Reports Secrehry Grede 11 I TransportaUon Engineer I Grede 22 I 3 Direct Reports I Transportation En,. Spec. Orede 21 Engineer Plens Tech III Grade III Contrach USJIlIl. Specialist. Grede 18 Transport. etlon Engineer I Grade 22 Trensportetlon Engineer I Grede 22 Transport. atlon Engineer I Grade 22 I AdIIIln. Support Supv. II Onde 16 Reports TRAFFIC RECORDS EDP Tech. Sup. Specialist III Grade 23 7 DlrectlReports 1 EDP Specialist I Grade 2e Secretary Grade II I Trans. Eng. Compo Appl. Grade 17 ATTACH!> 1ENT Res. stat. Anal. III Grade 18 Information Proc. Specialist III Orade ' 3 I Information Proc. Specialist III Onde ' 3 I Information Proc. Specialist III Gnde 13 I Information Proc. Specialist II Grade ' I " I Information Proc. Specialist II Grade II 1 Information Proc. Specialist II Gnde II T Information Proc. Specialist II Orede ' I I Information Proc. Specialist II Gnde ' I .- Information Proc. Specialist II Orade I' I Information Proc. Specialist II Grade I' .- Information Proc. Specialist II Grade II .- , -;- n; o;~ at I o~ ; roc. 1 Spechll~~ II 75 d Res. stat. Analyst II Grade 17 Res. stat. Anal. II Grade 17 TRAFFIC £ LECTRICAl D£ SION Tr. Tra'. £ ng. SupervIsor Gnde 23 9 DIrect I Reporh Secretary Grade II Tr. Tra'. £ ng. Team leader Grade 22 Tr. Tra'. £ ng. Tealll leader Grade 22 Tre'. £ ng. Spec. Grade 2. Tr. £ Iec. DesIgn Tech Grade 18 Tr. £ Iec. Des Ign Tech Orade 18 £ ng. ' Ians Tech II Grade 16 £ ng. ' Ians Tech II Grade 16 £ ng. ' Ians Tech II Grade 16 75 e ATTACHMENT TRAFFIC PROGRAMS Transportation Eng Inur II I Grade 24 L-- Some positions established In District I for FMS should be transferred to this unit. The unit responsible for FMS development, new products evaluation, ISTEA program, T. E. manual, STDS policies & procedures committee within Traffic Engineering. Intra- agency committee Is currently developing recommendations for ISTEA. The State Engineer's office should provide some guidance with the development of this unit to help Incorporate traffic engineering Into transportation processes. 75 f ATTACHMENT # 34 ~ STRUCTURES SECTION Current Situation The Structures Section currently operates underfive organizational units: 4050, 4051, 4052, 4053, and 4059. The administrative functions are centralized and performed by two secretaries under the direction of the Assistant State Engineer- Structures. • Org 4050 is an administrative org responsible for management of the section and administrative functions. • Org 4051 - Bridge Design Services is responsible for review, bridge design, and technical support. • Org 4052 - Bridge Drainage Services is responsible for design and review of bridge and highway drainage. • Org 4053 and 4059 - Bridge Operations Services is responsible for bridge construction liaison with Districts, bridge foundation design, and bridge maintenance inspection. Impact • The Bridge Review Branch in Org 4051 is experiencing staff turnover and has difficulty in maintaining review schedules. • The Bridge Construction Branch in Org 4053 has an overlapping function with engineers in Org 4051, Bridge Design. There is loss of continuity in project knowledge when the project transfers from design to construction. • The automation of detailing requires more expertise in functions related to the CADD system, while the same automation requires fewer positions. • There is a high turnover of personnel in the Grade 20 designer positions in the Section; the character of the work in project management requires greater expertise. • There is a strong need for technical specialists to assist the Section as a whole in computer hardware and software functions. 76 Recommendation • Reorganize the Structures Section into a single organizational unit with six sub- functions: Bridge Design Unit I - Bridge Design Unit II - Bridge Design Unit III - Bridge Drainage Services - Bridge Technical Services - Bridge Management Services • • • • Combine the current functions of bridge review, bridge design, and bridge construction into three equal Bridge Design Units as Bridge Design Services. Combine Drainage review functions in one unit by transferring two similar positions in Statewide Project Management Section. Upgrade the Bridge Detailer II positions to Grade 18 and assign more duties and responsibilities. Reorganize the Technical Support Branch and the Bridge Foundation Branch into a new Bridge Technical Services, and increase technical capabilities. New staffing for each unit: • • Bridge Design Service ( 3 equal units) Bridge Drainage Services - 1 Bridge Engineer II supv. 4 Bridge