[BLANK_AUDIO] [SOUND] Good morning. We're gonna call our house transportation preparation meeting they ordered this morning. It's good to see everyone this rainy day. Our sergeant at arms there David Latin, Joe Olsen and they Bill O'rally in the back and they have two pages with us today, we have Joe Cashman/g from [UNKNOWN] Kelly with Chris May, and Timothy [INAUDIBLE] I assume you guys are brothers. Well good to have you with us this morning. First speaker today, our first presentation is gonna be Walt Gray, chief deputy secretary of North Carolina Department of Transportation. Walt. [BLANK_AUDIO] >> Thank you Mr. Chairman, this morning we are going to go over the restructure plan for the North Carolina department of transportation. I am joined by Roger Rashell and Mike Holder who will also participate in this presentation. I'll begin by a quick recap of the session law that was passed last everyone knows this legislation directed the department to take a internal look at the operations and staffing levels of the department's of transportation and this law was provided the direction for the efforts that are outlined in the report. [COUGH] Many of the efforts to restructure and reduce staffing levels at the department of transportation originated a number of years ago when we encountered similar. >> [COUGH] >> that we had in the past, so instead of taking the Taken the same approach if they had the belt and finding positions here and there. We took a different approach this year and basically looked at it like how would you build a partner transportation today and what are the areas of focus hence appropriate staffing levels. So this hopefully gives us an opportunity to get in front of the annual request to evaluate staffing levels and organizational structure. Over watching goals of this report, were delivery of projects. Couple items in the session log that I'd love to point out directed the efforts of this report were an evaluation of current laws and policies and how those directed the efforts of the department and provide recommendations on how to align staffing with our strategic goals and how to ship decision making to the divisions to increase project delivery. And then finally, to provide recommendations Patients for performance and instead of based systems that would improve the efficiency of the division of highways. [BLANK_AUDIO] So again, coming to the department and taking a look at this project, we first started with an interview of nearly every business unit that was part of technical services and the division of highway. A couple of observations that the work group noticed, was that its projects moved along the life cycle of the project. There was a lack of ownership for the project, there was varying degrees of accountability and there's other state agencies also experienced we tended to operate in silos. So our primary focus was to build a better business. This was the first time this approach had taken that in North Carolina Department of Transportation. So a couple of key highlights to share with you. From this report, we made a primary focus to enhance authority for project decision making at the division level. What this essentially allows the division engineers to do would be inner and supplement agreements make change to orders, give them more authority at the local level to drop the efficiency and effectiveness of their projects. And then individualized accountability. This was another area that needed focus. So, by addressing this concern, it gives a clear line of sight of where the project is along the life cycle. So, any point while the project is being developed, the executive management of the agency can ask the division engineer where a project is and have specifics on ahead of schedule or behind schedule, a head of budget, behind budget so forth. So, it just provides clear accountability for each and every project. And then organization. This really speaks specifically to pro allocation of resources.
That the division engineers have the appropriate resources consulting firms, additional staff to meet these delivery goals. [COUGH] I grew up through this exercise, a number of improvements have been made to the way we would deliver projects. Again, a lot of staff that support project delivery was a primary focus will speak more specifically t this in a bit, but the first step that we would take is reallocating resources to the division. That's something that has not been done before, but now division engineers will have more authority to hire the resources that they need to meet these project delivery goals. And then speaking to the saloed approach that we've had in the recent past, we are gonna completely reorganize our central staff to operate in in multidisciplinary change. So instead of having group of engineers that focus on the same type of projects, sitting around the same table, working on different projects, we will abandon that approach [COUGH] and integrate the team approach, where a number of different engineers depending on the project size will operate together very similar to the way a private engineering firm operates. Another improvement that outlined in this report is the establishment of an executive committee that will oversee a new screen process, so when the step is first published, every project on the step will go through a screening process. At this point a number of decisions will be made that will influence how the project is funded, how it's gonna be delivered, will it be centrally managed, will it be managed at the division level, will it go through merger, will it go through non merger just a number of factors will be determined initially that will increase The project life cycle. And then also finally continuing to outsource a majority of our work in the planning and design work so continuing to use consultants. [BLANK_AUDIO] And the next page [COUGH] gives you an overview of the current staffing levels for the department. This report focuses primarily on planning and programming technical services and division of highways [COUGH] So this as the legislation called for we needed to come up with a 10% reduction in staff, so this chart gives you the appropriate headcount in those divisions as of April 1, so the denominator for our report is this 15, 17 number that you see on the right-hand column [BLANK_AUDIO] And then on the next The next page, this