June 19th, 2018

HVAC hire would save money

By Collin Gallant on June 13, 2018.


cgallant@medicinehatnews.com
@CollinGallant

City administrators believe they can save at least $50,000 per year, and up to $100,000, by hiring new staff to maintain building ventilation systems rather than continuing to contract out the service.

They also told a committee on Tuesday that it’s the sort of cost-saving initiative managers have been “scared” to suggest in a climate of cost-containment combined with a public perception that private sector contracts save money.

“There’s been a fear of bringing back proposals that add staff, while in fact we’ve been losing money,” CAO Merete Heggelund told Tuesday’s meeting of the corporate services committee.

“We’re cutting our nose off to spite our face.”

The issue involves maintaining heating, ventilation and air-conditioning systems in city offices, arenas and other facilities.

In 2013, an audit by an outside management company into property management made the suggestion of adding a a third HVAC technician to handle overflow work that was awarded to outside firms on a call-out basis.

That recommendation wasn’t followed however, and now officials say two new full-time technicians are needed, and having them on the city payroll would save $13 per hour, multiplied by about 4,500 hours.

“We’ve looked at this from as many angles as we can think of while building the business case,” said commissioner Brian Mastel. “There is a perception in the public that the private sector is cheaper … but this is really an area where it makes sense to do it in house.”

Committee chair Coun. Robert Dumanowski said the higher level of scrutiny is beneficial, but the proposal appears to make sense.

“There’s a culture of scrutiny, and it takes some guts to say here’s the business case,” said Dumanowski. “It’s not about adding staff, it’s about making sense.”

The city currently pays a contract rate to private firms to provide HVAC service for $88 per hour, per position.

City managers estimate their cost per employee at $75 per hour, including wages, benefits and purchasing tools and equipment, said Mastel.

Coun. Darren Hirsch wondered if the new estimate of $75 per hour should be shopped out to firms to see if they could match or beat the price.

The city last revisited rates with local industry last year, said Mastel. The difference, $13 per hour, represents 15 per cent, which firms likely wouldn’t be able to beat, he said.

“I’m in favour of the (analytical) process that arrived at this conclusion,” said Hirsch. “I’m in favour of taxpayers having valuable services provided at an efficient price.”

The item will go to council for approval on June 18.

The city employs two techs, and would hire another two to work full time, adding about 4,100 hours of manpower and eliminating the need to call in contract work.

There’s also a benefit to having the same people working on the same systems, said Mastel

The city would also be better able to manage overtime and avoid call-out costs for overnight work and emergency repairs.

“HVAC doesn’t happen nine to five,” said committee member Brian Varga.

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