Engineer I 3 Bridge Designer 3 Bridge Design Technician 1 Bridge Engineer II supv. 3 Bridge Engineer I 4 Bridge Drainage Designer * 1 Bridge Engineer II * 1 Bridge Drainage Designer Gr 23 Gr 22 Gr 20 Gr18 Gr 23 Gr 22 Gr20 Gr 23 Gr20 * These positions are to transfer from SPMS to Structures Section 77 • Bridge Technical Services - • Bridge Management Services Benefit 1 Bridge Engineer II supv. 2 Bridge Engineer I 1 Brg. Foundation Engineer 1 Bridge Designer 2 Trans. Engr. Specialists 1 Bridge Engineer III 5 Bridge Engineer I 5 Bridge Inspection Tech. 1 Bridge Detailer Gr 23 Gr 22 Gr22 Gr 20 Gr 20 Gr24 Gr 22 Gr 15 Gr 15 • Combining the bridge review and bridge construction functions with bridge design will improve efficiency, reduce turnover, and will provide for " cradle to grave" project continuity. • The reorganization reduces layers of management and increases span of control. • Combining drainage functions from SPMS will result in more efficient use of existing resources and will strengthen the function sufficiently to provide all design review and scour evaluation. • The use of automated detailing with enhanced staff capabilities will improve production of drawings. • Seven fewer Grade 20 positions along with a modest increase of 3 Grade 22 positions will reduce turnover problems, improve morale and provide advancement opportunities. • The reclassification of detailers from Grade 17 to Grade 18, along with an overall reduction of two positions, results in only about $ 1,400 in increased costs. • The overall reduction of 9 FTE's results in an approximate savings of $ 233,400. Additional ERE @ 30% adds $ 70,000 for a total estimated savings of $ 303,400. 78 # 35 - · HIGHWAYS DIVISION - TECHNICAL TRAINING Current Situation There currently exists a lack of coordinated technical training in the Highways Division. ADOT has been using Central Arizona College ( CAC) for Basic and Advanced equipment operator training classes ($ 273,219 - 7/ 91 to 11/ 92). Engineering districts have been performing technical and safety training on an " as needed" basis without regard to overall departmental needs. Impact • ADOT staff in the Districts are not receiving consistent, current, up- todate technical training in a manner which is customer friendly • ADOT does not have a documented, quality, equipment operator training program • There is a demonstrated lack of technical and safety training occurring • Mandatory training requirements are frequently met with inappropriate training courses • There is a lack of in- house, trained technical instructors • Frequently, training courses are available only in the Phoenix area • There is an increased potential for lawsuits and accidents due to a lack of technjcal/ safety training • Costs of training are considerably increased by requiring district staff to travel to Phoenix rather than training staff traveling to districts • The validity of existing technical training programs, or the cost of not having new/ necessary technical training is not currently evaluated Recommendation ADOT needs to focus resources on providing a quality, consistent technical training program for the Highways Division by: 79 Benefit • Establishing in policy that technical training for Division staff is the responsibility of the State Engineer • Creating a formal, statewide technical training program by establishing the Technical Training Service under · the direction and control of the State Engineer's Office • Identifying the funding source and percentage of federal funds that should flow through the Technical Training Service to be used specifically for technical training • Creating a Training Officer HI position to manage the daily functions of the service • Creating a Training Officer II position to develop and implement an inhouse Subject- Matter- Expert Technical Instructor training program ( TrainThe- Trainer). This position requires an expert on curriculum development and instructor techniques • Having the Technical Training Service manager evaluate the effectiveness of District and Equipment Services Training Officer positions • Creating 2 Training Officer I positions ( contract only) to conduct basic and advanced equipment operator training ( on- site in the Districts) and eliminate the Central Arizona College training program. These positions should provide " expert" on- the- job training to potential operators • Create 2 Training Specialist ( contract - if necessary) positions to develop and coordinate various technical training programs ( ex: NICET, etc.) • All Training