is an overview of the plan staffing levels once the report is finalized. You can see that there are significant reductions technical services and division of highways. >> [COUGH] >> And then also planning and programming at the bottom of the page. These reductions will be achieved by the transfers to the division and also reductions to central staff. The overall reduction for technical services and division of highways is 22% and then 16% for planning and programming. [BLANK_AUDIO] This next part of the report I'd like Roger Rochelle/g to come up and address this. [BLANK_AUDIO] >> Thank you and good morning. I'm gonna give a little bit more detail to a couple of the items that Mr. Gray brought up. One is the significant in process improvement. And the other is a dramatic change in the way that we are organized centrally. >> [COUGH] >> Specifically in the planning- >> [COUGH] >> And design arena. The first of the process improvement and Mr. Gray touched on this, the new screening process. The entire focus of the screening process is to come to a good conclusion as to which projects will be handled out of the division engineer's office. And which projects will be handled by central project delivery teams. A number of decisions will be made. And the key for the screening process is to make those decisions early, make them once and reduce the rework as we go through the project development and project delivery cycle. We have seen from other states when we reduced the federal funds or rather the Federal participation in the project development process. They have seen improvements in the project delivery rates. So we'll be exploring that. In the past, we have spread our Federal allegation across many projects
and been more flexible and developed all of our planning documents to those Federal guidelines. With a more focused Federal allocation to specific projects, we will go more towards a state funded delivery mechanism for planning documents should accelerate a number of projects. We'll also be looking at the procurement methods. Will this be a design built project? We'll establish that witness statement comes out, rather than doing a lot of work towards a design build that we'd have a change rate in the game to design bills. We reduce the amount of work that we need to pout into those those particular projects. We'll also be looking at merger versus non-merger and the point of this is that the executive level will get a sense of whether he project will go through that merger process or not, so we can make sure we're appropriately assigning projects through the merger process. In regards to the web dates, the board refers to a transition period, we recognize that if the project is being delivered by the division right now and a lot of work occurred, there's no need to ship it to central and vice versa. So we have to determined at January 1 2018 date at that consideration for it's gonna be left before that day, we will continue working as planned. If it's read after that, all those projects will be examined. We did do a preliminary screening. Not the robust screening that this process entails, but a preliminary screening and it would indicate that about 70% of the number of projects would actually be delivered through the division engineer's office and about 30%, these will be the more complex projects. Things that have a final assessments or environmental; impact statements, project slip they're like large designed builds. Those will be handled centrally. We expect that's more like 45 or 50% of the capital budget But only about 30% of the number of projects that will be handled centrally. We intend to complete the first round of formal screening in August 1st of this year and continue to do that screening every time new projects are added to this step. Brief slide here to talk about some of the rules of the screening process we very atuned to the need to have a division engineers deeply involved in this screening process, so what you see on the bottom is essentially our inputs and we have a lot of data that we gather for the prioritization process and a programming process to begin with. We're gonna take advantage of that data, pouring technical experts from groups like Broadway design bridge, design the planning department things of that nature. And then build all 14 divisions with tentative recommendations on whether the project will be delivered through the division office or centrally. Once we have the division as nears input and then will go to a project delivery committee which will be operative senior and level managers that are department that would form recommendations that we go to the executive level pensively Mike Holder or Walt Grey and myself. Each time that a division engineer or someone in central thinks that a project needs to switch from the division to central that cannot just happen. That would have to go all the way to the executive from approval level to occur. In addition we've recently implemented a process whereby the division engineers any time we have a schedule change whether it's a schedule change that affects the planning document delivery day or a construction contract letting day. Every time we do that the division engineer has to sign off on that delay we are advancement of the schedule. Before the executive level signs off on that change. Talk just briefly about a new matrix organisation that will be developed for the central business units. In quick construction we typically have as Mr. Grey mentioned solid approach. We have a levelly design unit, a hydraulic design unit, geo-technical pitch design for planning and environmental analysis, so forth and so on. Now we are co mingle all those individuals into collocated teams. So each team might have one or two road way engineers, they might have a planner, it have a bridge designer, it have an hydro expert, a utility designer all sitting in one area of our offices and they would be assigned a set of projects. The matrix organization comes in when you still have like a roadway design base unit. this base unit essentially will serve the function of state wide policies, procedure, guidelines making sure that all of our specs and standard drawings adhere to federal code and so forth. They will also handle specific state one programs and specialized expertise like inter change lighting design and other small functions like that.
