INTERNATIONAL IDEA EXCHANGE

The Congress experience of representatives from Slovakia and Czech Republic

Dr. George Jiri Neuzil
Director of Public Works
Sternberk, Czech Republic
Member, Czech Republic Public Works Association

The APWA International Affairs Committee (IAC) presents this series of articles to assist in the exchange of ideas between our international partners. This article is presented as part of the partnering agreement in place between APWA and the Slovak Public Works Association, with one of their Vishigrad Four partners.

SPWA has a collaboration agreement with public works associations in the Czech Republic, Poland and Hungary. These four countries are known as the Vishigrad Four. The Czech Association has requested that we consider an agreement with them. The IAC is exploring the extension of the SPWA Agreement to include the V-4 countries.

This article is written on behalf of delegates from the Slovak and Czech Republics, Milan Podzuban and Dr. George Jiri Neuzil, respectively, who attended the APWA Congress in San Diego.

At the beginning of this year, after meetings of the Czech and Slovak Public Works Associations, we accepted the invitation of APWA to visit the Congress in San Diego. It was decided that their delegation would have two representatives: one from the Czech Republic and one from Slovakia. In July 2003 the Czech board chose me, and Slovakia delegated Milan Podzuban. We coordinated our activities such as visa, transport, accommodation, and presentation with each other and with APWA staff. It was a great pleasure to cooperate with Geoff Greenough [Commissioner of Engineering and Public Works, City of Moncton, New Brunswick, and former APWA President and Chair of the IAC], Kaye Sullivan [APWA Deputy Executive Director], and Diana Forbes [APWA Meetings Planner/Exhibit Sales Manager]. Everything was coordinated by e-mail and at the end everything came together.

Our trip from Prague via Paris and Dallas to San Diego was quite easy, except for my luggage which chose another way through Chicago. I met my suitcase finally after 24 hours. We landed in San Diego on August 22. At the airport we were met by Julio Fuentes [Senior Traffic Operations Engineer, City of San Diego and member of IAC and local Conference Committee] to take us to the hotel.

The first day we enjoyed meeting our e-mail friends personally: Mr. Greenough, Jimmy B. Foster [Director of Public Works, City of Plano, Texas, and Chair of the IAC], Ms. Sullivan and Ms. Forbes, who helped find my suitcase. At first we visited the Convention Center and, of course, the old village and port, including the Star of India yacht. We went to sleep soon after because we were so tired. The time difference between middle Europe and San Diego is eight hours.

Dr. George Jiri Neuzil makes a point during the IAC meeting at the 2003 Congress in San Diego.

On August 24 we were looking forward to the starting ceremony "in Hollywood style" and meeting the new APWA President, Dwayne E. Kalynchuk, and other members of the APWA Board of Directors. The system of Congress organisation was perfect and the speakers' staff helped us to prepare our presentation on Sunday afternoon. Milan and I spoke about our Czechoslovak-American history, organisation of public works in our countries, privatisation after the "Velvet Revolution" in 1989, trends in public works in Eastern Europe, and our business. Milan added the information about his product, waste-separating containers. The discussion that followed showed us your members' interest in our recycling program, especially the system of waste collecting, separating and reusing. We use a different system in collecting, sorting and reusing materials, and public relations. Everything is supported by special fund financed by the packaging industry. Maybe it is a topic for next year's presentations.

We spent all three days in the Congress, where we visited the exhibit hall, which was set up differently from exhibitions in Europe. Every day we chose General Sessions as well as special meetings we were interested in. We attended, for example, these presentations:

  • Liquid chemicals in winter maintenance by Bret Hodne
  • Tree and sidewalk solutions by Walt Warriner
  • Report about U.S. Department of Agriculture - Agencies and Services
  • Traffic signal preventive maintenance by Thomas Heck
  • De-manufacturing and recycling of electronics by Scott Cassel
  • Single stream recycling by Jim Close
  • Trends in recycling by Drew Sones

Every presentation was excellent. There are the common problems in winter maintenance, destroying pavements by old roots, and recycling of waste. Strong emphasis in America is also given to self-education, management, SMART system, psychology of mass media, and self-discovery. We were surprised by that. That is the greatest difference between public works conferences in Europe and the U.S. At European conferences and exhibitions the accent is given strictly to technical problems.

