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Home My WebLink AboutMINUTES - 06131989 - 1.62 1-062 Tb: BOARD OF SUPERVISORS Si L. Contra FROM: Phil Batchelor, County Administrator Costa of _ i5 County DATE: June 6 , 1989 SUBJECT: RECOMMENDATION OF PRODUCTIVITY INVESTMENT FUND PROPOSAL FOR 1989-1990 SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION- Approve proposal and expenditure of $29 , 000 in Productivity Investment Funds for General Services Department Productivity Project as recommended by the Productivity Investment Board. FINANCIAL IMPACT: Funding for the Productivity Investment Fund Project is budgeted in the 1988-1989 budget, will be repaid to the Fund within two years and would substantially improve the productivity of printing services. BACKGROUND: For the last two years, your board has approved Productivity Investment Fund projects for several departments which have improved the efficiency and effectiveness of their operations. The Productivity Investment Fund program is designed to encourage departments to explore ways to improve productivity and efficiency in handling their increased workloads. The program generates a saving in cost to the department' s operation. The General Services Department submitted a proposal to the Productivity Investment Board in April. This project would purchase a new printing press which will more than double the output of the largest press in the department and with a higher quality product. The department would pay back the fund through savings in maintenance costs from three old presses over a two-year period. The older presses will be sold when the new press becomes operational. On May 2, 1989, the Productivity Investment Board approved the proposal, and the County Administrator concurs with the Productivity Investment Board' s recommendation. The attachment provides details on the project. o0o y� �y1 CONTINUED ON ATTACHMENT: ✓ YES SIGNATURE: ,�v• X li✓'«� —RECOMMENDATION OF COUNTY ADMINISTRATOR _RECOMMENDATION OF BOARD COMMITTEE APPROVE —OTHER SIGNATURE(S): ACTION OF BOARD ON APPROVED AS RECOMMENDED A OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE UNANIMOUS(ABSENT AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. CC: C A O ATTESTED JUN 13 1989 Auditor-Controller PHIL BATCHELOR,CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR M382 (10/88) BY ,DEPUTY -2- This project is viewed by the County Administrator as exempt from the freeze because the equipment costs will be offset by reductions in maintenance costs. Moreover, the department will achieve long-term productivity gains through this equipment upgrade, resulting in improved printing services to departments at reduced costs. COUNTY OF CONTRA COSTA PRODUCTIVITY INVESTMENT FUND PROPOSAL t PIF I .D. NUMBER DATE RECEIVED COMPLETE INCOMPLETE _ 1 . DEPARTMENT: General Services 1A. BUDGET/ORG UNIT0148 2 . PREPARED BY: Kathy Brown 2A. DATE 4/27/89 3 . CONTACT: Armand Wolff 3A. PHONE 5521 Reduction of Printing Maintenance Costs , 4 . PRODUCTIVITY INDICATOR: Improved Quality .of Output , Faster Turnaround For Printing 5 . PROJECT ANALYSIS: BASE YEAR YEAR PERIOD ONE TWO a . ANNUAL NET COST OF CURRENT OPERATION PROCESS (Attach cost analysis to include: staff , equipment, supplies, $16 , 222 1$20, 522 $22 , 061 and revenues) b. ANNUAL NET COST OF OPERATING , WITH PROPOSED IMPROVEMENT $16 , 222 6 ,420 6 891 C . DOLLAR BENEFIT -0- 14 , 102 15 , 170 ( Subtract b from a) STAFF -0- -0- -0- SAVINGS AND REVENUE EQUIPMENT BREAKDOWN SUPPLIES -0- -0- -0- OTHER d. TOTAL FUND NEEDED TO IMPLEMENT IMPROVEMENT $29 , 000 -0- -0- e. INVESTMENT FUND REQUESTED FROM PIF 295000 -0- 6 . MONTHS TO FULLY IMPLEMENT PROJECT: Approximately 3 months to bid out and receive new press . 