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95-136Council File # 95-136 Green Sheet # 28048 RESOLUTION �INT PAUL, MINNESOTA Presented By Referred To Committee: Date 1 WHEREAS, the Saint Paul City Council is in receipt of the Renort and Recommendations of 2 the Saint Paul�Ramsey Cn�anty Print Sho�Task Force; and 3 WHEREAS, the Saint Paul CYty Council commends City and County staff for their work; and 4 WHEREAS, it is the desire of the Saint Paul City Council to keep in accord with their 1945 5 goal to work in collaboration with other units of government for a greater work product and efficiency 6 in government; 7 NOW, 'THEREFORE, BE TT RESOLVED that the Saint Paul Ciry Council endorses the 8 continued work with Ramsey County towards consolidation of print shop efforts in early 1995 into the 9 City structure; and 10 BE TT PURTHEz< RFSOLVED that the Saint Paul City Council requests as part of the final 11 draft that efforts be enumerated to ensure employee rights are protected; and 12 BE TT FINALLY RESOLVED that the Saint Paul City Council requests that the final draft 13 also provide budget and ge:sonnel details for both governmental entities for review and approval. Requested by Depar:ment of: Fin Ma nen Se vi G By: e �� ` Form Approved by �.ty Atto ney Certified b3 ctouncil Secretary g Hy: Approved By: Approved by Mayor P.or Submission to Council By: { r Adopted by Council: D..te �' eK .`� ,�� , C.F. 95-136 DEPARTMENT/OGFICE/CAUNCiI DATE INRIATED N� ��7 O�� c�c coun��a.. z�s�9s GREEN SHEE INRIHUDATE INRIAL/DATE CONTACT PERSON & PHONE � DEPARTMENT DIRECTOfl � CITY COUNCIL Councilmember Janice Rettman "�'�" �arvnrroaNev �cmc�eRK MUST BE ON COUNQL AGENDA BV (DATE) qOUTING � BUDGET DIRECTOR � FIN. & MGi. SEflVICES OIR. OflDER � MpYOR (OR ASSISTAN� O TOTAL # OF SICaNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE) ACTION qEQUESTED: . Acknowledging receipt of the "Report and Recommendations of the Saint Paul/Ramsey County Print Shop Task Force" and endorsing the continued work with,Ramsey County towards consoli- dation of rint sho efforts in earl 1995 into the Cit structure. RECAMMENDATIONS: Approve (A) or Rejact (R) pERSONAL SERVICE CONTRACTS MUST ANSWER TNE FOLLOWING QUESTIONS: _ PLANNING COMMISSION _ qVIL SERVICE CAMMISSION �� Hd5 this pefSOnHifin eYef wOrked uader a CAQtcaCt fof UtiS d0partment? — CIB COMMITfEE _ YES NO _ STAFF 2. Has this person/firm ever been a city employee? — YES NO _ oiS7RIC7 CoUR7 — 3. Does ihis person/firm possess a skill not normally pouessed by any curtent city employee? SUPPORTS WHICH COUNCIL OBJECTIVE? YES NO Explain all yes answers on seperate sheet anA attach to green sheet INITIATING PROBLEM, ISSUE. OPPORTUNITV (Wlw, Wha6 When, Where. Why): ADVANTAGESIFAPPROVED� DISADVANTAGES IF APPROVED. a �! $�f FE6 � � �99� DISADVANTAGES IF NOTAPPROVEO: TOTAL AMOUNTOF TRANSACTION $ COS7/flEVENUE BUDGETED (CIRCLE ONE) YES NO FUNDIfdG SOURCE ACTIVITY NUMBER FINANCIAL INFORMATION: (E%PLAIN) �� „ ., o err o R' y �4 y �� i ., o , ^ JANICE RETTMAN Councapetson /� 1 CITY Ob' SAINT PAUL OFFICE OF THE CITY COUNCIL a Members: (� Janice Rettman, Chair QJL.- Dino Guerin (j Michael Harris Roberta Megard FINANCE & BUDGE7 COMMITTEE REPORT WEDNESDAY, FEBRUARY 1, 1995 Report and Recommendations of the Saint Paui\Ramsey County Print Shop Task Force. FINANCE & BUDGET COMMITTEE FORWARDS THE REPORT AND RECOMMENDATIONS OF THE SAINT PAUL\RAMSEY COUN7Y PRINT SHOP 7ASK FORCE TO THE FULL CITY COUNCIL MEETING ON FEBRUARY 8, i995. RESOLUTION WILL BE PREPARED AND DISTRIBUTED PRIOR TO FEBRUARY 87H. 2. Resolution - 94-532 - Instructing the Police Department, the Public Works Department, and the Division of Parks and Recreation to discontinue billing neighborhood organizations for services provided to assist them in conducting neighborhood festivals that are consistent witfi the mission of their department. (Referred to Finance & Budget Committee on April 27, 1994) FINANCE & BUDGET COMMITTEE RECOMMENDS APPROVAL 3. Ordinance - 94-706 - Amending Chapter 366 of the Legisiative Code by adding language authori2ing the Police Chief to assess a fee to cover the cost of providing security for a block party, community festival, speciai event, march, demonstration, or public gathering. (Referred to Finance & Budget Committee on at Third Reading on June 1, 1994) FINANCE & BUDGET CQMMITTEE RECOMMENDS APPROVAL 4. Ordinance - 94-774 - An ordinance relating to the coliecting of registered bills by