We were also present at the APWA International Affairs Committee meeting, where we discussed future activities and met the delegates from Mexico and Australia. It was a pleasure to meet them! It was important to hear different opinions from various parts of the world. The conference banquet at the end of the Congress was one of the highlights of the week.

The second part of our business trip continued at the City of Poway, a city of 50,000 located near San Diego. The warm host and hostess were Bradley and Susan Kutzner. Bradley is Assistant City Engineer in Poway and Susan is a teacher. Each day we spent our time doing business as well as pleasure. We visited the Miramare landfill, a composting plant, EDCO recycling and collecting company, a water treatment company in Poway, Public Relations Center in San Diego's Environment Department, and the investment department of Poway.

In pleasure time we visited the well-known San Diego Zoo, Anza-Borego Desert Park, and spent a wonderful time with Kutzner family on the beach by the Pacific Ocean to see sunset.

The business and pleasure trip to APWA's Congress in San Diego was very time-consuming, but we were very lucky to visit your Congress, visit your offices, discuss our problems together, and make a lot of new friends and partners.

Many thanks personally to Geoff Greenough, Dwayne Kalynchuk, Jimmy B. Foster, Kaye Sullivan, Diana Forbes, and Julio Fuentes who helped us. Special thanks to Bradley and Susan Kutzner who took care of us the following week.

We will organize an APWA members trip to Middle Europe in Spring 2004. I hope we will see many of you next year! Please refer to the sidebar article for more details on the Spring Conferences in Slovakia and the Czech Republic.

Dr. George Jiri Neuzil can be reached at remit@remit.cz and Milan Podzuban can be reached at podzuban@pecso.sk.

Spring Public Works Conferences in Slovakia and Czech Republic
The Slovak Public Works Association will hold their Spring Conference in Michalovce (eastern Slovakia next to the Ukrainian border) March 31-April 1, 2004. SPWA President, Peter Benes, extends a welcome to all APWA members.

The Czech Public Works Association, SPWA's regional partner, is planning their Spring Conference in nearby Sternberk, in the eastern part of the Czech Republic, on April 8-9, 2004.

The Slovak and Czech Associations have purposely scheduled these meetings one week apart so that international delegates can participate in both. Local conveners are also organizing visits to a number of municipalities in their respective areas before and after these conferences for international delegates. Both cities are close together. In planning for these conferences, international delegates could fly into Vienna/Bratislava, Budapest or Kosice, the closest airport to Michalovce, and return to North America through Prague. These cities are the major centers of arts and culture in Eastern Europe.

Michalovce, a modern Slovakian city with a rich history and interesting historic sights.

Michalovce is a modern Slovakian city with a rich history and interesting historical sights. It is the economic and cultural center of the low-Zemplin region. Because of its geographic location, it benefits from international trade. U.S. Steel has a large factory there. There are extensive opportunities for nature and history lovers/enthusiasts during their stay in this city and in its proximity. For more information, visit www.michalovce.sk/english.htm.

The Moravian town of Sternberk is situated in the lovely countryside at the foot of the Low Jeseni¬Ęk, 16 km to the north of Olomouc. It was established from the settlement under the castle, the same name which guarded a very important crossing of the trade routes. Sternberk has a population of 14,500 inhabitants, and is attractive with historic sights and surrounding scenic environs. For more information, visit www.sternberk.cz/eng/.

Why not plan your Eastern European holiday now to take in these two events?

The local conveners for these two events (Milan Podzuban and Dr. George Jiri Neuzil) attended our Congress in San Diego. You can read their article on page 13 which describes their visit and provides their contact information.

Anyone interested in these events should contact members of the APWA/SPWA Task Force or Geoff Greenough at geoff.greenough@moncton.ca for more details.

Best practices in plant and vehicle management

Grant Andrews
Managing Director
Uniqco International Vehicle Management
Bunbury, Western Australia

This article is presented as part of the partnering agreement between APWA and its Australian counterpart, the Institute of Public Works Engineering Australia (IPWEA). The APWA International Affairs Committee proposes these articles to assist in the exchange of ideas between our international partners.

Introduction
In Australia, plant and vehicle management has been a neglected area of asset management in public works, often overlooked for higher value infrastructure assets such as roads, buildings, etc. However, the impact of the plant and vehicle asset goes well beyond its replacement value as many of the more recognised business operations in public works rely on a well-equipped and maintained fleet in order to provide a cost-competitive business operation.

