Public Works: Contracting and Technology Impacts

(from Maine Townsman, November 2007)
By Douglas Rooks

Contracting and the impact of tech nology have emerged as hot topics in recent discussions among Maine public works directors. And the interaction of the two subjects may play a key part in municipal decision-making as towns and cities contend with public demands for containing without compromising key services.

The situation is challenging but not without its opportunities, say both municipal and state officials. Pete Coughlan, director of the Local Roads Center for Maine DOT, said that some communities are exploring the possibility of taking on more work themselves, sometimes in the context of an interlocal agreement to share equipment and other resources.

Towns in central Kennebec County have been working for five years on joint projects, with some success. Last summer, Manchester, Readfield and Wayne purchased a John Deere tractor with a grant from the Maine Municipal Bond Bank’s regional cooperation program. The three towns spent $3,500 this summer on mowing vs. the estimated $12,000 they would have spent on contracted services.  “We mowed every road,” Town Manager Mark Doyon said at a recent conference to discuss the regional effort, and reported on by the Kennebec Journal. “That had never been done before.”

Readfield Town Manager Stefan Pakulski made it clear that he expects to try more such experiments. “I don’t have anything against contractors,” he said. “What we’re trying to do is respond to severe fiscal constraints.” He said that demands to keep the tax rate down and stay within LD 1 limits has made rising costs for contracted services subject to new scrutiny. Managers will need “to look at other options” wherever possible, he said.

Winthrop Town Manager Cornell Knight cautioned that taking work in-house is not a panacea. Winthrop and Monmouth bought a street sweeper jointly, he said, but this year had an unpleasant surprise: an unanticipated maintenance bill for $12,000.

Still, it’s possible that interlocal efforts could be considerably expanded. While Pete Coughlan said that only a few municipalities have recently created public works departments – Casco did so about 10 years ago, and Veazie a couple of decades before that – pooling resources among smaller towns could yield considerable savings. A study for the Manchester-Readfield area towns, for instance, showed that combining winter plowing and summer road maintenance activities could make a dramatic difference in the budget – although there would be significant startup costs for purchasing equipment, among other things. The required capital investments make regional projects challenging, because cost-sharing and maintenance costs must be considered upfront, he said.

In-house or contract?

Town managers and public works directors in other parts of the state agree that thorough study is needed before deciding how much work can be done in-house and what jobs can be better done by private firms.

Bill Shane, town manager of Cumberland and former public works director in Yarmouth, said that, with about 10 employees, Cumberland’s public works department probably falls into the mid-range of municipal departments, which exist, in some form, in about one-third of towns and cities. “There are limits to what you can do, and should do,” he said. “You can take on a big job and think you’re saving money, but you may not notice all the other work that’s not getting done.”

The rule of thumb in Cumberland, he said, is that road reconstruction and maintenance projects lasting three days or less are done in-house, while for lengthier jobs the town contracts out. There are exceptions, Shane said. When coordinating various activities becomes complicated – a sewer project, for instance, that may involve moving utility lines and doing pavement work – the town may want to maintain overall management of the project while using subcontractors.

In Cape Elizabeth, Public Works Director Bob Malley says that most maintenance projects are done in-house, while major paving, road reconstruction projects and sewer projects are put out for bid. Some simple questions can help answer the question of whether the town should do the job, he said. “Do you have the equipment and the expertise? Do you have the time?” Some public works departments concentrate on drainage work rather than paving, which can be done in a day or two but can yield significant dividends, he said.

Bill Shane agrees. “It’s not glamorous,” he said of ditching and culvert work, “but in terms of maintaining the value of your investments in roads and highways, it’s really important.”

Malley said that while Cape Elizabeth has 16 employees assigned to public works, the actual workload is considerably broader than one might expect. In Cape Elizabeth, public works operates the transfer and recycling station, maintains school properties and the town cemeteries, and keeps up the parks. Only six or seven employees are focused on what might be seen as the traditional job of maintaining roads, and even some of them may be called on to make a run on the solid waste route. “It’s hard for us to undertake a large project, especially when the crews have to be out there 10-12 hours a day.

“Contractors,” Malley said, “are geared up to do this kind of work.” One example would be laying pipe: “We can do the work, but the private firms do it all day long, and it makes a difference in how efficient you can be.” Other towns in southern Maine may strike a different balance between in-house work and contracting. Westbrook, for instance, has fewer ancillary responsibilities and does more projects with its own crews, he said.

Impact of Technology

Technology can also lead to changes in the way public works departments decide about who should do certain jobs, although again, the changes are not all in one direction.

Snowplowing is one area where most municipal public works departments handle things mostly on their own. GPS technology is increasingly being used to monitor plow routes, recording things as exacting as blade angles and pavement conditions – sometimes in real time. Bob Malley believes that municipal departments will find such data more important than contractors do. “There’s more accountability when the town does it. Where a contractor is mostly influenced by getting the job done at a reasonable cost, we’re trying to provide the best level of service with the resources we have.”