the City of Saint Paul. (Referred to Finance & Budget Committee on at Third Reading on June i, 1994) FItVANCE & BUDGET COMMtTTEE RECOMMENDS APP�OVAL � r� Nancy Antlerson 1 >- j-'S�= Rssistant Secretary to the CounciL CITY HALL SUITE 320A SAINT PAUL, MINNESOTA 55102 612/266-8650 6a a�46 Pein[ed on Aecycied Papet I � ' ` I I� � Report and Recommendations of the Saint PauURamsey Print Shop Task January 1995 County Force Q I > -1'; �- �� - Table of Contents Secrion Executive Summary Section I: Background • Project Initiation • Study Process Section II: Findings • Printing Expenditures • The Intemal Print Shops • Issues • Restructuring Printing Services • Options For Restructiuuig Section III: Recommendations List of Tables • Tabie l: Saint Paul and Ramsey County Department Printing Expenditures • Table 2: Comparison of 1995 Proposed Print Shop Costs • Table 3: Comparison of Costs Per Impression • Table 4: Projected Equipment Replacement Cos[s List of Graphs • Graph I: 1993 City Sources of Printing Services • Graph 2: 1993 County Sources of Printing Services • Graph 3: 1994 Projected Sources of PED Print Shop Revenues • Graph 4: 1993 Actual Sources of RC Duplicating Revenues Page 3 5 7 23 2 q�-13� �- Ezecutive Summary During tfie summer of 1994 a special City of Saint PaullRamsey County task force was convened to look at the merits of consolidating the four printing facilities operated by the two govemments. Task Force members looked at five different approaches, including a status quo option, three options for partiai consolidaYion, and two options for full consolidation of the printing services. Service delivery issues were examined as well as short and long term cost impacts. At the conclusion of the study process, the group determined that benefits would accrue to both govemments if some restrueturing of the printing functions was implemented as quickly as possible. Savings It is estimated that cost savings for the two govemments will be created in three areas from these changes: • Annual print shop operating costs aze expected to be reduced by approximately $60,000; • Equipment replacement costs will be reduced by approximately $88,000 over the next two years; • City and Ramsey County department staff will save approximately $11,000 each year in Minnesota Sales Tax. These savings will be achieved through more e�cient use of staff and equipment, savings oas facilities and operating costs, and a lilcely reduction of one staff posirion. Key Recommendations A partial consolidation should be impiemented as quickly as possible during 1995 to take maximum advantage of e�ciencies and cost savings. This consolidation shouid include the P£D Print Shop, Ramsey County Central Duplicating, and the Saint Paul Police Aepartment Print Shop. The new function should be under the jurisdiction of the City of Saint Paul within the Departrnent of Planning and Economic Bevelopment for the present. 2. The shop operated by Community Human Services should remain in a status quo mode, except that a series of internal improvements should be iniflated to improve coordination and to more cleazly identify the costs of operating the internal shop. Staff in the shop should collaborate in a number of azeas with the new consolidated facility. The issue of consolidating this shop with the new facility should be revisited at the end of 1995, after the improvements are implemented. 3. T'he new facility should be located in the Ramsey County Government Center West Building to capture savings in facilities and operating costs. �1�-13b 4. The new consolidated facility should be renamed to reflect the fact that it will be an intemal service to both govemments. This will allow the City and County to take advantage of an exemption from the Minnesota Sales Tax that exists for internal services. 5. Two committees should be establisheci, a standing City/County Printing Services Advisory Committee and a short-teim technical committee to oversee the restructuring and automation of the billing system. 6. The Task Force did not address any employee issues (i.e. seniority, compensation, layoffs) that aze likely to be created by the sluft of staff from one govemment to another. An appropriate group of staff should be designated to begin working on these issues as soon as possible. 