Officer I's in the Highways Division ( 4 in districts and 2 in Equipment Services) should report directly to the Technical Training Service Manager • Increase utilization of local community college participation in Highway Division training programs. • ADOT will have a standardized and comprehensive technical training 80 program to meet Division specific training needs • Training costs should be reduced by having technical training provided by " traveling" subject- matter- experts • Technical training courses will increase in number and be more directly related to job specific applications • Improved utilization of Equipment Services and District Training Officers • The Highways Division will have a centralized, coordinated assessment of Division/ District/ Section technical training needs • Improved technical training will increase the life/ usability of ADOT equipment due to a comprehensive training program focusing on operation and maintenance of equipment. Costs/ Savings • The creation of 6 new FTEs is estimated to cost ( with ERE) $ 231,939. This is a " high" estimate due to utilizing " contracts" to provide expert trainers rather than ADOT employing full- time trainers. • The total elimination of the CAC contracts would result in an approximate $ 41,000 savings ( with the creation of new FTEs) to provide more and better training than CAC now provides. 81 BULLET POINTS ISSUES The following items have been identified as areas for potential study by internal ADOT Quality Improvement Teams: 1. Project Management Concept: ADOT should organize its Highways Division under a Project Management philosophy. This concept would ensure that one individual - a project manager - has cradle- to- grave responsibility for ADOT projects. The concept will necessitate maintaining a certain number of functional silos, which will be responsible for providing the internal expertise needed by the project managers to draw on as required ( this concept is currently being developed jointly by Project SLIM and the ADOT Highways Division). 2. Privatization/ Reliance Qn Consultants: ADOT should develop a formal model to assist management in determining when to contract out a particular service and when to do it in- house. It appears that the decision to contract out is sometimes based on whether or not employees like or dislike certain tasks, and not necessarily on cost- effectiveness. It is not apparent whether a decision to contract out a service formerly done in- house is captured as a savings in FTE reductions, allows for other work to be done, or merely reduces the workload of the people formerly doing that activity. Another issue related to contracting out for services concerns the reliance by ADOT on the engineering consultant community. A paradox exists here because we frequently hear in our interviews that ADOT must keep a core group of engineers in order to maintain needed expertise within the Agency. At the same time, however, we often hear concerns expressed about having to " wean our~ elvesoff" the consultants, and about not having the expertise to do certain jobs without the consultants. This suggests that ADOT does not have the expertise in certain areas to begin with, so maintaining expertise in those areas is not the central issue. The issue appears to be deciding whether to build the expertise internally or to contract out to organizations already possessing that expertise. 3. EngineeringITechnical Expertise vs. Managerial/ Leadership Expertise: The overwhelming majority of managers within the Highways Division are professional engineers. The orientation and skills necessary to succeed as an engineer, such as specialization, detail- orientation, and a methodical nature can sometimes conflict with the skills necessary to be an effective leader ( wide vision, flexibility, delegation, motivation, etc.) , particularly in a TQM 82 environment. 4. The Agency's Ability To Effectively Manage The Current Level Of QPI Activity: ADOT has at least 64 Quality Teams analyzing approximately 300 issues. This may be an excessive amount given the communication and coordination problems that have surfaced; the drain on employee time and productivity; and the difficulty some teams are having implementing recommendations. Through our working relationship with 8 of these internal teams, we have identified some of the relative strengths and weaknesses of external teams ( SLIM, Ernst & Young, etc.) vs. the internal QPI teams. The internal teams have an advantage over an external group in identifying and flow charting major processes, and gathering feedback from internal customers regarding obstacles to improvement. An external team appears to be superior in the areas of gathering input from outside customers and constituencies; recommending alternative structures, processes, and missions; quantifying dollar savings resulting from recommendations; and implementing recommendations through internal teams ( Note: ADOT is currently addressing the coordination and communication problems of the internal teams described here). 