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Home My WebLink AboutCOM 0279.001 2010-2012Limited Scope Performance Audit of the Department of Parks and Recreation's Facilities Asset Management A Report to the Hawai`i County Council July 2011 OFFICE OF THE LEGISLATIVE AUDITOR COUNTY OF HAWAII The Office of the Legislative Auditor would like to thank the Department of Parks and Recreation for its cooperation. We'd like to also recognize the hard work and dedication of the Department's staff, especially that of the Parks Maintenance Division. MAHALO! Comm. No. /1°1.1 Ref. To:''' "1141 , PhIPPLI Ref. Date AUG 2 2011 The audit focused on asset management of recreational facilities due to the financial and safety impacts and the potential for improvement. "Asset management is maintaining the desired level of service for what you want your assets to provide at the lowest life cycle cost. Lowest life cycle cost refers to the best appropriate cost for rehabilitating, repairing or replacing an asset. Asset management is implemented through an asset management program and typically includes a written asset management plan." The U.S. Environmental Protection Agency (EPA) "[Asset management is] a methodology needed by those who are responsible for efficiently allocating generally insufficient funds amongst valid and competing needs." The American Public Works Association 2 WHERE ARE WE TODAY? LIKE MANY GOVERNMENT ORGANIZATIONS NATIONWIDE, THE COUNTY'S HISTORICAL ASSET MANAGEMENT PROCESSES HAVE LEFT FACILITIES DETERIORATED THE CURRENT PARKS AND RECREATION (P &R) ADMINISTRATION INHERITED AN INVENTORY OF FACILITIES FOR WHICH MAINTENANCE HAS BEEN DEFERRED FOR YEARS 3 Rusting and leaking roof at Pahala Community Center Rusting and leaking roof at Yano Hall 4 NO SKATEBOARDING BICYCLING ROLLU $I r. IYG SCOOTER RIDING ALLOWED Leaking roof at Pahoa Neighborhood Facility 5 Termite leavings at Hawaiian Beaches Park Peeling and leaking roof at Edith Kanaka'ole Stadium Note: Roof repairs were conducted in March 2011 6 Ground termite damage at Hilo Municipal Golf Course Rusting supports within Quonset Hut at Waiakea Recreational Center 7 Tarp diverting leaks at the Waiakea Recreational Center Rusted and leaking roof at Gilbert Carvalho Park Gym 8 GYM AIEOiO Of AR: BOARDS., RD NOLEACAPPS, SCOoTpLL EICVOLES PPON9REn Hi �'. PAVILION OR ON'WAUlw;,rL. Peeling and flaking paint at Gilbert Carvalho Park Gym Rusted roof at Pana'ewa Equestrian Center 9 Sky visible through roof at Papa'ikou Gym 10 Rusting and leaking roof at Honoka'a Gym CONTINUED DEFERRAL OF MAINTENANCE AND REPAIR ACCELERATES DETERIORATION AND INCREASES REPAIR COSTS Structural failures occur Structure not usable Start of major failures 4S C/ Start of minor failures Normal wear A 1— — — / Time in years Total cost of major repair (C) Total cost of minor repair (B) Total cost of preventive maintenance (4) Major repair Mina repair Preventive maintenance Diagram from Preventive Mainkrunce of 8uiklinps, Var: NostrandP nhokl, New York, 1991. 11 BUILDINGS WERE BUILT IN THE PAST WITH MATERIALS NOW DETERMINED TO BE HAZARDOUS Sign indicating asbestos at Na'alehu Community Center Building with lead paint at Na'alehu Community Center 12 OLDER FACILITIES NEED IMPROVEMENTS TO MEET CURRENT AMERICANS WITH DISABILITIES ACT (ADA) REQUIREMENTS THE PUBLIC IS AFFECTED BY FACILITY CONDITIONS • Some games and community events have been cancelled or stopped midway. • Buildings or building sections have been closed due to the presence of hazardous materials. 