7. To achieve the maximum cost savings and other benefiu during 1995 the City and County adopt the goal of implementing these recommendations within two months. G5-►3b - Section I. Background Project Iniriation In early summer 1994, the Saint Paul/Ramsey County Joint Purchasing O�ce was asked by a representative of the Mayor's Office and a Ramsey County Commissioner to investigate the in- house printing services operated by the two governments. Facilities to be inciuded in the analysis were the large Print Shop managed by the City's Department of Planning and Economic Development, Ramsey County's Central Duplicating Shop managed by the Department of Information Services, the smali shop operated by the Saint Paul Police Department, and the small shop managed by the County's Department of Community Human Services. A key quesrion from both governments was whether any savings or other benefits could be obtained if the existing printing facilities were consolidated into a single operation. In response to ttus request, the Purchasing Systems Manager convened a task force of individuals who were knowledgeable about the existing printing operations or who had other relevant expertise to contribute to the discussion. Members were as follows: Convener Linda J. Camp, Joint Purchasing Office, Department of Finance and Management Services Ramsev Countv Representatives Jan Geisen, Central Duplicating, Department of Infoxmation Services Don Jones, Community Human Services Departrnent Jim Kavaloski, Department o£ Information Services Barbara Swan, County Attorney's Office Jim Theurer, County Manager's O�ce Vem Wehlage, Budget and Accounting Office City of Saint Paul Reoresentatives Thomas Boraas, City Council Research Don Brau, Print Shop/Department of Planning and Economic Development Dianne Davis, Joint Purchasing O�ce, Department of Finance and Management Services Carol Otto, Department of Planning and Economic Development Steve Roscoe, Saint Paul Police Department Ai Singer, 3aint Paul Police Department �15-i3� Study Process 'The full task force met three times between July and September to discuss the request and to do some background work. Steps at this point included a review of existing services and customers for each facIlity; a review of facilities, equipment, and staffing at each locaYion; and, identificaxion of some of the issues related to a status quo scenario versus those related to a consolidaYion In addition, the group brainstormed various possibilities for improving printing services. From these discussions, several possible options emerged for further discussion including; a) incremental improvements to the status quo; b) consolidation of some, but not all facilities; and, c) consolidation of all facilities. At the conclusion of the third group meeting, it was agreed that a subcommittee would do more detaazied analysis of the options and the costs and benefits associated with each and bring a draft report back for consideration by the full task force. This subcommittee met two tiates to further develop the options and evaluate cost and service issues. Individual members of the subcommittee prepazed cost information and did site visits to each of the printing operations. The full committee was reconvened in eazly December to review the work of the subcommittee and discuss the fmdings. VJhat follows is a detailed analysis of the City and County priating services and the Task Force recommendations for the future. 0 �5-(3� Printing Espenditures - Section II: Findings Both the City of Saint Paul and Ramsey County are "information intensive°° orgarazations. To carry out their public service missions, each routinely creates, collects, processes, and disseminates a wide range of information in a variety of forms. R'hile there is an increasing emphasis on electronic options, significant resources are still expended for printed materials. The table below provides a three-year overview of actual and anticipated printed ex�nses for the two governments. The numbers aze actual or proposed departmental expenditures for printing services under City budget codes 0241 and 0242 and Ramsey County budget code 020501. Actuai or proposed costs for operating the print shops aze not factored in nor are depar�tental copier purchases. Table i. Saint �aul and itamsey Connty Departmeni �'rinfing Espenditares 1993 1994' '1995 Tota] Enti Actual To Date Pronosed Expenditures Saint Paul DepartmenYs Ramsey County Departrnents Totals $627,43i . $332,123 $631,086 $82G,�7b $1,453,907 $606,740 $93$,863 $685,371 $1,317,457 $I,i90,640 $2,i 19,587 �3,710,227 City expenditures through November 1994; County expenditures tluough October 1994. City and County departments obtain printing services in several different ways. By faz, the largest share of services are obtained &om one of the four in-house print shops. In addition, the Joint Purchasing Office bids out various services that cannot be obtained in-house. Departments also make use of a master contract for forms management services and purchase printing under the authority of City and County small purchase (Pick up Order) policies. (See Graphs 1 and 2 for distribution of sources during 1993.) ' IJ ��t;� Graph 1. 