7 . MONTHS TO FULLY PAY BACK PIF: 24 after installation -allation 8 . DEPARTMENT HEAD SIGNATURE: � 5( w DATE: `ZU` **************FOR PRODUCTIVITY INVESTMENT BOARD USE ONLY**************** BENEFIT/COST RATIO: PAYBACK PERIOD: TRANSFERABILITY: 1 2 3 4 5 GENERAL FUND: YES NO RECOMMENDATION: APPROVED NOT APPROVED SIGNATURE: CHAIRMAN, PRODUCTIVITY INVESTMENT BOARD Addendum to the Productivity Investment Fund Proposal from General Services Department Page -1- NEW PRINTING PRESS I . Action Plan A. Objective The objective is to reduce the printing maintenance costs, improve the quality of printing output, and provide faster turnaround time for printing materials. This can bel accomplished by disposing of three of the printing presses at Central Service and replacing them with one new printing press which has double the output of the largest press to be discarded. This will save the cost of the maintenance on the three presses and will also save projected costs to rebuild the equipment, as recommended by the manufacturer. The dollar savings in maintenance costs for two years are estimated to be slightly over $29 , 000 . The quality of the printed material is much better on the new press, and the turnaround time for the work will be faster both because of the faster output and because of the reduction of down time for the old equipment. B. Background At Central Service, there are six printing presses which are all between 11 and 21 years old. Sometime before the current manager was hired, a decision was made to start using an independent maintenance person to do the maintenance and repair of the equipment. Because of this approach, which saved money at that time, the equipment has not been maintained to the level that the manufacturer recommends and has had breakdowns continually. Multigraphics has refused to do repair work on the equipment because it is in need of overhaul and/or phasing out of service. The company is willing to continue repair of the equipment if it is refurbished according to their standards . Because of the significant down time of the equipment and difficulty of getting repairs for the presses, Central Service staff requested an evaluation by Multigraphics to refurbish the equipment so that it could be successfully maintained for a few more years. In doing so, staff also looked at the state-of-the-art printing presses and the feasibility of replacing some of the equipment with a new press. Because of the increased capabilities of new equipment, one new press can be acquired to replace three existing presses that are wearing out. Addendum to the Productivity Investment Fund Proposal from General Services Department Page -2- C. Approach To replace three printing presses 1250-105168, 21 years old, 4250-257773 , 16 years old, and 4975-325349 , 11 years old, and VIS replace them with one new printing press means the three I �Ia presses to be eliminated will no longer have maintenance charges, repair costs, and future rebuilding costs. The new equipment will be more reliable and cost less to maintain, particularly in the early years of its operation. ; Il . Control Plan By eliminating the three pieces of equipment and saving the d) ` ( ,, • maintenance costs for the repayment of the new printing press, the repayment schedule should be paid as projected. While additional savings may also accrue because of not needing to repair the equipment to be replaced, faster turnaround time, less down time, and better utilization of staff are expected to result in additional savings. The latter savings are not needed to make payments on the press. The maintenance savings on the three presses will pay for the requested press. III . Implementation Schedule Implementation will be accomplished through a request for Purchasing to request bids for the press and then to have the accepted bidder install the equipment as soon as possible. This could take up to three months, depending on the bidding process and where the equipment is purchased. IV. Proposed Pay-Back Schedule We are recommending that the productivity fund be credited with repayments on a quarterly basis as shown below: Repayment Date Repayment Amount October 1, 1989 $ 3 , 525 . 50 January 1 , 1990 3 , 525 . 50 April 1 , 1990 3 , 525 . 50 July 1, 1990 3 , 525 . 50 October 1, 1990 3 ,792 . 50 January 1, 1991 3 ,792 . 50 April 1, 1991 3 ,792 . 50 June 30; 1991 31792 . 50 $ 29 , 000. 00 i 4 •• 4 Addendum to the Productivity Investment Fund Proposal from General Services Department Page -3- V. Impact on Other Departments This has no negative impact on any department as a result of implementing this project, rather it will allow for Central Service to improve its turnaround time and quality for printing work done for County departments.