Item - 2020.AU6.2

During the review of the Order Paper on October 27, 2020, City Council adopted a procedural motion to remove this Item from the Audit Committee and bring it forward to City Council for consideration.

The Audit Committee recommends that:

1.  City Council request the City Manager to:

a.  coordinate with Heads of Divisions for those using GPS technology, including Transportation Services, to ensure that the contract with the City's GPS vendor meets the needs of the divisions and the City of Toronto; and

b.  forward the report (October 8, 2020) from the Auditor General to all other Heads of Divisions for those using GPS technology and centrally oversee that the City's divisions are fully utilizing GPS technology and letting go of inefficient manual processes.

2.  City Council request the City Manager to work together with the Heads of Divisions using GPS technology and the Chief Technology Officer to prepare plans with specific deliverables and timelines to modernize processes and integrate technology solutions with the GPS system.

3.  City Council request the City Manager, in consultation with the Auditor General, to report to the Audit Committee in the first quarter of 2021 with recommendations on policies and/or processes that would provide a system of review and audit of both in-house and contracted services within each City division and that improves accountability to approved service levels and delivers on outcomes that ensure optimal value for taxpayer dollars.

4.  City Council request the General Manager, Transportation Services, to fully utilize the GPS technology available, which includes real-time exception reports, notifications, and route completion and performance reports, to better monitor contractor performance.

5.  City Council request the General Manager, Transportation Services, to prepare a plan with specific deliverables and timelines to modernize processes and integrate technology solutions with its GPS system.

6.  City Council request the General Manager, Transportation Services, to ensure that staff use GPS information and reporting to monitor route completion, departure and return times, late starts, excessive stop times, and vehicle locations for operational as well as standby purposes and assess liquidated damages where applicable.

7.  City Council request the General Manager, Transportation Services, to ensure that winter maintenance vehicles are equipped with a GPS device on an immediate and urgent basis and to report the status to the November 19, 2020 Audit Committee meeting.

8.  City Council request the General Manager, Transportation Services, to review and reconcile the winter maintenance fleet to the inventory of GPS devices and to test the function, time accuracy, and status reporting mechanism of GPS devices for the 2020-2021 maintenance season and implement a weekly review and testing of the system on an ongoing basis.

9.  City Council request the General Manager, Transportation Services, to work with the GPS provider and, after every plowing event, to run reports on departure and return times, including stopping times to late starts, stopping times, departure and return times, and tracking, and to conduct reviews and reconciliations and to report on the success and outcome of this process to the Audit Committee by the third quarter of 2021.

10.  City Council request the General Manager, Transportation Services, to develop clear guidelines and allowances for acceptable stop times, break times, and the valid operational reasons for taking these stops and breaks.

11.  City Council request the General Manager, Transportation Services, to improve how it documents and tracks vehicle breakdowns and the deployment of spare vehicles.

12.  City Council request the General Manager, Transportation Services, to:

a.  ensure that all vehicles, including spares, are properly marked with vehicle identification numbers;

b.  conduct daily physical verification of contractor vehicles on standby, including spares, and document and compare the observations to contractor standby logs; and

c.  require the contractor to obtain prior approval from the contract administrator when a vehicle needs to go off-site for any reason and document the expected return date.

13.  City Council request the General Manager, Transportation Services, to:

a.  improve documentation of assigned routes (and kilometres) and completed routes by contractor as well as ensure that explanations are documented for when routes are not fully completed; and

b.  examine the cases where routes do not appear to be completed for potential valid operational reasons and evaluate whether related issues need to be addressed.

14.  City Council request the General Manager, Transportation Services, to clarify wording in future winter maintenance contracts concerning:

a.  the contractor's obligation to detect and report GPS device malfunctioning within a set timeframe;

b.  reasonable stop and break times;

c.  preventing vehicle swapping between routes and locations to ensure that GPS device information is accurate; and

d.  provisions for the assessment and enforcement of liquidated damages, including clarifying the expectation for when the work commences.

15.  City Council request the General Manager, Transportation Services, to reassess and document the rationale for liquidated damages amounts in the next contract cycle, taking into account past claims against the City and other potential losses, to ensure that the liquidated damages amounts are fair and supportable.

16.  City Council request the General Manager, Transportation Services, to coordinate with the City Manager to discuss and make improvements to the contract with the GPS vendor related to GPS repairs and turnaround time for devices.

17.  City Council request the General Manager, Transportation Services, to establish a formal process to:

a.  ensure that GPS devices are installed and functioning in all contractor vehicles, including spares;

b.  track all GPS devices and monitor them regularly to ensure that the devices are functioning properly;

c.  periodically reconcile GPS billings;

d.  monitor and ensure that GPS functionality issues are being reported to the GPS vendor and repaired on a timely basis; and

e.  monitor the calibration and functionality of salt spreaders. 