5. Asset Utilization: The District One ( metro Phoenix) Equipment Services vehicle maintenance facility is substantially under- utilized. The facility contains two buildings with a total of 40 vehicle bays, and only one 8 hour shift is run. We believe this facility has the potential for becoming a central maintenance point for all state government vehicles in the Phoenix metropolitan area. There is currently a separate cross functional OEG/ ADOT/ DOA team reviewing this subject. 6. Self- Imposed Service Levels: The team has identified a tendency by ADOT to impose service levels on itself that exceed the norm, particularly in light of the fact that the Federal Highway Administration ( FHWA) does not mandate any specific levels of service in regard to the frequency of services provided. Examples of this are in the areas of lab inspections, materials testing, and inspections of construction sites. . 7. Fragmentation of Automation Systems: Our review of ADOT has revealed a multitude of computer systems operating which cannot communicate with one another, and which do not appear to be part of any master automation plan ( FAST, EMS, PECOS, CMP, TRACS, etc.). Another area of concern is the pattern of recruiting under- qualified people to work with automation systems, 83 ' providing them with on- the- job training - rather than hiring someone with the needed expertise. 8. Policing of Overweight Intra- state Trucks: ADOT engineers indicate most of the damage to our road system is done by trucks, particularly those which are operating in excess of the legal weight ( one overweight truck can result in the same amount of wear and tear on the road as 10,000 cars). Most of the enforcement against overweight trucks is done at the ports- of- entry, which affects primarily interstate trucks. We believe there could be significant savings in highway maintenance costs if the Department of Public Safety made a concerted effort to cite overweight intrastate trucks operating on Arizona's highways. This enforcement activity should be tied to ADOT's road assessments to determine which areas are being impacted more than others. 9. Decentralization/ Empowerment to Districts: We believe improvements to Agency effectiveness will come from pushing down authority in the Division to the District Engineer level and lower where applicable. The current " State Office" programs, which serve as the centralizing force, need to be renamed to symbolize more precisely their true function - to provide technical and general support to field operations. 10. Image of ADOT: For a variety of reasons, ADOT is laboring under a public image problem today. We suggest that the agency utilize its internal PR capability ( videos, publications, presentations, etc.) to help counter this public perception. Public Service Announcements ( PSAs) should be produced showing the value- added work of highway workers, snowplow drivers, engineers checking bridges for structural damage related to flooding, etc. The campaign could build on the " Highway Workers - Give Them a Brake" campaign ADOT currently uses. 11. Consolidate and reduce the number of orgs. statewide where appropriate 12. Appropriate personnel classifications - Reclassify personnel division- wide to their appropriate job classification 13. Overtime/ backlogs -. Review overtime/ backlogs for systems improvements 14. Contracting levels vs FTE levels - Review benefits and related costs 15. Isolated camps - Review for elimination 84 16. Life cycle costs - More emphasis in the development phase 17. Roadside Development - rest areas: fewer & more appropriate design 18. Landscaping - Consider numbers and types of plants during design phase 19. District 1 - Contract out all of maintenance ( pilot) 20. Cost benefit analysis of landscaping in district 1 ( ADOT says 25% less for them) 21. Selected rest areas for privatization ( revenue enhancement) 22. Consider maintenance costs/ construction during design phase 23. Labs - unnecessary tests/ duplication/ outside inspections 24. Quality Assurance Program - Under review 25. Increase privatization of testing 26. Accident reports should be checked for completeness prior to microfilming to eliminate rework. 