So that unit will still exist, that unit may only be 30 or 40 people large, when we are all done as comparison many years ago that unit was over 200 people. The rest of the worldwide designers,he ones that are actually either designing or predominantly reviewing consultant work on the designs. They will go to these multidisciplinary teams. [BLANK_AUDIO] Before I turn it over to my [INAUDIBLE] with the presentation. This is just a snapshot of the technical services as it exists today as well as where it will be when we fully implement the plan over the next seven months. As you can see, overall technical services loses about 24% of their positions. 60 of these are vacancies that will be transferred to the division engineers so that they can choose their own planning engineers. Their own roadway designers, hydro designers etc. to form the team that they believe they need for the years upcoming in project delivery. In addition to those 60 transferred vacancies, technical services are also reducing staff by 49 filled positions. >> Thank you Sir. [BLANK_AUDIO] >> Alright. Good morning Mr. Chairman, members of the Appropriations Committee, thank you for the opportunity to present on this restructure plan this morning. I'm talk about how this impacts the Division of Highways staff particularly the divisions staff. First of all, we have to start with [BLANK_AUDIO] little review of the strategic goals of the Division of Highways and for For technical services and that was the [INAUDIBLE] for the preparations of this report and for the subsequent review of staffing levels and the size of the staff needed to accomplish these goals. Under project development and delivery [COUGH] we have matrix for planning document completion, for meeting contract lending and for accomplishing construction completion dates. Those are matrix that will be established as part of the report and Sub Secretary Grey will talk more about it in detail and honor implementation how we're gonna establish those matrix and how we go about meeting those particular matrix. We also established and it's [INAUDIBLE] to the report, the strategic goal of operations and maintenance laid miles resurfaced in accordance with the highway maintenance improvement program, bridge is replaced in accordance with the bridge maintenance improvement program, pavement preservation in accordance with the HMF adherence to baseline unit cost for several commodities And several unit activities that's the division highways ever takes, adherence to the DOT responsiveness legislation in our goals, and of course as always timely response to emergency storm events. Just briefly showing you a newly/g divisional organisation structure. What I've done with the consultation of division engineers we have done is organize he divisions and to teams that deal with like functional areas. Going from left to right you have the division engineer, who is over all maintenance and all operation activities. We call all things yellow report to this particular Individual. The division construction engineer is the project delivery whilst contract is left individual. They have supervised the district engineers and resident engineers procure right away and supervise the relocation of utilities and supervise utility agreement preparation, and then the new position which used to be the Used to be the division of operations engineers to the division of project development engineer. And under them they have the division planning engineer and environmental officer, project managers who will manage consultants that work with the divisions, division design construct engineer, and division bridge program manager. This part of the pyramid of the tri managed in the division is the project development part of the equation. They will supervise in the division all the activities for project development from [INAUDIBLE] >> station to development to completion of the project. When the product is finished and the motorists are on the roadway. [BLANK_AUDIO] This graph demonstrates the new project delivery structure that is outlined in the report, you'll note that the division engineers like Mr. Rashel said assuming ownership Role to determine project scope, budget and set schedules for projects. To the right is the division project development engineer,
they will assign project development responsibilities, and they have the responsibility to engage a combination of resource options to deliver the program that is assigned to the division. All [INAUDIBLE] consultants who were design activities the consultants can also perform turn key planning and designing functions, and manage projects with the divisions in consultations with our staff. They also have a capability to on board general engineering consultants that can perform a variety of work including revealing other consultants products. So for the first time the divisions will have access to general engineering consultants that can reveal other consultants work product and then same comments back through the division to the consultant who originated the work. With this goes accountability, project delivery progress will be briefed to an executive committee which Mr. Rachelle said, consisting myself, Mr. Rachelle and Secretary Grey and then to the secretary also on a monthly basis and then project delivery progress will also be briefed to the board of transportation on a quarterly basis. This is the plan staffing level for the divisional highways, we did a careful review of each business unit involved in project delivery and operations in maintenance support activities in the divisional highways. We consulted with each business manager, we consulted closely with this division engineer about the resources that they would need to be able to execute the program with a new paradigm that we're implementing. To that end as of right now we have total field positions of nine 929 in the divisional highways and we determine that we gonna reduce that number 186 positions which is about 22% reduction in staff in the divisional highways, and we are also transferring eight positions from bridge