1993 City Sources of Printiag Services 1993 City Souress of Printing Services Intemal Prirrt Shop 55% llp Orders 10% onuact 10% Graph 2. 1993 County Sources of Printing Services 1993 County Sources of Printing Services Intemal PriM Shop st� Up Orders 7% rMract 18% Fortnal Bids 25% Formai Bids 14% q5- i3� The Internal Print Shops -� At one time, severai City of Saint Paul departments operated their own print shops, including the Saint Paul Public Library, the Division of Public Aealth, the Personnel Office, and the Department of Planning and Economic Development (PED). By 1985, all had been phased out except the PED Shop wluch then began providing services more broadly within the City, and eventually to County deparhments as well. Ramsey County Central dupticating was originally operated as a shared City/Ramsey County service under the auspices of a"City/County Services" unit. This was jointly funded by the two govemments. Although the lustory is not entirely cleaz, the shazed printing operation was eventually subsumed under the Ramsey County Central Services Department that was created in late 1974 or early 1975. Statistical records &om 1979 show that 41% of this print shop's business came from the City. However, business from the City steadily declined to 24.7% in 1990 when the PED Print Shop purchased a high speed duplicator. City use of the central County shop has continued to decline to only 11 % in 1993. PED Print Shoro The lazgest internal facility, in terms of volume handied, and with the most sophisticated equipment, is the Print Shop under the jurisdiction of the City's Department of Planning and Economic Development. Capabilities include 4-color and multi-color printing, layout and design of materials, collating, printing all size booklets, type setting, customer and standard folders, and high speed duplicating. The shop is located on the second floor of the Lowry Square Building: It is staffed as foliows: 1 Duplicating Shop Manager, 2 Duplicating Equipment Operators, and 1 Duplicating Equipment Operator/2-Color. This printing facility is operated as an enterprise fund. That is, the operation must generate revenues sufficient to cover costs. (No other City budgets subsidize this activity.) Services are bilied at actual cost plus a 5% markup, which is set aside to finance future equipment replacement. It is estimated that, in 1994, 74% of the revenues will come from City departrnents. Ramsey County will generate approximately 26% of 1994 PED Print Shop total revenues. 0 �— ��-�3� Graph 3. 1994 Projected Sources of PED Prinf Shop Revenues 1994 Projected Sources of PED Print Shop Revenues Ramsey C,,,,...., 26�JCi Ramsev Countv Dunlicatina ED cJ% Ramsey County also operates a lazge central duplicating facility, transferred from Property Management to the Department of Information Services in February 1994. It also provides a range of printing services, though it is particulazly well equipped to handle high speed duplicating. Color and offset capabilities are moze limited than the PED shop. The County facility is located in the West Building with good storage capabilities and access to a loading dock. Current staff include: I Clerk IV, and 2 Duplicating Equipment Operators/Layout. Like the PED shop, this facility recovers its costs by billing for services provided. In 1993, 88% of tota] revenue was generated by Ramsey County departments, 11% by City departments and, 1% from other sources. 10 City of SaiM Paul 49% �,,5- l3� Graph 4. 