27. Establish a DUIT team to study work performed by Transportation Engineer Specialist in Traffic Electrical Design to determine if Engineer should be required for the position. 28. Annual Road Assessment - Review for validity, subjectivity, continuity, and duplication. 29. Blue Stake Process - Consider partnering with Blue Stake centers to reduce unnecessary inspection requests 30. Permits - Explore feasibility of charging for all permits 31 . Billboards/ sign revenue ( increase) 32. Partner with law enforcement jurisdictions to get complete accident reports the first time. 85 33. Equipment utilization - Office equipment, vehicle to FTE ratio, etc. 34. Land Leases - Review for possible sale/ rental increase 35. Use of prison labor - Explore feasibility of expanding use of prison labor ( Signs/ labor intensive activities/ locations) 36. Contracts • New contracts should contain flexibility to add newly completed miles • Cost- benefit model for contracting vs. in- house processes/ • Expand contracting - systematically analyze for new opportunities ( signing, for example) 37. Provide staff authority to go along with responsibility. 38. Increase utilization of video/ conference calls to reduce travel time, expenditures, etc.. 39. Modify hard hat requirement - Limit wearing requirement to overhead work only 40. " Pima" system analysis - Review for expansion/ cost effectiveness 41. Procurement - cost of buying on vs. off contract ( vendor not available locally) 42. BTS forms, etc. - eliminate duplication of PECOS 43. Expand re- cycling and salvage of items sitting in maintenance yards 44. Investigate value of bi- weekly vehicle reports 45. Exclude up to 1%- 5% of maintenance budget from reversion to general HURF fund 46. Review arbitrary cap of maintenance budget 47. Measurement of field maintenance quality of work - Establish a measurement for quality of maintenance work 48. Centralize ADOT technical library services 86 49. " Adjust required site visit for water/ waste water facilities 50. Lost materials report - Monitor dollar amount of loss 51. Decentralize permits to districts 52. Trainers should be " hands- on" experts to provide training- not merely administrators 53. Mandatory Training - Require/ provide job specific technical training for district staff 54. Billing process - requisitions and supplements by orgs 55. Higher level of authority to Area Engineer/ Maintenance Superintendent 56. Drop ship large orders ( possibly all) of traffic signals 57. Buy common items locally 58. Make all ISG/ JCL printouts by request only 59. Cross train signing & striping people to operate snow plows ( review pay grades) 60. DPS - Training to DPS will reduce/ eliminate unnecessary call outs of ADOT staff 62. Put traffic engineering into districts , 63. Inter- governmental Agreements - Review inter- governmental agreements with cities and counties to maintain roads ( does ADOT need this road/ agreement?) 64. Establish standardized specifications - ( ie) Establish 1 type of guardrail to be used until the year 2000 then upgrade to latest. Consistent as possible 65. Improve hiring process - Empower local units to hire more quickly 66. Cross train Information Processing Specialists to work on all ( DPS, local, county and fatality) reports and mail procedures. 67. Establish feasibility of contracting out a portion ( or all) of Photogrammetry 87 Services 68. Review feasibility of utilizing portable ( one- man) Global Positioning Technology to reduce the size and cost of survey teams. 69. Develop a system ( either a billing or a reporting system) to create an awareness within ADOT of the expenses attached to using the aircraft. 70. Create a revenue flow through marketing ADOT aircraft as a passenger service to State Government. Will increase usage rate of both aircraft. 71. Provide total quality and manager training for those in supervisory positions. 72. Eliminate ADOT- provided housing where private sector housing is available within a reasonable radius. 73. Hold consultants to ADOT standards, eg., use same signing with consultants as does Traffic Engineering Section. ADOT Engineering Records can supply these to consultants on disk. Subcontractors are not always aware of this resource availability. 74. Update computers in Records for on- line corrections quickly and to flag locator problems, |
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