18.  City Council request the General Manager, Transportation Services, to:

a.  develop a policy and procedure manual for winter operations, including best practices for contract management and best practices for assessing and charging liquidated damages;

b.  standardize processes and forms for monitoring contractor performance and for assessing and charging liquidated damages; and

c.  ensure that staff verify and review contractors' operating and standby logs, using GPS data, for the accuracy of timing and services provided before approving payment.

19.  City Council request the General Manager, Transportation Services, to provide additional training to ensure that staff have an up-to-date and clear understanding of their roles and responsibilities as well as strong knowledge of winter maintenance contract management policies and procedures.

20.  City Council request the General Manager, Transportation Services, to consult with Legal Services in relation to the approach to take on the definition and charging of standby payments for the remainder (two years) of the current contract cycle.

21.  City Council request the General Manager, Transportation Services, to work together with Legal Services on a detailed review of the contract documents and Request for Quote for the next contract cycle and make the necessary improvements to ensure internal consistency, consistent use of terminology and defined terms, and simplification for implementation.

22.  City Council request the General Manager, Transportation Services, to ensure that the management and payment for services is consistent with the express terms of the contract for the next contract cycle.

23.  City Council request the General Manager, Transportation Services, to perform a cost-benefit analysis of in-house versus outsourced delivery of its winter road maintenance program to determine whether it would be beneficial or not to increase the level of in-house delivery.

24.  City Council request the General Manager, Transportation Services, to:

a.  develop meaningful Key Performance Indicators to measure the achievement of Council-approved service levels;

b.  develop performance metrics for the next contract cycle to measure and monitor contractor performance;

c.  improve processes and documentation to have relevant and readily-available information to measure the Key Performance Indicators; and

d.  publicly report on the Key Performance Indicators on at least an annual basis.

25.  City Council request the General Manager, Transportation Services, to work with the GPS vendor to configure the:

a.  route completion report to provide accurate information and develop other GPS reports for measuring contractor performance and service levels; and

b.  GPS system's geofencing feature to monitor contractors' adherence to their designated routes.

26.  City Council request the General Manager, Transportation Services, to analyze legal claims information and 311 service requests on a regular basis to provide additional indicators of where contractor performance needs closer monitoring.

27.  City Council request the General Manager, Transportation Services, to develop a reporting process regarding complaints received about winter maintenance and to develop a process to include complaints in contract management and contractor performance evaluations, with a special emphasis on recurring issues.

The Audit Committee:

1.  Requested the General Manager, Transportation Services, in consultation with the City Solicitor and the Auditor General, to report to the Audit Committee at its meeting on November 19, 2020 on the prospect of recovery of overpayments to the winter maintenance vendors for either performance issues or reconciliation gaps with GPS records, on the terms and conditions of the contract, and the prospect of recovery of overpayments in prior years with respect to standby pay and on the implementation of terms and conditions in the contracts on a go forward basis.

The Auditor General, the Assistant Auditor General, the General Manager, Transportation Services, and the Director, Operations and Maintenance, Transportation Services, gave a presentation on Audit of Winter Road Maintenance Program - Phase One: Leveraging Technology and Improving Design and Management of Contracts to Achieve Service Level Outcomes.

The Audit Committee recessed its public session to meet in closed session to consider this item, as it relates to the security of the property of the City or local board, litigation or potential litigation affecting the City or local board, and advice that is subject to solicitor-client privilege, including communications necessary for that purpose.

Keeping our roads and sidewalks salted and cleared of snow during winter months helps to ensure that the people travelling in the City of Toronto are safe and have a reliable transportation network.

The Auditor General's 2019 Audit Work Plan included a review of winter operations at Transportation Services Division. This report presents the results of Phase One of the operational review, which focused on whether the Division meets the council-approved service levels for winter road maintenance and whether it manages contracts, evaluates contractor performance, and holds contractors accountable as per the contract terms. The second phase will consider the operating efficiencies and the cost-benefits of contracting out versus in-house delivery of winter services.

We have made recommendations that will help the Division ensure a safe and reliable transportation network in the City of Toronto. These highlight that the City needs to:

1.  Fully leverage GPS technology and modernize its processes to efficiently and effectively manage the service levels, contractor performance, and accountability.

2.  Monitor, manage, and resolve contractor performance issues such as contractors starting their shifts late, claiming more hours than worked, taking excessive stop times, and operating without functioning GPS devices.

3.  Improve clarity and consistency in contract design for the next contract cycle, so that contracts are clearly understood by all parties and that Transportation Services manages to the express terms of the contract going forward.

4.  Develop Key Performance Indicators for winter operations and contractor performance, and measure outcomes to ensure contractors meet the required service levels.

Our audit provides 22 recommendations that will help the Division improve the efficiency and effectiveness of the winter road maintenance program, including resolving contract management and contractor performance issues, and measuring and meeting the Council-approved service levels.