structures management to the divisions for posting that allow them to post for that resource, if they need it to deliver their needed to deliver their products to the divisions. I'll turn it back with secretary Grey part of the presentation. >> Thanks [BLANK_AUDIO] >> Thank you, you may be asking yourself how do you implement such a dramatic change and re-organization. And the answer is really simple. It's a phased approach with a number of different steps along the way. Many of these efforts have already began And in this chart, we outlined a few of the significant milestones that this report emphasizes. So I will not go line by line, but I would like to draw your attention to a few of the key changes outlined in this report. About halfway down where the yellow work in progress [INAUDIBLE] speaks specifically to the screening process for project recently added to the step. I believe Mr Ratche/g referenced that going back and taking a look at the previous published step and used January 1 2018 as the cut off date for those that are scheduled to be delivered. Before that day we were not having changes, but those after will go through this new screening process. We will have this screening done by August of 2016. [BLANK_AUDIO] And on the next page, second one from the top. Identify current and future vacancies available to transfer to the division. As mentioned previously in the report a number of the reduction, two central staff will come through transfers to the division level. This gives more authority to the division engineer to hire and provide adequate resources to the delivery goals at the delivery level. About 30% of the vacancies have already been identified and we will continue that effort until we reach the 68 number. And following that we will begin the procurement of the general engineering consultants for the division. This is a process that typically takes between four and six months. So we'll begin to draft that procurement and advertise for it and begin the interviews. And by the end of the year have general engineering consultant firms on board for each issue of the divisions. And finally on this page, developing work with our HR's department to execute a series of reduction through reorganization plans.
This method as you all have been very familiar is a voluntary method according to its design to help with talent retention and also employee morale given that this is a voluntary program that will require much coordination and work with other divisions within the agency. [BLANK_AUDIO] [COUGH] And then finally one thing I'd like to bring your attention to is the same analysis will be applied to other business units within the division. The primary focus of this report was divisional highways, technical services and planning and programming what we think that we should continue to separate to take a look at support functioning of other internal operations and other modes of transportation. And we will begin that and we will complete that effort, January of 2017. [BLANK_AUDIO] [COUGH] So another step that will be needed to complete this effort is to develop better tracking performance. We need to determine that we are tracking using the right matrix for project delivery and if changes need to be made then we will revise the way that we track the performance and project delivery. [COUGH] This speaks to the transparency and accountability for project delivery. We need to be able to show year over year improvements in the project delivery area. So these three bullet points will speak specifically to that, ideally we will use best practices implemented in other states. We will revise the methods and the recording methods for tracking Tracking progress and recording delivery rates and then establish preliminary targets by July 1 of 16. [BLANK_AUDIO] Next in the legislation was that we've come up with incentive based recommendations, again these are our recommendations that we as a department think would help with project delivery. [COUGH] Safety is always our number one goal sort of our north star when we go through the project delivery of a project so a safety bonus to encourage safe practices in the workplace. [BLANK_AUDIO] Bonus delivery goal, a bonus delivery structure for a team based approach [COUGH] a bonus structure for early completion of projects, incentives that encourage maintenance teams to exceed DOT reporting guidelines and then incentives that encourage and then also incentives that encourage maintenance teams to exceed performance targets for planned maintenance activities, this is like a long line pavement markings. These incentives are all designed to help build a better business. Then finally the last page is the chart that just shows the next steps and how we will achieve the outlined [INAUDIBLE] Over the next 90 days we will begin the first round of transfers and vacant positions to the division, this will be done on a rolling basis. The divisions will advertise and fill the positions we will begin our advertisement for general engineering consultancy firms, and then we will issue the first round of RTR plans. Following that, we will transfer the second round of positions to the division. We'll advertise and fill those positions, issue a Subsequent round of RTR plans, we'll negotiate an award to general engineering consultancy contract, and then complete the RTRs. Ideally, we would like to achieve the outlined reductions through the RTRs and the transfers of vacant positions. However, if there's still work to be done that we would implement, develop and implement a lip plan in January of 2017 and the finally, evaluate the status of the vacant positions as a result of RTR process. And that concludes our presentation. >> Thank you. Any questions from the committee? >> Mr. Chairman I apologize I made a mistake but in your first presenation you gave the percentages and the sticker after you gave the actual numbers of division of the highway. Did I miss the numbers for planning and programming? I just couldn't see them up on the board. That's why people changed numbers. >> Representative Hall.