13 FACILITY CONDITIONS MAY LIMIT ACCESS Torn -up walkway may pose an ADA access issue at Kailua Park FACILITY CONDITIONS MAY POSE PUBLIC HEALTH AND SAFETY RISKS Rusted - through handrail at Kailua Park 14 Tarp diverting rainwater from electrical box at Honomu Gym Fallen fencing around building with lead paint at Na'alehu Community Center 15 WHERE DO WE NEED TO GO? Although the current Administration inherited many of the facility problems, it is now their challenge to implement new processes that will stop further deterioration and permit a planned approach to returning facilities to a condition that will meet the Department's goal of providing safe, clean, enjoyable, accessible and aesthetically pleasing facilities. 16 THE COUNTY NEEDS TO RECOGNIZE THE IMPORTANCE OF TIMELY MAINTENANCE AND REPAIR The Building Research Board suggests that a major element of the building maintenance and repair problem is the difficulty that public agencies face in trying to convince those responsible for public policy decisions that neglected maintenance can lead to public health and safety issues, reduced productivity of public employees, and long -term financial losses as buildings wear out prematurely and must be replaced. THE COUNTY NEEDS AN INTEGRATED OVERALL PROCESS TO FACILITATE ADEQUATE CRITICAL MAINTENANCE AND REPAIRS OF FACILITIES Facility inventory Condition assessment Project evaluations Resource, cost, time, and current value estimates Performance reports Customer needs analysis Customer survey results Planning Strategic plan Project ranking Asset management plan - Maintenance plan - Backlog plan • Hazardous materials plan - ADA access plan Performance measures Proposed budgets Monitoring Budgeting Project implementations Maintenance and repairs Inspections Work Order System Data collection Operations Operating budget Capital Improvement Programs (CIP) budget 17 P &R NEEDS TO DEVELOP THE COMPONENTS NECESSARY TO EFFECTIVELY MAINTAIN, REPAIR, OR REPLACE FACILITIES FACILITY INVENTORY CONDITION ASSESSMENT COST ESTIMATES _Ei_ PRIORITIZATION /RANKING ASSET MANAGEMENT PLAN - BACKLOG PLAN - ADA ACCESS PLAN - HAZARDOUS MATERIALS PLAN - MAINTENANCE PLAN STATUS REPORT THE FACILITIES INVENTORY SHOULD LIST INDIVIDUAL BUILDINGS AND KEY COMPONENTS The current inventory does not include individual structures and key components. The Government Finance Officers Association (GFOA) recommends: "Developing a policy to require a complete inventory and periodic measurement of the physical condition of all existing capital assets." 18 P &R NEEDS A FACILITIES CONDITION ASSESSMENT National Research Council (NRC) advises that the assessment of the current condition of each major component is necessary to determine the need and timing for preventative maintenance and replacement schedules. P &R SHOULD ESTIMATE COSTS FOR ITS DEFERRED MAINTENANCE AND REPAIR BACKLOG BASED ON AN INVENTORY AND CONDITION ASSESSMENT P &R reported to the Council in 2008 that it estimated remediation of its deferred maintenance and repair backlog at approximately $80 million based on a list of repairs from about 2004. P &R noted: "That list was not maintained and no new spreadsheet prepared that could provide a more realistic or accurate picture of the current state of the department's major maintenance needs." 19 P &R SHOULD UPDATE ITS 2004 -2009 STRATEGIC PLAN "Strategic planning can be an opportunity to unify the management, employees, stakeholders and customers through a common understanding of where the organization is going, how everyone involved can work to that common purpose, and how we will measure our progress and levels of success." The Government Performance and Results Act of 1993 enacted by the 103rd U.S. Congress P &R SHOULD DEVELOP AN ASSET MANAGEMENT PLAN P &R identified the need to develop a 5 -year plan for facilities in its 2004 -2009 Strategic Plan, but it still needs to develop this plan to address maintaining, repairing, rehabilitating, or replacing its recreational facilities. This overall plan should include plans for facility maintenance, reducing the maintenance and repair backlog, ADA access improvements, and hazardous materials remediation. 