file photo by Boyd Loving
Tiger Team Recommendations : Evaluate Outsourcing Services of the Central Garage
The Village Council is expected to discuss the future of the Central Garage in December 2012. The Central Garage is located on over 1.3 acres in a commercial zone on Chestnut Street north of Franklin Ave, below and along the rail line that bisects the Village. As a Village owned property, the large lot is tax-exempt. The facility is responsible for maintaining Ridgewood’s fleet of Village vehicles. The 2012 budget for the Central Garage was $802,763.
In our discussions with Village representatives, we learned that the Central garage has high costs from Workman’s Comp and the facility is highly capital intensive. It was clear from our conversations that the Central Garage is widely viewed as operationally and financially inefficient.
The Ridgewood News reported on November 4, 2012 that the “Village Council unanimously approved the appropriation of $40,000 from the municipal capital account for (a project to purchase and install a new hydraulic lift), which has a total sum in excess of $76,000.” In the article, the Village Manager defended the purchase and answered a question about why we could not use a neighboring municipality’s lift, by explaining, “for us to take our vehicles to another municipality when our full fleet staff is here, that would be difficult…every single opportunity, we explore shared services.”
We understand that “borrowing” another municipality’s lift is not a practical solution. However, the right questions do not appear to have been asked. We do not believe that the Village has scratched the surface of exploring “every single opportunity” for shared services. As Village management acknowledged, they do not account for the cost savings and/or benefits that may be realized through shared service arrangements. Nor, according to Village management, are shared services usually entered into for economic efficiency. This should be the primary reason for entering into shared services.
This is an example of how the lack of a metrics-based management process in Ridgewood results in inefficient expenditures. The failure beyond repair of a major piece of essential equipment and the prospect of a capital expenditure that will add almost 9.5% to the Central Garage budget in 2012 provides an appropriate opportunity to evaluate long-term alternatives for the Central Garage. If a long-term Strategic Financial Plan was in place, we expect that two questions would have been posed; 1) Can we afford to replace this piece of equipment? And, 2) Is replacement the most appropriate or cost effective solution? When considering the alleged inefficiency of the Central Garage and its long-term impact on the budget, our view is that the answer to both questions is probably “no”.
Ridgewood has an existing fleet maintenance contract with Paramus at a labor rate of $65/hr. Under the Paramus contract, Ridgewood is billed for parts at the state contract rate (40% discount), which is the same as Ridgewood’s cost. According to the Village Manager, the Village has a high level of satisfaction with the quality of work and responsiveness provided by Paramus. Since an external service provider would bill the Village only for time actually spent repairing Village vehicles (eliminating non-productive hours), we believe the services provided by the Central Garage could be delivered more cost effectively by outside providers at a substantial savings, which would offset any perceived convenience offered by the Central Garage. Thus, we recommend that the Village Council evaluate outsourcing the services to at least two (2) neighboring municipal garage facilities by expanding Ridgewood’s fleet maintenance contracts with Paramus and/or establishing new ones.
If a thorough cost/benefit analysis, endorsed by the FOB, supports our view and these services are outsourced, we recommend that the land be leased (not sold) for commercial redevelopment in a way that thoughtfully addresses needs within the Village while generating a sustainable source of revenue. Given the zoning of the area, proximity to the rail line and numerous proposals for housing developments currently in-process in the Village, we are not convinced that this is a suitable site for an additional multi-family housing development.
