We do not have the actual chart that outlines that number can be provided. It was just a percentage reduction. >> You know the question following it? >> Chairman, Tanner. >> Thank you Mr. Chair. Mr. Gregory, thank you for your presentation and for the benefit of the committee, we met last week and went over some of this and one of the things that I was very pleased to see, was I sort of interpret this as the first low hanging fruit of the process that we're going through the entire DOT. It's about one ninths of our overall personnel that we have inside of DOT. And we also talked about the environmental review process and that was really where we're They were having a neck in the process, moving that we're bringing some IT assistance for that, to help make that move faster. Breaking down [INAUDIBLE]which is great but you know the environment there. But we know we're not where we need to be yet but what impressed me and what I was very glad to see is you all get it. We're struggling right now to bring the appropriation spaced funding for employees so we know exactly where everyone is, what they're doing and where the revenue comes from to support them. But we know how important that is in order to then compare that to our goals, where we wanna be and then right sizing DOT strategically to meet that. And so I wanna say for the benefit of those that weren't there, you all get it [LAUGH] which is great. We're making some first steps and I look forward to seeing And what comes after this. Thank you. >> Any other questions or comments? Chairman. >> Mr. Gray. On the [INAUDIBLE] general engineering consultants for the divisions, a little more information there's gonna be firms outside DOT obviously apparently. That we will review DOT plans and each others plans. Is that what I'm understanding? >> Yes sir. That's correct. >> Follow up. Will they be able to work for multiple division, say if I had a son-in-law for example that want to be a general engineer outside of DOT. It's pretty important right now by the way. For example, would he be able to work for multiple divisions or just one division. >> Any other questions or follow ups? if not that concludes our meeting for today and we will have another meeting, announced. >> [INAUDIBLE] I am sorry [INAUDIBLE] >> Thank you Mr.Chairman. >> [CROSSTALK] >> Well after you see these reports you'll probably wish I was rushed out here. >> [LAUGH] >> Cuz for full disclosure of the committee I am not an accountant and we had this conversation, Representative Tine, Representative Howard/g the other day like Representative Tine referenced in. We're trying very hard to establish our accounting principles and our SAP accounting system to the point where we can track employees, track costs to the activity that they're working on and determine where Where they are, what they're doing, and how much time they're spending doing it. To that end I just wanna cover the DOT report program oversight which the intent was to increase budget transparency, and allow for greater legislative and citizen oversight. The main gist/g to this was to reclassify the funding source for all full time positions that are budgeted as receipts. Supported on the basis of charging the projects to appropriations and adjust budget funds accordingly by May 1st, 2016. I should note that the department worked with the Chair and members of the House or the House and senate committees to get an extension of the implementation of this particular part of the legislation until July 1st. Our chief financial officer did send a report over last Friday that details the various options that we have looked at and it proposes that option five which is Which is somewhat of a hybrid of the other four options and allows us to on an interim basis work through some IT issues that are our barrier right now. To be able to merge hours of work to the employee that worked them and I'll detail a little more of that in just a second.