20 P &R SHOULD DEVELOP A PLAN TO REDUCE ITS MAINTENANCE AND REPAIR BACKLOG P &R roughly estimated that its backlog of deferred maintenance and repairs is $80 million. P &R needs a plan for reducing the significant backlog. "Further deterioration will occur if the backlog is not reduced, and the ultimate cost of correcting the deficiencies will increase." National Research Council P &R SHOULD DEVELOP A HAZARDOUS MATERIALS REMEDIATION PLAN In 2008, P &R contracted with three consulting companies to identify and report on hazardous materials at each P &R facility. Consultant reports did not generally include recommendations as to methods of remediation or related costs. P &R needs to develop a formal plan to resolve hazardous materials issues identified in the reports. The plan should contain safety precautions, an inventory of hazardous materials by facility, cost estimates for remediation, and timelines for resolving hazardous materials issues. 21 THE ADA ACCESS PLAN SHOULD BE INTEGRATED WITH AN ASSET MANAGEMENT PLAN P &R contracted for the development of an Americans with Disabilities Act (ADA) assessment, and then prepared an ADA Access Plan. The ADA Access Plan should be integrated into an overall asset management plan for coordination of projects and for analyzing costs for making decisions on whether to rehabilitate or replace a facility. THE PARKS MAINTENANCE DIVISION'S MAINTENANCE PLAN SHOULD INCLUDE CRITICAL PERIODIC MAINTENANCE AND REPAIRS The Parks Maintenance Division has a good plan for routine custodial maintenance and routine work orders, but they need to identify and schedule appropriate critical periodic maintenance tasks such as fumigation, resurfacing, sealing, and painting buildings and metal roofs. A maintenance plan helps maintain the value of recreational facilities in the most cost - effective manner. Planning for routine and periodic maintenance is essential for the adequate upkeep of facilities. 22 P &R'S BUDGET PROCESS SHOULD INCORPORATE CONDITION ASSESSMENTS, COST ESTIMATES, PRIORITIZATION OF MAINTENANCE AND REPAIR NEEDS, PLANS, AND PERFORMANCE REPORTS IN ORDER TO ADEQUATELY BUDGET FOR MAINTENANCE AND REPAIR OPERATIONS AND PROJECTS BUDGETS SHOULD BE BASED ON PLANS /SCHEDULES MAINTENANCE PLAN - Routine Maintenance . - Periodic Maintenance BACKLOG PLAN 1 ADA ACCESS PLAN HAZARDOUS MATERIALS PLAN PROPOSED OPERATING BUDGET PROPOSED CAPITAL IMPROVEMENT PROGRAM (CIP) BUDGET 23 CIP FUNDING REQUESTS SHOULD BE BASED ON PLANS THAT ADDRESS CRITICAL REPAIRS P &R should base its CIP budget on a list and timeline of repair projects to ensure funds are expended for critical repairs, such as repairing or replacing leaking roofs. While facilities currently need critical repairs, $1.3 million of allocated CIP funding for Repairs /Improvements was not expended in Fiscal Year 2010 -2011. INTEGRATED CIP PROCESS Facility inventory Condition assessment Project evaluations Resource, cost, time, and current value estimates Performance reports Customer needs analysis Customer survey results Planning Strategic plan Project ranking Asset management plan • Maintenance plan • Backlog plan - Hazardous materials plan • ADA access plan Performance measures Proposed budgets Monitoring Budgeting Operations Project implementations Operating budget Maintenance and repairs Capital Improvement Inspections Programs (CIP) budget Work Order System Data collection 24 P &R SHOULD DIRECT AN ADEQUATE PORTION OF ITS BUDGET REQUESTS TO PREVENTATIVE MAINTENANCE IN THE PARKS MAINTENANCE DIVISION'S OPERATING BUDGET 25 OPERATING FUNDS SHOULD BE EXPENDED FOR PREVENTATIVE MAINTENANCE AND MINOR REPAIRS TO PREVENT THE DETERIORATION OF FACILITIES AND THE NEED FOR MAJOR REPAIRS REQUIRING CIP FUNDS P &R Maintenance Division's Operating Budgets for Miscellaneous Contract