Issues such as right-sizing the fleet, replacing equipment, knowing when to hire and when to lease or purchase, demand more attention now than in the past. Effective fleet management today goes well beyond simply fixing vehicles when they break down or replacing them according to policy. It involves establishing programs to preserve the value of equipment investments, minimising the incidence of unscheduled repairs, and collecting, analysing, and reporting necessary data so that informed asset management decisions can be made.

Best practices in vehicle and plant management are the same all over the world and revolve around high utilization, minimum downtime, and astute buying decisions.

Key performance indicators in plant and vehicle management

(1) Utilization. Utilization refers to the annual usage of a particular item of fleet and is generally measured in terms of either kilometres/miles travelled or engine hours.

Base utilization data is the level of utilization set to generally justify ownership of any item of fleet. Low utilization needs to be investigated as it may reach the point where it becomes less than economical to own the vehicle or plant item. This decision is also very dependent on geographic location, and access to hire plant and fleet. The decision to own or hire will be influenced by issues such as:

  • Is the item essential to provide a service?
  • Is a suitable dry hire machine available for short-term hire?
  • Are contractors able to provide the service at a competitive cost?
  • Is there an opportunity to increase the utilization through smarter management?
Knowledge of actual utilization in kilometres or engine hours (levels and usage patterns) enables the fleet manager to:

  • Service vehicles based on manufacturers' recommended service intervals (programmed maintenance).
  • Track actual use versus employee (timesheet) labour allocations to optimise operational requirements.
  • Develop a floating replacement program to reduce costs in periods of lower activity, and change plant at the optimum replacement point.
  • Develop accurate budget forecasts by using actual utilization in whole of life costing.
(2) Optimum replacement points. Optimum replacement points are calculated to best estimate the optimum timing in both kilometers/miles (or engine hours) and time to achieve the lowest average annual cost.

In order to accurately manage optimum replacement data, the following information is required:

  • Purchase price of the equipment
  • Projected resale values over the next 10 years
  • Projected finance costs over the next 10 years
  • Projected repairs and maintenance costs over the next 10 years
  • Current operational downtime costs for the plant (these must include displaced operators and other works held up, standing costs for the plant item concerned)

The optimum replacement point in the life of the plant item can be depicted graphically when the decreasing line of resale value intersects with the increasing cost of repairs and maintenance.

Actual resale values will show two distinct falls in the life of the item. The first significant drop is immediately post-purchase. The second drop in resale value is prior to a major component overhaul where secondhand buyers are aware of a large impending maintenance bill.

In this example of resale value over time, year five sees a substantial drop in value entering year six and a corresponding increase in maintenance at the same time. The net result is optimum replacement in Year 4.

By calculating the ideal optimum replacement points for equipment, the fleet manager is achieving the lowest cost alternative available during the life of the machine.

(3) Whole of life costs. Having established the optimum point at which to replace the vehicle/equipment, the next management tool is obtaining whole of life costs.

Whole of life costs include:

  • Straight line annual depreciation, to an anticipated residual.
  • Finance or opportunity costs.
  • Operating costs, tires, fuel, repairs and maintenance.
  • Fixed costs, overhead recovery, insurance, wages, licensing.

Whole of life costs will reflect how much of the equipment's annual costs will be based on utilization and an optimum replacement point that has already been established. The annual costs calculated will provide a projected (budget) annual cost for the life of the equipment.

A simple spreadsheet (see chart at left) can be used to develop whole of life costs and provide an estimate of the total annual cost of an item of plant.

By dividing annual cost by the employee (timesheet) labour hours used to recover the cost of operating plant, internal chargeout rates can be determined. These rates when applied will provide the appropriate recovery of costs to a plant replacement reserve to fund future plant replacement at the optimum time.

From knowing whole of life costs, the fleet manager can provide:

  • Annual maintenance budget
  • Annual replacement provision
  • Annual operational costs
  • Internal recharge rates

(4) Downtime costs. Sometimes called the hidden cost of fleet management, downtime costs can be substantial and owner/operators need to be aware of how machine downtime can affect productivity.

Downtime costs have two major components:

  • Hire of a replacement machine. This also incorporates the cost of holding additional machines in order to compensate for downtime on other machines. Hire of an externally-supplied machine may involve onsite and offsite charges, and these to need to be incorporated into the hire charges. Including the cost of providing an alternative machine to carry out the service within the optimum replacement calculation will ensure that the real cost of downtime is captured.