Just a brief timeline for our efforts. In February of this past year we presented for evaluation to physical research staff, options 1,2,3 and 4. And it was determined that these particular options did not meet the intel of the legislation. Relative to transparency and being able to link employees to the particular activity cost allocation basis. In March, we reviewed the options with the research staff, gave examples, provided mark out reports for the options one through four, and established standard label cost history by funding source. But it was determined as stated earlier that one through four were not viable options. They did not meet the intent of a legislation and standard labor costs activity as supplemented budget detail and other VAT report efforts. So we had to look to see if there's another way that we can cost our work and be able to length the employee with hours worked, and the cost to the activities that they work on on a daily basis. So moving forward to April, there's a quest of reporting to all programs in DOT and functional areas including the hours charged and associated employee count [INAUDIBLE] highways and then the other mode divisions of the department. And like I said the CFO delivered a modified report to the chairs on April 27th and this report is currently under review. We do have our taken strengths to pull an open invitation about May 1st. We are attempting to work through those as we speak DOT will continue to work with [INAUDIBLE] division and also state budget management to review all of our options and determine the best way to meet the attempt of legislation. It's the department's objective to appropriately cost our employees to the work activities that they do on a daily basis. So we get a true accounting of what that work is costing us and it's the how they are doing it, where they are doing it, who's doing it, and how much is costing us to do it. This is a south pole report of the option five, it gives the detailed review, or detailed presentation of the standard labor. This is in division two, highway division two our activity in function A Worked, number of hours worked and the funding source. The problem with this particular option is that an employee works on a federal A job and a state project. They may charge eight hours to the state project, but they split their hours it charges eight hours also to the federal project. So it's double counting the hours worked, which is an issue relative to the accuracy of cost information. And and SAP we have two models that govern our footing of our financial cost. The project systems module. [BLANK_AUDIO] Provides us with the employee ID which dependently identifies employees doing the work, and it shows hours work by function code. And then there's a funding ledger SAP module that pushes the charges down to the funding source to the proliferation source, the challenge that we have from an IT basis is that both of these systems don't communicate right now, you can't bring one set of data into and populated into the other set of data so it's manual having to pull this out, they put it on a spreadsheet or some other recording to elect what's demonstrated on our point side right here. So we're committed to working through that effort and our chief information officer and I have been discussing this along with our chief financial officer and we're gonna work with resource outside of the department to establish if there is a solution in SAP that we can easily change the programming to allows those modules to communicate. Or if there is another method or way that we can more accurately and effectively capture capture the hours that our employees work versus a budget that is drawn from to apply that calls to the work activity. In order for us to establish exactly what that work activity costs. And when when it was done and how it's done. >> Chairman Ford do you have a question?
[INAUDIBLE] >> Yes sir. [INAUDIBLE] [INAUDIBLE] >> [LAUGH] >> Are there any other question from the committee? [INAUDIBLE] >> Thank you Mr. Chair. We had that discussion in a The other day in our meeting in regards to that because that was sort of, and the problem is if we and correct me if I'm wrong. But the human resources portion is different than the project management system and so we have to pay on one side and then we have the billing/g on the other side. And one is the state HR system and the other is the DOT which is used in several other states for project management. And then we can get top line but we can't get the drill done in our active data. So we talked about working with the innovation center which you know the department of IT has now that they work with government entities. And then also I asked them was there another item that they are tracking already, that would give us the same usefulness without having to go through this whole process and then looking in that to have to get what the data point That you have mentioned that you might look at. >> We can strip down the employee with a new standard liberate or a elaborate/g minus forensics to ascertain the actual cost of that employee doing at work is and that allows us to more act really compared against the cost of contracting that work out but Chairman Tine said we are gonna engage the innovation center and the other resources to see if their products that are out there, Chairman told it like you mentioned and also to the other guiding principle with this is that we need to make it, we gonna have to formulate it where its not garbage in garbage out, that it is user friendly, that our employees in the field or at our station work with the supervisors record their labor in