Dedication to innovative leadership, to teamwork and to its customers, coupled with the implementation of cost-efficient IT, propel the Auburn Hills Department of Public Services into the upper echelon of public service departments both in Michigan and nationwide, Ric Larson discovers.
Nestled on a hill among pine, maple and oak trees about 35 miles north of Detroit and a short distance from the Interstate 75 corridor is the Walter G. Smith Public Services Facility, the headquarters for the Department of Public Services for the City of Auburn Hills, Michigan.
Formerly known as Pontiac Township, Auburn Hills was formed as a city in 1983. It is located in Oakland County—one of the wealthiest counties in the country—and has approximately 21,000 residents and an average median household income of $51,376, according to the 2008 Census. It is home to the Detroit Pistons franchise of the National Basketball Association, which plays at The Palace of Auburn Hills (considered by many as the top sports and entertainment venue in the US), as well as to the Chrysler Headquarters, Oakland University, BorgWarner, and Michigan’s destination shopping mall, Great Lakes Crossing Outlets.
Ronald J. Melchert is the director of the Department of Public Services (DPS), a position appointed by the Auburn Hills city manager. Melchert, who has had the title since 2007, is not what anyone would consider to be desultory in his approach to running the DPS or in his constant quest to cut costs, improve efficiency and save the taxpayers and the city money on the services his department provides.
The DPS’s main function is the operation and maintenance of the city’s physical infrastructure, which includes 24 buildings and facilities, 193 acres of parks and grounds, 71 miles of major and local roads, 180 miles of water main and 118 miles of sanitary sewer main, 2,580 storm drains, and street lighting, as well as providing support for all business, residential, social and recreational activity within the community.
Melchert oversees 43employees and a fleet of 120 vehicles, with a budget of approximately $24 million and annual total city revenues exceeding $54 million. His team has shaved almost 15 percent off the budget, in part by taking advantage of TIFA (Tax Increment Financing Authority) Funds, created in 1980 by the State of Michigan to help eligible cities stop the decline of property values in specific areas. The projects in a TIFA development plan must be public facilities and include streets, plazas and pedestrian malls as well as improvements to furniture, beautification, parks, parking facilities, schools, libraries and other public institutions. Bridges, lakes, canals, utility lines, pipelines and other similar facilities are also eligible.
The economic crisis that has befallen Michigan (and the nation) has affected the department in terms of revenue from water billings. “It’s been on the decline,” says Melchert. “Total revenue projected for 2010 will be a little more than $5 million, and we’re looking at a projected drop for 2011 to about $4.9 million. This is due to new development and water consumption tapering off—temporarily, based on some of the new activity we’ve seen in recent months. We collect capital fees for both water and sewer connections to the system, which helps us to maintain that infrastructure for future capital improvements. When development drops off, we lose a big chunk of that revenue. We’re relying quite heavily on just our water and sewer rates at this point for revenue.
“We project more water revenue in 2012 due to water rate increases,” Melchert continues, “which will keep our fund solvent, as well as keeping up with the City of Detroit rates, where we purchase our water. We’re hopeful that stimulus grants from the American Recovery and Reinvestment Act and raising the rates appropriately will keep our head above.”
Under the watch of Melchert and his team, DPS has made significant investments in information technology to improve the department’s ability to provide better service to its residents and also save money. One particular investment is the water meter reading system. “We used to have three employees that would physically read ten days out of each month—30 days of reading,” says Melchert. The department replaced that outdated system with radio frequency reading—better known as drive-by reading or automatic meter reading (AMR)—in which a reading device is installed in a vehicle; the meter reader drives the vehicle while the reading device automatically collects the meter readings. The DPS was then able to use one employee to compile the readings for the entire city in only a day and a half to two days, which freed up the other two employees to focus on preventive maintenance.
Dave Harran, manager of public utilities for Auburn Hills DPS, is improving upon this system. “Dave is implementing a radio frequency system that builds upon the system we already have,” says Melchert. “It will be a fixed network reading [a permanently installed network to capture readings via laptops] that takes the reader out of the field to focus on meter maintenance, making sure that the old meters are replaced in a timely fashion and insuring optimal revenue from those meters, which in turn will provide the customer with accurate billings. They deserve that, and we deserve to receive the revenue we should be getting for the services we provide.” When the system is fully implemented, the cost savings should top $50,000 annually due to the reduced labor associated with meter reading and responding to consumer concerns.
Melchert stresses the importance of teamwork in his department and is quick to point out the role that others play in getting the job done. “I have the daily support of my colleagues, including a facilities and roads manager, fleet manager, public utilities manager, deputy director and crew leaders in each division,” he explains. “We focus on a vision that becomes the authority that drives us. We’re not an autocratic type of management system; we’re very open to new ideas, and we expect people to lead and manage at all levels. Our DPS employees are the experts in the field. When they come across a problem, we look to them to come up with a solution to solve it and incorporate it into their workday. When everybody has the same vision in the organization, any decisions they make, as long as they have that goal in mind, will minimize mistakes. This approach has saved the city millions of dollars over the last two years,” he says.
Melchert’s philosophy stems in part from the fact that the City of Auburn Hills, including the DPS, is being trained in the “high-performance organization” model, a leadership development curriculum for current and aspiring government leaders.
What’s next for the Auburn Hills DPS? “We’re currently installing a computerized HVAC energy management system to help us with climate control in public facilities, packaged with energy-efficient lighting. We expect to save $17,300 annually in energy costs. Also, we’re researching the feasibility of incorporating alternative fuel vehicles into the city fleet, which is consistent with the city’s green initiatives,” concludes Melchert.