  • Fixed costs related to the loss of an operational machine on a specific task. The fixed costs of a machine are the costs incurred as a result of ownership. In addition to the fixed costs related to the plant, it is necessary to establish a cost related to operator downtime.
By monitoring and recording downtime and its cause, the fleet manager will establish a reasonable cost associated with that downtime. Once the cost of downtime is established, preventive maintenance planning, operator training and optimum replacement of plant can be calculated to obtain the lowest operational cost.

(5) Maintenance failure records. All failures should be investigated and documented. Being aware of the cause of the failures enables the operational manager to become proactive in his/her approach to staff training and correct equipment application. Improvement in these areas will reduce costs and make the equipment available for use more often.

Categories include failure due to:

  • Lack of daily maintenance; no greasing, no daily checks carried out, or tire damage caused by incorrect tire pressure.
  • The age of the machine.
  • The daily operational requirements of the machine.
  • Design fault (normally appears during the warranty period).
  • Operator inattention or inexperience on the machine.
By recording the cost of these failures, managers are able to put into action planned maintenance, training, or other procedures to reduce the impact of the failures.

(6) Flat rate repair times. Flat rate repair times refer to an adopted industry standard for the expected repair time for a maintenance task. The term is applied by the vehicle repair industry to every task undertaken in the repair and maintenance of machinery.

Experience has shown that without flat rates and audit procedures to control labour hours, fleet managers are likely to find that repair and maintenance costs are excessive.

Service books supplied by manufacturers normally have flat rates supplied for every service. Automobile associations also normally have excellent guidelines of flat rate establishment.

Conclusion
Through proactive management of plant and vehicles, fleet managers can substantially lower the cost of fleet and plant operations. The six basic measurement tools presented in this article can be easily established and without sophisticated software. However, they do need to be managed on a daily basis to ensure that costs are kept to a minimum.

Good fleet management is about high utilization, optimum replacement, and accurate whole of life costs, minimum downtime, proactive failure management, and adherence to labour flat rates by service and repair providers. Managers can use these simple measurement tools to both reduce costs and optimize operational availability of plant, vehicles and equipment.

Grant Andrews can be reached at grant@uniqco.com.au.

APWA member Cameron Berkuti helping rebuild the infrastructure in Iraq
"This is my mission...something I have to do," said APWA member Cameron Berkuti before he left for Iraq. "It's part of my passion," he continued. Cameron Berkuti is the Director of Public Works in La Mesa, California, but he is currently on an eight-month assignment with the International City/County Management Association to help rebuild the infrastructure of Iraq.

Cameron signed off one of his recent e-mail messages from Iraq with "Written by an Iraqi-born but proudly American citizen in Iraq as a part of building Local Governance." That very clearly states his objective. Cameron is a 48-year-old Kurdish-American who knows Iraqi culture, history and languages. Although Cameron will be guiding the construction of new water and electricity systems, he will also help teach Iraqi government administrators how to organize their budgets and plan for maintenance.

After arriving in Iraq, Cameron observed, "Our soldiers won the respect of people because they have been respectful to the people of Iraq. They not only liberated the people, but they started mentoring and coaching Iraqi civil servants on how to run their daily affairs. Iraqis are governing themselves. Iraqis do not want us to leave them prematurely to the whim of stronger forces. Iraqis want to see, feel and practice democracy before we leave."

Building a combined sewer system in Kirkuk, Iraq

In a recent message Cameron requested some assistance. The newly-formed Kirkuk Employment Service Center has designated a building for a vocational training center. The purpose of the center is to develop the vocational skills of a large number of unemployed people and give them employment opportunities in the new Iraqi economy. They are looking for firms in developed countries to set up or design the center and the names of some firms that they can approach for the donation of tools and equipment. Would you like to help? You can help build a good relationship between Kirkuk public works professionals and those in North America. The center needs shop design, layout, setup, equipment, training materials, and training of the trainers.

Look for more about the experiences of Cameron Berkuti in future editions of the APWA Reporter.

Contributed by Jimmy Foster, Chair, International Affairs Committee

Cultural Proverbs

"Abundance, like want, ruins many." - Romanian Proverb

"Don't empty the water jar until the rain falls." - Philippine Proverb

"Get what you can and keep what you have; that's the way to get rich." - Scottish Proverb