a straight forward. Iterative logical way, so that can capture the cost at the source. >> [INAUDIBLE] >> And the point of this was part of our discussions as well. The point is to know where people are and build and identify perhaps where somebody is too strung out with many different projects And maybe it is additional resources needed, or perhaps they are not being utilized to their full capacity. So we're sort of [INAUDIBLE] but the end result is we wanna know where everybody is, what they're doing, so that we can then have a more strategic way of Dealing with how we structure project and how we structure the personnel and [UNKNOWN] So, I've said that if there is a better way to capture the information without having to go through [UNKNOWN] whatever's useful, we're happy to have on the way there. >>[COUGH] [INAUDIBLE] I'll move in. >> Chairman. Both floors. >> Yes [INAUDIBLE] Somewhat certain that we don't spend thousands of the state [INAUDIBLE] where solution matched on 18 to 24 of the month With numerous number of change or is that gathered in that in hundreds of thousands of dollars. [INAUDIBLE] and then I can go entire of day to every person after the Initial plugging in and then simply modify that half [INAUDIBLE] and I wanna play [UNKNOWN] >> Mr. Chairman. >> Great observation And a point where we said that if there were all products out there then we will definitely avail ourselves to them and I expressed the chairman's [INAUDIBLE] the other day was talking that I want us to do this in a very cost effective way that That delivers the product in a transparency that you guys need to be able to trust
the report I work activities in the associated costs for them and a very straight forward and iterate and simplistic for lack of a better word where you can, where there is total transparency between those data points and the data point of those Represent a time reference that we talked about that other day was a paradigm that our consultant friends use is utilization rate and when they have employees that are working on projects whether maybe design or planning or whatever the activity, that employee build There work activity to that specific project and then their productivity is measured by the utilization rate and the bill-ability, if that's a word, on those particular work activities. So that might be another way to skin the cat that we are looking at the iii to meet this requirement Any further questions or follow ups? >> There's [INAUDIBLE] a couple. I'm not worried about the software I'm sure you'll figure that out. To me you still have to, there's still subjectivity [INAUDIBLE]. You have to allocate value to each Position and what percentage that contributes to the whole project and that's the impossible part, actually I don't know how you can possibly do that represented time mentioned the goal was to see where you move workers around is the goal to see where you need more or less workers. Um great question representative Hull. The goal is to, part of the baseline get cost which is our 10 most critical maintenance activities where we spend 80 to 85% of our maintenance dollars on, those are the ones that we're tracking for unit cost, data which In labour cost be a component of that so that the more refined and closer more accurately we give those costs with those particular items, the division is near as dead will be informed more accurately on how much it's costing them to do those activities we can be transparent about it, we can report it in a more accurate manner but Part of the bottomline equation is yes um does the division have the proper number of staff to execute their mission and from a cost perspective relative to the budget allocation they get, how much of that is labour and how much you get gets to a point where there's a tipping point where you have an amount of labor that doesn't allow you to do activities. So you've gotta find that balance point where your activities you can execute those with a proper and strategic amount of labor. And just as an aside there is a discussion in the for/g report of the re-structure report that details a labor analysis tool that we've utilized to estimate the number of transportation worker and transportation supervisor positions laid in each division to accomplish the base line unit costing and other maintenance activities that are in plan. Then also there is an analysis in their relative to our contract administration workforce that we need to be able to accomplish the administration oversight over the construction projects. >> Follow up. >> Follow up please From what's here it's that it seems like obviously one of the goals [INAUDIBLE] . Do you want to go with data that determine what might be cheaper in the state contract. We already do a lot of that. I'm assuming someone else has been done. A lot of people talk about general engineering consultants which then there is a lot of the Then in the analyses of how much that saved North Carolina versus having the staff people do that. >> Let me slip my answer/g right there, we have not done an exhaustive Like we have on the maintenance and construction [UNKNOWN] outside. Yes sir. >> No exhaustive analyses. Are we certain that the statement is plain? >> Representative Hall, from my approximation you have to compare what the cost Of doing that or contracting that activity, which is a short term basis in some situations or in a lot of situations, and using that resource versus the cost to the state of having an employee there for 30 years. So you would have to amatuerize/g the employee versus what the project cost is for a bushel of the projects that the divisions were gonna