Services Budgeted Roof /Gutters Expended Roof /Gutters Budgeted Painting Expended Painting FY 2008 -2009 $25,000 $0 $6,000 $0 FY 2009 -2010 $35,000 $0 $6,000 $0 FY 2010 -2011 $0 $0 $0 $0 P &R SHOULD DIRECT AN ADEQUATE PORTION OF ITS BUDGET REQUESTS TO PREVENTATIVE MAINTENANCE IN THE PARKS MAINTENANCE DIVISION'S OPERATING BUDGET 25 PARKS MAINTENANCE OCE MISCELLANEOUS CONTRACT SERVICES Funds Budgeted and Expended for FY2006 -2007 through FY2010 -2011 FY 2006 - 2007 FY 2007 - 2008 FY 2008 - 2009 FY 2009 - 2010 FY 2010 - 2011 Budget Actual Budget Actual Budget Actual Budget Actual Budget Actual Facility lights $28,000 $7.730 $28,000 0 $25.000 0 $23,000 0 $22,000 0 Roof & Gutters $28,100 0 $30,000 0 $25,000 0 $35,000 0 $0 0 Painting $21,580 0 $10,000 0 $6,000 0 $6,000 0 $0 0 Fumigation $24,500 $93,709 $26,000 $44,075 $20,000 $7,198 $15,000 $5,969 $0 $6,608 Field Lights /R &M $26,000 26,566 $25,000 $39,947 $20.000 $31,186 $25,000 $13,326 $25,000 $16,445 Gym Lights /R &M $26,000 405 $25,000 0 $20.000 0 $25,000 0 $25.000 0 Playground Resurfacing $25,000 0 $23,000 0 $15.000 0 $20,000 0 $0 0 Outdoor Court Repairs $20,550 0 $20,000 0 $15,000 0 $20,000 0 $0 0 Kona Balfield Repairs 0 $25,000 0 $0 0 $0 0 $0 0 Other Totals $199,730 $128,410 $212,000 $84,022 $146,000 $38,384 $169,000 $19,295 $72,000 $23,053 Note: Figures in the chart above reflect only the budgeted amounts and actual expenditures for the specified category and not the entire P &R Parks Maintenance OCE Budget for each fiscal year. PREVENTATIVE MAINTENANCE REDUCES REPAIR COSTS Structural failures occur Structure not usable Start of major faiiures Start of minor failures Normal wear A Major repair Time in years Total cost of major repair (C) Total cost of minor repair (B) Total cost of preventive maintenance (A) Minor repair Preventive maintenance oiagrant horn Preventive Maintenance of Buildings, Van Nostrand Reinhold, New York, 1991. 26 THE PARKS MAINTENANCE DIVISION SHOULD SCHEDULE PREVENTATIVE MAINTENANCE The Parks Maintenance Division should develop a list and schedule of critical maintenance and repair activities, such as fumigation and painting metal roofs. All maintenance and repair activities should be tracked to completion in the Maintenance Work Requests system. P &R SHOULD COMPLETE PREVENTATIVE MAINTENANCE (PM) TO PREVENT THE BACKLOG FROM GROWING Backlog Grows Head /Budget Reductions PM is Mused Prey� F Aesourrtro taken by Breakdowns Band -aid Maintenance 27 P &R SHOULD IMPROVE ITS MONITORING AND REPORTING ON ITS PERFORMANCE The GFOA recommends: "Monitoring and communicating progress toward stated goals and the overall condition of its capital assets with appropriate controls to ensure the validity and accuracy of the information." THE COUNTY ADMINISTRATION AND COUNCIL COULD FACILITATE THE SUCCESS OF P&R'S ASSET MANANGEMENT EFFORTS BY: • Establishing the priority for maintaining existing assets and infrastructure. • Requiring the development of budgets to be based on long- term plans that recognize the importance of preventative maintenance. • Requiring that Financial Impact Statements include: - Ongoing maintenance costs. - Life cycle cost estimates and plans to reduce life costs. • Requiring relevant and quantifiable performance measures for long -term asset management. • Requiring project plans and status reports that clearly show timelines and progress. • Supporting adequate resource allocations and budgets for operations. 28 The County has an opportunity to establish a new direction regarding its facilities that reduces overall costs through using asset management best practices with a focus on preventative maintenance. P &R indicated that it has begun to implement recommendations. We'd like to thank P &R for using the audit as a tool to improve its asset management of facilities. MAHALO FOR YOUR TIME! 29