Black Gold
The price of fuel is changing
dynamics in communities across the country. Not just the cost of fuel
itself, but the cost for all goods and services which are going up due to
the cost of fuel.
“Uncertainty in fuels and oils, price-wise, is one of the biggest
challenges. That seems to be a moving target that affects what you can
actually do in chipping and paving for the year,” noted Dan Copeland,
Superintendent for Bannock County Road and Bridge in Idaho. “Our strategy
is to lock into an oil price for a year so we can set a road maintenance
plan.”
And in states with energy resources, the exploration
business is wreaking havoc.
“We have about 520 miles of road that we maintain. Two
hundred and sixteen of those miles are getting impacted by gas and oil
exploration,” said Gary Meyer, special projects manager in historic Sheridan
County, Wyoming. “We are getting hit pretty hard. I was with a contractor
on a ranch road this morning, and probably met 20 vehicles in 5 miles. That
may not sound like a lot but these are roads that would not have seen that
many cars in a week. Roads that used to see maybe 150 cars per day have more
than 800+ cars a day now. This is just the tip of the iceberg for what is
going to happen.
“Methane. That has picked up even more,” said Cheryl
Benner, Resource Utilization Specialist in Johnson County, Wyoming. “And as
fuel prices go higher there’s more interest in alternative fuels, so they
are looking at reopening the Uranium mine. Also proposals for a coal
gasification plant, where you turn coal into fuel. People want the work,
but there is controversy like with everything.
Growth
“Growth is eating our lunch,” said Bob Gamble from
Green Cove Springs near Jacksonville, Florida. “The area around us has been
growing significantly, so now they are coming our way. We provide water and
sewer, and our plant is near capacity, so we are looking at a point of
having to expand for water and sewer. With more people we also see
significantly more service demand. My solid waste section is struggling
just to make the regular trash pickups.”
Most of the way across the country in Pocatello, Idaho
Copeland reported similar challenges.
“What we struggle with most is just our growth,”
Copeland said. “Everyone just keeps building new subdivisions. It does not
take long to add a few thousand cars a day. This year we are doing a
comprehensive transportation study. We will use traffic counts by road
segment to reprioritize how we prioritize service compared to what we have
been doing in the past.”
But as Meyers points out, “One of the challenges with
all this growth is that growth impacts happen before we get the growth
revenue. For governments there is always that lag.”
Asset Management
Asset management has taken a new importance in the
industry, in large part due to GASB34, the Government Accounting Standards
Board ruling that alters the way capital assets are reported. The ruling
requires cities and counties to account for the value of all improved assets
based on useful life, and to report asset and asset depreciation by service
category. The first step in that process is the identification and listing
of all assets under your purview.
“I think it is important to keep up with your road
inventory: physically driving and inspecting all the roads and scoring all
aspects of the road: shoulders failing, subgrade failing, horizontal or
vertical cracking in the road surface,” noted Copeland. “Scoring the entire
profile lets us prioritize where to crack seal roads or chipseal roads to
prevent moisture from slipping down into road surface.”
“On hard surface maintenance, you cannot vary from your
schedule on resurfacing,” concurred Wayne Efeortz, Road and Bridge Foreman
in Lewis and Clark County, Montana. “We did that here, thinking we could
wait on chip sealing, and the asphalt deteriorated so fast. Now we figure
on six years between chip seal. We have a schedule and we try to stick to
it.”
Sticking to a schedule for critical infrastructure can
mean lowering the priority of some assets. For Efeortz that has meant
cutting back on maintenance of secondary roads.
“With the budget crunch of high oil prices we are
really focusing on main roads and not so much our gravel roads. If a one
of our mountain roads has wheel ruts in it but passable, and no one lives on
and it, we will let it go for maybe several years before smoothing it out
some,” he said.
Purchasing Strategies
Purchasing based on annual fixed-price contracts and
stockpiling resources are playing a key role in how people are managing
costs in the current environment.
“We buy fuel off the state or county contract, so fuel
costs have been a hit but not as big a one as I first expected,” Gamble
said. “On the other hand, PVC pipe went up significantly when fuel prices
went up, and is coming down more slowly. We are coming to grips with how to
deal with this.”
“We were stockpiling in several places, but we don’t
know if that really saves us money,” said Colleen Robbins in Bannock County,
Idaho. “We are actually tracking that as a separate project in PubWorks, so
we know what it cost us to stockpile, and does it make sense to do this.”
“At the end of our fiscal year we pre-purchase our
petroleum products, but this year we held off, buying gravel and chips
instead. We did not take as big a hit as we may have. We are working on
contracts for oil,” Robbins said.
For some, wages are another growing cost.
“Unemployment here is between 2 and 2.5 % so it is
tough to find quality people,” Gamble said. “We are doing a salary survey
in order to bring our wages to where we can keep our people and bring more
people on. It will cost more to do business for us. We will see if there
is a match between the increased cost for service and the added task-base
created by growth.”
The Role of PubWorks
“PubWorks allows me to see where my money is
being spent, Gamble said. “We have a lot of old drainage pipes. In some
cases we will be looking at the cost of repair versus the cost of
replacement. Information from PubWorks also shows me where we have spent
the most time and money on repairs, so I know where to put our efforts.”
PubWorks is also being used as a lever to request state
financial assistance. In Wyoming PubWorks is being used by the state’s
Local Technical Assistance Program to measure impacts of gas and oil
exploration on critical infrastructure in order to identify unfunded
needs.
“We are talking $40-50 million in unmet needs in
Johnson county alone,” Benner said.
“The state has come up with some grants for impacts
(from oil and gas exploration), which is a big help,” Meyer said. “We are
tracking funding on PubWorks, and are using those reports to bill the state
as part of the grant. We track other grants for other state agencies that
way, too.”
PubWorks also plays a key role in tracking service
calls.
“We had a pretty big snowstorm recently, and people
were calling and yelling because we were not getting their roads plowed the
way they want them to. This was a bad storm and we had a lot of roads to
cover,” said Tammie Herrick, administrative assistant with the Apache County
Engineer’s Office in northeastern Arizona. “I put all calls straight into
PubWorks (Service Calls module), then the
girls would pull the reports and give them to the road supervisor of that
area. It went well. The good thing is you can always look back on it and
make sure things were completed.”
According to Herrick, who until recently worked for the
justice court and previously clerked for an attorney, having a record of
work activities could have important legal implications.
Information Management
For most of the industry leaders we spoke with, the key
is managing information so that the data is meaningful.
“We reset-up our entire database system for projects.
Now our workers only have to tell us where they are, what they are in, and
what they are doing. We made it real simple for them. Our work crew manager
tells us what the project is for the day so we can track project costs,”
said Colleen Robbins, with Idaho’s Bannock County Road and Bridge
Department.
“Another thing we did differently this year was to
develop standard costs for things,” Robbins continued. “By developing
standard costs we could compare what it should have cost, and what it
actually cost, which tells us things like where we could have saved, and
where there are inefficiencies. On one project we had two loaders but no
one knew why. We can start to fix operational inefficiencies like that.”
Copeland agreed saying, “I would imagine that most
everyone faces the same challenges. One of those is identifying true costs.
In your equipment you need to include maintenance and replacement cost just
like they do it in private sector. True cost for people includes is hourly
plus training, benefits and recruiting,” noted Copeland.
Here at Tracker Software Corporation, we are a proud
partner in helping you to track the true costs of your people going places
and doing things: the triad of all infrastructure management.
Table of Contents Volume 2, Edition 1
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