Council Improves Effectiveness Of Property Maintenance Supply

The Council’s Property and Projects Committee will tomorrow consider a proposal which, if adopted by the committee and then the full Council on 28 March, would achieve significant efficiencies and savings relating to the maintenance of the Council’s housing and commercial properties.

A review undertaken by the Council “s Property Unit, has made a set of recommendations, which if adopted would have the following implications:

1. The number of specialist property maintenance services providers (such as fire service, doors, lifts) would decrease from up to 40, to 4 suppliers.

2. The number of contractors who supply the Council’s housing and commercial property portfolios with general property maintenance services would decrease significantly, from over 100 to essentially one. That contractor would provide a service to the Council based on the Facilities Maintenance Management (FMM) model.

3. Overall, more efficient property maintenance services provided to the Council, which would translate to significant cost savings and improved levels of service.

Relating to Number 1 above, the specialist contracts are currently undergoing a tendering process, and contractors are expected to be in place by the end of April.

Facilities Maintenance Management (FMM)

Central to the review, and relating to Number 2 above, is the proposed introduction of the Facilities Maintenance Management (FMM) model to manage all non-specialist services for the general maintenance of Council-owned housing and commercial properties. Non-specialist services include landscaping, gardening, painting, electrical, plumbing, builder work etc

The Council’s Property Asset Manager Peter Wills said that the main objective of FMM is to optimise the supply chain of services to the City Council, and thus achieve efficiencies and cost savings.

“FMM is about developing corporate capability, in this case within the Council and the organisation providing FMM. It is sensible, and best practice, for the Council to minimise the overhead and administration costs of maintaining over 100 suppliers.

One of the key outcomes of FMM is more proactive property management. Where under the current system, much work is completed in response to identified problems (reactive), FMM encourages a more proactive maintenance regime which saves costs such as after hours callouts.

FMM has been adopted by Auckland and Wellington City Councils, achieving cost savings of 15 to 40%. In Christchurch, the Council could expect to save $100,000 to $200,000 per year within 2-3 years of implementation of the FMM model and the rationalisation of the supply chain for maintenance services.

Currently, there are very few Christchurch-based FMM providers operating in Christchurch. The City Council is working with City Care, a current key contractor to the Council. City Care has undertaken to develop the capability within their organisation to provide the FMM service to the Council for the next five years.

It is proposed that the City Council work with City Care as the FMM provider for several reasons:

- The Council already has a contract with City Care to retain their services for the next four years under the obligations of the Sale and Purchase Agreement. Introducing FMM would therefore extend their current contract by one year only (it would also widen the range of services provided and therefore the value of the contract).

- City Care are 100% Christchurch owned and operated. Other FMM providers are available in New Zealand, but are owned and based in other centres. The Council has a policy to purchase products and services from Christchurch owned and operated businesses wherever possible.

- City Care would develop and grow as a FMM provider in its own right, which could then seek other FMM contracts within and outside of Christchurch. As City Care is owned by Christchurch ratepayers (as a commercial enterprise of the Council), its future success would ultimately be reflected in income (dividends) to the Council.

Mr Wills said that at some point in future years the contract could be open for public tender, and City Care would then have to compete to retain the Council’s FMM contract.

The proposed adoption of the FMM model by the Council and an FMM provider would mean a re-allocation of much of the contract work currently undertaken for the City Council directly by over one hundred providers.

Mr Wills said that in certain cases it is likely that the same provider could be sub-contracted by City Care to provide a similar service to what it is currently offering directly to the Council.

Current providers of general property maintenance services to the Council’s housing and commercial property portfolios have been mailed a letter advising of the proposed changes.

If the full Council makes a decision on 28 March to go ahead with entering into a FMM contract with City Care, current contractors would immediately receive a letter from the Council’s Property Unit advising them of the decision.

Release ends

For further information:

Rob Dally, Christchurch City Council Property Manager, ph: 371 1500.

Peter Wills, Christchurch City Council Property Asset Manager, ph: 371 1503.

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