1993 Actual Sources of RC Duplicatin¢ Revenues 1993 Actual Sources of RC Dupiicating Revenues Ramsey Courrtv 88% OU16P 1% 11% Department Facilities The City and County each have an additionai small printing facility operated primarily for the benefit of a single department. On the City side, the Police Department has its own shop located in the Public Safety Building on East 11 th Street. It is equippnd with a Kodak 97 copier and one Multi offset press, along with a small number of pieces of s.,pport equipment. It is staffed by one Duplicating Equipment Operator. Jobs produced in a typical year include forms, envelopes, booklets, newsletters, and awazd certificates. This activity is not operated as a revenue center, but rather is supported by the General Fund. Ramsey County's Department of Community Human Services also has its own in-house print shop located in the Ramsey County Government Center East Building. Users of this facility include functional azeas such as administration, social services, and personnel, along with the County Nursing Home and Lake Owasso. T'here aze two Duplicating Equipment Operator/Layout positions that work under the direction of a supervisor within the Support Services section. All three individual handle other non-printing related duties as well. The equipment in this location, a new high speed duplicator and two relatively old Multilith offset presses which will need to be replaced in the near future. Like the Police shop, this facility also has a limited range of support equipment, such as a plate maker and drill punch. il ��°►�� Table 2. Comparison of i995 Proposed Print Shop Cas#s __ . Ca2eQOrv ? PED Sfion .. RC Shon Poiice 5hon Hum. 5erv. Totals ,_ , ,-_ . �ersonuel :- '�379,422 $116 $ _39,a97 - : � 79,383 . [ $413,�67 C�peratiag $ -1,740 $ 3;654 $ �50. ° : $ _ -36D $ 6,2fl4 ° $uppon :. _ , �.ac�ities _ $ 20,fl00 $ ]3,U29 $ *` $ * $ 33,Q29 Equipmenk & $ b.1,223 _ : $ 76,flS8, :'; ::.$ ;2,799 .. . $ 18,30D . ° .$158,380 . Maintenance - _. Supplies �� Torals $117,728 $ 50,686 $440,394 $ 73,(325 _ .` $ 2D,000 $.SA,000 $ i,soo $ �1,339 $ .. fl 5264,753 � s6,e�3 $284,U31 $ 66,b85 . .. $i52,043 $943,15$ # Allocarion of actaal facilities costs was not available. The proposed 1995 budgets for the four shops appeaz in Table 2. Issues As part of the reseazch and analysis process, Task Force members identified a number of issues related to the future direction of printing services for the City and Ramsey County. Some of these issues will exist whether or not a restructuring of services takes place. Efficiencies Efficiencies in printing services aze directly linked to the type of equipment available and the management of individual printing jobs. For example, if jobs are properly planned, more work can be run in a day than if the machine is idle for some period of time, thus resulting in more cost effective use of equipment and staff: 12 a� -l3L �'able-3. Compsrison flf Costs Per Impressioa _.- E� 1493 Actual Iinorassions 1493 Arfual Costs i493 Gosfltmnression PED Shop . -23,SOO,OUO -: $393,190 - $.4l7perimpression Police -2,1flD,ODU_`' $62;736 - .."-�.D29perimpression RC Dup. -._ �,382,535 .: ° $288,030 - '"$-�139.perimpression ....:- ,_.. _.. Hutn. Serv `A,$4U,000 "-:$126,000 _ <. $.D26perimpression PED 5hop Police - - RC Dup. Hum. Serv ]995 Proaosed 1995 Proaosed 29,100,DD0 $440,399 - 2,300,400. $ b6,585 9,2��,�QQ $284,031 5,400,U00 . $152,043 1995 Costs�imvression $,015 perimpression $.029per impression $.fl3 per impression . $.D28 per impression . One way to look at the overall efficiency of an operation is to relate annual shop operating costs to the number of "impressions" (an impression is one pass of one page through a printing machine) produced in a yeaz. Task Force members used this approach to assess the efficiency of the four print shops. By this measure, the PED Print Shop is the most e�cient, with an actual cost per impression during 1993 of $.017 and an estimated cost per impression for 1995 of $.015 (see Table 3). Service Deliverv By faz, the biggest issue generated by any kind of restructuring of printing services is quality of services. The two internal deparfinent printing facilities exist primarily because the users want to be able to feel co�dent that quality printed materials wili be available when needed. This concern exists for users of the two central print shops as well. A question raised when examining various options for printing was whether customer service would remain the same or be improved. A lower qualiry of service would not be acceptable. 