DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT: ELIMINATE BACKLOG OF VACANT BUILDINGS NEEDING BOARDING AND CLEANING

6-A – 6-E
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT: ELIMINATE BACKLOG OF VACANT BUILDINGS NEEDING BOARDING AND CLEANING
Problem Identification:
The city currently has an estimated 3,500 unprocessed work orders for cleaning, boarding and property maintenance of vacant buildings. With current staffing levels in HCD (Property Management) and the performance of the six current non-profit contractors, the backlog of un-boarded vacant buildings is increasing.

Recommended Action:
Board the 3,500 un-boarded vacant buildings by contracting on pay-on-performance basis.- Standardize priorities for buildings to be boarded and cleaned based on: (a) the condition of the building; and (b) the location of the building (proximity to other vacant buildings ‘ to achieve economies of scale).

– Review and revise written standards of performance to high level of detail (e.g., use screws rather than nails to discourage removal of boards, plywood thickness, etc.).

– Establish standard price(s) for successful completion of cleaning/boarding of each type of building based on written performance standards. Establish and budget performance premiums for quantity and timeliness, and offset HCD funding to subcontractor from other sources (e.g., job training grants). Seek additional, non-federal sources of funding for paying contractors.

– To increase the competitiveness and performance of contractors, re-bid the cleaning and boarding contract after re-writing the RFP to emphasize performance as well as cost minimization. Each contractor should also demonstrate good working relations with the assigned neighborhoods and have a written plan for community involvement.

– Negotiate volume purchase of materials for boarding (e.g., plywood, tools) using city purchasing power or seek donations from lumber yards in exchange for advertising on boarded building openings.

– Maintain existing HCD Property Management staff (currently responsible for boarding) to monitor work performed by contractors and to conduct emergency boarding as necessary. (As the quality and capacity of contractor work improves over time, they can perform emergency boarding, thereby allowing a further reduction in headquarters staff.)

– Assign a DPW truck and crew to each cleaning/boarding crew to increase productivity by eliminating the staging of trash in yard or alley. (For maximum efficiency, DPW would contract the hauling function to the same nonprofit contracted by HCD to perform the cleaning/boarding function.)

– Recycle materials to be discarded. (See Recommendation 7-F on recycling and demolition.)

Classification:
Cost Savings, Organizational, Service Improvement

Function/Operation Area:
HCD Housing Inspection – Property Management

Estimated Annual Impact:
$4.7 million in opportunity cost savings to the city (see analysis below).

Estimated Implementation Costs:
$1.77 million in Year One and $1.0 million per year thereafter.

Projected Implementation:
90 days

Next Steps:
Review written performance standards, including performance standards for incentive bonuses. Establish job cost, standard job price, premium price for incentive bonus. Negotiated contracts should include regular performance reviews and annual renewals based on performance.

Analysis:Costs:

Incremental cost per building of cleaning and boarding

$612 (estimated job cost) – $408 (current blended subcontracted cost) = $204
Current Run Rate (5,200/yr.) X $204= $1,060,800
Backlog (3,500) X $204= $ 714,000

Total Costs $1,774,800


Benefits:

1) Reduce drag on real estate values in neighborhood.

2)Reduce cost of criminal activity in these buildings.

3)Reduce cost of police responses to criminal activity in vacant buildings.(8)

(Anecdotal: 5% of police time devoted to responding to calls regarding
vacant buildings)

Average salary per police officer: $41,030/yr
Fringe Benefits: $14,360 (9)
Average cost of police cruiser: $13,000/yr (10)
Number of officers on patrol: 1,826

$41,030 + $14,360 + $13,000 = $68,390
$68,390 X 1,826 = $124,880,140
$124,880,140 X 5% $6,244,007

[NOTE: This figure does not represent actual cost savings
but the amount of fully loaded labor costs that can be
allocated to other productive law enforcement activities.
It is the equivalent of having an additional 113 Police Officer FTEs]

4)Reduce cost of fire department responses to fires in vacant buildings

Current average salaries of firefighters: $39,500/yr
Fringe benefits: $13,825/yr

Average no. of persons per call: 4
Fully loaded salary costs per response: (($39,500 + $13,825) X 4 )780 = $273.46
Average cost of fire engines: $209,000 (average cost of regular fire engine)
+ $494,000 (fire engine with hook and ladder) = $703,000 2 = $351,500
Straight-line amortization period for fire engines: 20 years
Annual amortization: $17,575/year
Cost of fire engine allocated on a per-response basis: $22.53

Average cost per response: $273.46 + $22.53 = $295.99
Assume current cost: 2.14 responses per day X 365 days =
780 responses per year X $295.99 $230,872

[NOTE: This figure does not represent actual cost savings
but the amount of fully loaded labor costs that can be
allocated to another purpose.]


TOTAL BENEFITS $6,474,879

Net Benefits to the City $4,700,079

(fully loaded labor costs of personnel resources that can be allocated more strategically)

(8) Information on police time spent responding to calls regarding vacant buildings, salaries, and annual police cruiser costs (including amortization rate) obtained directly from the Baltimore Police Department.
(9) Assumes fringe rate of 35%
(10) Although the cost of police cruisers is roughly $22,626 (including equipment, lights, etc.), the Department leases vehicles from the City at $.71/mi. which includes service, repairs, fuel, and replacement costs. This generally works out to approximately $13,000 per year.
(11) Average responses to calls regarding vacant buildings, salaries and actual costs for fire engines and amortization rates obtained directly from the Baltimore Fire Department.