Another factor in adoption of high-tech tracking systems is questions about liability. In a much-watched case recently decided by the Maine Supreme Court, the judges decided that winter road conditions did not create liability in a fatal car crash where the plaintiff alleged poor maintenance. But it was a close call and, as Bill Shane acknowledged, will be on the minds of municipal officials as they prepare for winter maintenance, and how they can document performance. “It’s pretty convincing evidence,” observed Pete Coughlan, “if your GPS system can show your plow wasn’t even out on that particular road.”

Other uses for technology include salt-spreading equipment to regulate the dose of different mixes used in de-icing. Bill Shane said that Cumberland invested in some early units, back in the 1980s, and found them unsatisfactory. “They weren’t consistent enough to be reliable, and they broke, too,” he recalls. But he was impressed by recent demonstrations of how much the technology has improved. “The performance is much better and the cost is lower,” he said. As Cumberland replaces its fleet of plow trucks, as it expects to do over the next 10 years, the new trucks will likely have the latest tracking devices. “It’s really tough to retrofit your existing trucks, but when you’re replacing them, it makes good sense,” he said.

Cumberland already uses sophisticated technology for other purposes, though – particularly its GIS mapping system which makes the review of development proposals much more efficient. Developers, landowners and neighbors can all plug into the town’s mapping system and both receive and submit plans electronically. This helps considerably in determining, for instance, how wetlands will affect a new development, and what public utilities – electric lines, sewer lines and gas mains – are in the area. Shane said that a modest investment in surveys – which are rarely more than 1 or 2 percent of the cost of a project – also pays off. Such knowledge is critical in making sure town planning reviews can proceed on schedule, without unpleasant surprises because critical factors have been missed.

While most snowplowing duties are handled by municipal departments, there are exceptions. In Cumberland, town trucks plow all the 62 miles of public roads, and probably plow a few more miles clearing parking lots. In Cape Elizabeth, town employees also handle the roadwork, but there is one snow-clearing contract for sidewalks, where separate equipment is required. “We’re very specific in the contract about what time sidewalks need to be cleared, and exactly what areas are covered,” Malley said.

Some cities with highly compact urban areas need additional, contracted plow trucks because snow must be removed quickly after storms. For many years, South Portland has hired road graders from private contractors to break up compacted snow near the Maine Mall because traffic is heavy and plows can’t always keep ahead of it.

About the issue of revising signed contracts for unanticipated variables – such as the cost of fuel – public works directors are unanimous: Don’t do it. “That’s part of the reason for having a contract when you put things out for bid,” said Bob Malley. The sidewalk plow contract in Cape Elizabeth, for instance, is for two years, with no increase allowed for fuel. “Unless there’s an escalator clause built in, that’s the contractor’s responsibility, not the town’s,” he said.

Fuel costs are occasionally included, such as in a contract for rural roads in Somerset County, where contractors plow very long routes with very little traffic. But so far, such provisions seem to be the exception more than the rule.

Starting afresh

A few fledgling towns have had to consider the public works question anew, said Pete Coughlan – Frye Island, Long Island, and now Chebeague Island, which broke away from Standish, Portland, and Cumberland, respectively, over the past 20 years.

But other towns may be considering taking on more responsibility themselves, and for them Coughlan has some facts worth considering. Even after factoring in equipment purchases and personnel, it’s clear that public departments can be competitive with the private sector and often save money, he said. “Your reaction time can be faster, and you can provide better customer service,” he said.

But setting up a public works operation that will provide those benefits is not a simple matter. Coughlan advises checking with other towns that have departments about some of the basics – hiring a foreman, other employees, writing job descriptions, obtaining commercial licenses, environmental permits, and buying equipment. That will likely include dump trucks and plows, a grader, loader and a sidewalk plow for built-up areas.

“When you put it all together, you’ll get your startup figures,” which, for most communities with enough demand for a separate department, will be about $1 million. “It’s a 10-year proposition” to amortize equipment costs and achieve the savings the plan might envision, he said.

For some towns, it clearly wouldn’t work. Coughlan has served on the budget committee in Randolph for years, and has seen how plowing and summer maintenance costs have increased steadily. But Randolph, the smallest township in Maine at just over two square miles, has only seven miles of roads. “The cost per mile might be high, but doing it yourself doesn’t make sense” in these circumstances,” he said. Only a partnership with other communities – a relatively rare arrangement for public works – would changes those basic economics.

Whether municipalities choose to seek bids for public works projects or do the job themselves, they can benefit from careful planning and use of surveys and maps. As part of a contract handbook Bill Shane prepared during his years as a public works director, he emphasized the simplicity that can achieved by a little advance work by the town. “Rather than providing 62 pages of specifications, we can pinpoint the location of six catch basins and describe how they need to be built.”

He estimates that such planning can avoid anywhere from 8 to 15 percent of the costs associated with construction projects of $100,000 and up. “That’s some of the beauty of what you can achieve with technology, and a little thinking ahead,” he said.