have. >> Follow up. >> That doesn't seem that it will do. Like Mr. Tolbert said, there's got to be software for that. That the goal is to save the state money, I mean I hope we can look at whether it's actually saving us money or not to do outside consultants. >> [INAUDIBLE] >> Thank you, Mr. Chair. And you're point's well taken, and that's what DOT reports is all about. It's about claiming the maximum amount of efficiency for turning people's dollars into roads, bridges, ferries, airports all the ports, the whole thing and [LAUGH] and like that thing here Representative Timm mentioned that. So that's the [LAUGH] goal of the process, and so how we do that is we first have to identify where we are today. Because the way that we budget things from our stand point and what we see, it's very hard to see exactly where everybody is and what they are doing and what they are responsible for. So we wanted to make sure we understood where we are today. And then when we set the goals of you know we need it's gonna cost tax dollars to repay even this division we think the maximum efficiency is less these our results and then the restructuring is how do we approximate that. Whether it is outsourcing or internal what have you cuz unfortunately what we've done to this point is we've legislated the outsource so it hasn't been internal discussion on whether or not it's going to meet the goals of being more efficient. We decided from our stand point that it's going to be more efficient. Sometimes outsourcing is the best. Sometimes it's the best to keep it inside. And we needed to have an accurate understanding of where we were and where we were trying to get to in order to set up the the right structure to be efficient as possible. >> Representative Hall. >> I have a quick comment. I just want to agree with Representative Timeck. Great plans. I'm surprised that your able to request that 10% reduction where we don't know where we are right now and we don't know the efficiency or exactly what we need yet. Be more [INAUDIBLE] >> Yes sir, someone. And so in order to make sure the DOT understands what they're trying to accomplish. Actually 10% efficiency increase on a restructuring plan where we haven't had a real in decades would actually be a fairly soft goal to try and hit. And that's where with discussions with DOT who was at the table the whole time as we wrote the DOT reports. >> But we did have some understanding that they weren't there. >> We have some understanding, of course. We might like for Representative Tine and Representative Hall to continue this dialogue over lunch or something. But anyway, Representative [INAUDIBLE] >> The [INAUDIBLE] >> All the points being made well taken I'm sure. But in all due respect we also wanna be sure the outside engineers they're not needed producing a better product. Different set of eyes. So if you wanna quantify that, probably not. But these special opinions, we're getting a better product or [INAUDIBLE] on time. It's great being on time, but not if you screw it up. So again hope there's consideration of the better product. >> [COUGH] Thank you Chairman Olive for that observation. And we're committed to using consultants and this we're going to Representative Hall too. On a just-in-time basis. >> If we have adequate fore-structure on the DOT side, then we will first utilize DOT employees to produce the work. If we need consultants to supplement our resources, or we have a special need for a resource center division with their project mix that they don't have and then it will be costly to on-board somebody, train them, develop them to the point where they could be as experienced or provide a product like a consultant could. And then from a time time is money of course and then from a time basis to a training basis there will be a lot of cost involved where we could go power consult engineer that has those experienced employees and just in time the project that maybe with us for six months or eight months to develop those plans or to do their analysis then they're gone and we don't pay that cost anymore. >> [COUGH]
>> Representative Ford you don't have anything to conclude anything? >> It will take a while so no. >> [LAUGH] >> Any comments or questions? Chairman Toure. >> [COUGH] >> Thank you Representative Paul for trying me ind today and say that oftentimes that being from an attorney is a different aspect of operating a business than actually being from a business that hires a huge amount o employees as throughput and output and I think that we've been talking about this for several years now And what we noticed is that there was a level of unequal between divisions and we couldn't quite get our fingers on why it cost one division x to do one thing that it cost the other division y was doing. So with all this being collapsed in this report, I think you'll be very pleased cuz it will actually give you exactly that data to be as close as we can possibly get to some of the questions that you asked. At this point we didn't have that. So I thoroughly look forward to it, and I'm sure it will be edited and quantified as we go on. And perhaps as we go on a year from now, when maybe some of us are sitting round here and maybe some of us aren't that I might come back and given us a much better portrayal of what DOT is doing down to the actual man hours. >> Thank you, Chair. >> Before like an ISO of transportation, you don't know whether you're conforming or non-conforming. >> Any other questions or comment from the committee? If we don't have any further presentations [INAUDIBLE] we'll adjourn and the next meeting will be decided and announced thank you for being here today. NOISE] [BLANK_AUDIO]