13 `�f�' �� Under the current structure, City and County departments have several printing options to choose from. If one of the two main shops cannot meet a deadline, the other shop may be able to accommodate the request. The multiple facilities provide a measure of back ug as well as competition. If a consolidation were to take place, these elements would be lacking intemally, though competition and backup wouid be available through private printing sources. One consolidation strategy explored was the idea of combining all of the required printing equipment into a single location at the present site of RC Duplicating in the Ramsey County Government Center West Building. Advantages to this approach include: the availability of storage space, easy access to loading docks for bulk paper deliveries and job pickups, significant savings in facilities costs, and the possibility of making an azray of printing services availabie in one location. Questions were raised about whether, with a single, consolidated facility, it would be possible to easily and cost effectively drop off and retrieve printing jobs. Accessibility is an important service issue for all City and C;ounty printing customers. Some members of the task force felt it was possible that new °'hidden" costs could be created in transporting documents under a relocation of facilities. Paper Costs Paper costs have been rising and aze likely to continue to spiral higher during the next yeaz. Some of the current paper contracts established by the Joint Purchasing Office do not appear to meet the needs of the vazious print shops. These contracts need to be restructured to take maximum advantage of opportunities such as bulk deliveries and purchasing direcdy from the manufacturer. While such steps cannot prevent a price increase, they can help stabilize costs. ui ment A number of pieces of equipment will need to be replaced within the next 3 years. This includes both printing presses and the smaller support items, such as drilling equipment. As printing requirements grow more sophisticated, so will the need for more sophisticated equipment. Task Force members raised the question of whether it made sense for each location to be creating the same kinds of internal capabilities. Under a consolidated envuonment, fewer pieces of more efficient equipment would need to be purchased. Over a period of time, this would result in savings in capital and maintenance costs. Table 4 provides estimates of future equipment replacement costs if the four print shops continue to operate independently from one another. Another tangential benefit of consolidating equipment is in the azea of plate making; the cost involved with duplicate equipment or sending out for negatives would be greatly reduced. _ 14 y�-[3l� _ Table 4. Projected Equipment Replacemeat �osfs* . $nfi Items , - Amovnt � 800klet'IViaker ` ._ . $ S,iUO -Coilator _ . , : .. .,:..: S 4,50� . : : Folder . . . .: : - 80U s„bcco�at 3 7a,soo ; _.. ,..,. _ .:: ..,. ,. _ ,. Grand Totai , _ .; 5319,$00 . . .. � ,1 ; :CHS S7iop .- New Press `" � 23,p(i0 _ . 'Plate Maker - E 9,Ott0 ° _... Subtotal __: : ":_:� 32,WU _ .. _ __ . �olice Shop ;:. , °'=Plate Maker °� 5 9,4(!0' .. , _. . ' > -, _ Cnllator .. ": : t S 4.00D . . ` ;Sltbiotai : : ; :' _S 13,000. . ,: _ - . #tC. �ual ;3dew �'ress -_ €. g 53;000 _ ,.- .. Duplicating .. Plafe IvTaker '..: . -. .;...:,.5 9,000 ., . - _ , " Estimated repiacemenu io occur in 7996 or 1997 .. BillinQ Services The biliing function is cunentiy quite cumbersome within the two central printing shops and wouid become more so under any kind of consolidation if no changes were made. There is a need to look at options for automating billing tasks and integrating the system with City and County financiai systems. Electronic Options The availability of more and more computer technology within both local govemments has strong implications for the future of printing services. As more and more department staff rely on electronic mail and document transmission capabilities, the need for printing certain kinds of paper documents will be reduced. Both Saint Paul and Ramsey County are looking carefully at how services are delivered. As processes are re-engineered, it is typical for forms and other kinds of paper work to be eliminated or greatly reduced. Printing equipment itself is being revolutionized by computerizarion. Enhancements to capabilities wiii provide the opportunity for greater efficiencies that will very likely have an impact on the scope and costs of services in the future. 15 ��-�� Finaily, the availability of erectronic document transmission within City and County operations will make it easier for customers to transmit requests directly to a printing facility. This has the potential to help resolve some of the pickup and delivery issues associated with any kind of restructuring. User Trainine There was universai agreement among Task Force members that users of printing services very often do not fully understand the printing options that are available and how to select the most cost effective option for a particular need. Some also may not understand how to appropriately plan for printing services to take advantage of oppominities to save time aad money. In the past, the print shops have played a limited role in educating customers about various options. All agreed that any improvements in future printing services should include having print shop staff take a more proactive role with customers. Possibilities identified here included offering periodic �aining sessions and providing some kind of manual on available printing services. Sales Tax Under Minnesota law governments who purchase grinting services from another govemmental entity aze required to pay the 6.5% State sales tax to the State on those services just as they would pay tax on services received from a private vendor. However, printing services provided internally aze exempt from this requirement. Consequenfly, Ramsey County Central Duplicating is currently required to collect the sales tax from City customers and the PEB shop is required to collect the tax from County customers. It is estimated that in 1994 the total amount of sales tax collected from departments by the two main print shops is approximately $ 10,�00. During the cotuse of the study process, the State Department of Revenue was contacted to determine the impact of consolidation on sales tax. Information provided indicated that if the consolidated fund was structured as an intemal service to both govemments, then departments would not be requued to pay the sales talc. The estimated annual cost would then be eliminated. Communitv Human Services Special Issues A number of special issues surfaced with respect to the Community Human Services (CHS) printing function. Services provided by the Department aze financed by a range of funding sources, including various state and federal grants. Likewise, an artay of federal, state, and local requirements gready impact how services aze delivered, including the types and numbers of forms and documents needed. Unlike the other printing functions analyzed, the CHS print shop is not budgeted as an independent activity. Rather, costs associated with providing this service aze typically merged with costs for other support services for the department. In addition, staff responsibilities aze similariy merged. That is, the two print shop staff also provide other support services and report to an individual who handles other non-printing related responsibilities. For all of these reasons, 16 ��-t3� it is much more di�cult to sepazate out the printing function and assess any benefits to be gained through a merger or res�ucturing of printing services. Some intemal ground work is needed before a sound analysis is possible. Oreanizational Placement The Task Force briefly discussed the placement of a consolidated print shop within the organi7ational structure of the City. Some individuais raised questions about whether it made sense to continue operating a printing function within a deparnnent whose mission revolves around development and planning issues. There was consensus that the print shop function had been working well in this location, and that it would make sense to keep a consolidated shop within PED during the transition. The issue could be revisited later if there was a need to do so. Restructuring Prinring Services Overall, Task Force members felt there were a number of ways that City and County printing services could be improved. Such things as restructiuing the paper contract, providing customer �aining, and taking advantage of electronic technologies, should happen under any restructuring scenario. Several options for restructucing through combining the print shops were developed and compazed. Advantages and disadvantages associated with any of the consolidations are as follows: Advanta2es 1. Fewer points of contact and accountability for printing services for customers 2. More efficient use of equipment 3. Avoids costiy duplication of equipment • lazge presses • support items such as drilling and binding equipment • negatives/plate making 4. More internai printing services under the jurisdiction of an experienced printing manager S. Potential savings in azeas of • facilities • materials • staff • operaUng support • equipment • sales tax paid by departments 17 ��-136 6. More efficient use of available staff • fleaubility • improved backup capabilities (vacat►ons, sick leave) • cross training 7. Consolidated billing • customer impact • cost and time sa•rings 8. Uniform intemal billing rates 9. Support exists within both govemments for restructuring services 10. Better able to keep up with technological changes DisadvantaQes 1. Creates questions about whether same level and cost of service will be provided 2. Accessibility to a central facility may be an issue for some cvstomers 3. Potential layoff of staff 4. Staff issues (compensation, seauority, etc.) would need to be worked out with unions under a consolidation 5. Less intemal competition 6. No internal back up services 7. Billing rate stability unknown during �ansition period 8. Amount of savings most likely will be small during initial years of consolidation 9. Adjustment for print shop staff and customers Options For Restructuring A summary of each alternative identified follows. It is important to note several items related to the costs used. � ��-i3� co�u -- As previously stated, the PED Shop and the RC Cen�al Duplicating shop cover their costs by charging customers for services. All costs of operations, including facilities, aze clearly identified in their annual budgets. This is not true for the two internal shops. In the case of the Police Shop, the Generai Fund Activity includes many of the costs for operations, but exciude such things as fringe benefits, space, and electricity. It also includes costs for paper needed to run the department copiers. Print shop costs for Community Human Services (CHS) are not separately budgeted, but rather aze aggregated with other internal service costs. For purposes of the costs comparisons, every effort was made to identify all of the costs actually associated with each operation, whether it appeared direcdy in a print shop budget or not. In some areas, such as facility costs for the two intemal shops, it was difficult to pull out specific aznounts, so the best information available was used. There are some other "soft costs" associated with printu►g services that were discussed by Task Force members, but not fully specified here. These include the time �epartment staff sp�nd preparing documents to be printed, distributing printing items, and transnutting copies of items to be printed. Because of the di�culty in producing accurate assessments, none of these kinds of soft costs aze included in the analysis. (Refer to Table 4 for detail on equipment replacement costs.) Option 1. Status Ouo/Incremental Improvements Under this option, all print shops would continue as they have in the past, with the following improvements: • The master contract for paper would be restructured to provide greater benefit to all shops. • Representatives of the four shops would interact more frequenUy and share information about equipment, customer issues, and other related items. • The shops would sponsor training to help customers make better printing decisions and better understand procedures for placing work requests. • Improvements would be made in the billing systems. Though there would be greater coordination, each shop would continue to purchase presses and supporting equipment as needed, creating the likelihood of duplication of equipment. Limited cost savings aze envisioned with this option; in fact, costs aze likely to increase because of the need for all shops to replace equipment. 19 �� Estimated 1995 City/Coun�y Print Shop Costs: $ 943,158 Estimated 1996/97 Equipment Reptacement Costs: $ 119,800 Estimated Revenue From Surplus Equipment: $ 0 Total Projected Costs: $1,062,458 Esrimated Cost Per Impression: Remains the same as in Table 3 Estimated Sales Taz Saviags: 0 Option 2. Partial Consolidation Three options for partial consolidations were evaluated: a) Consolidation of the two lazger shops b) Consolidation of PED, RC Duplicating, Police with Collaboration with CHS c) Consolidation of PED, RC Duplicating, CHS with Collaboration with Police 2a. Consolidation of the two lar e�shops onlv Here the PED Print Shop would consolidate with Ramsey County Central Duplicating. The two department shops would continue in their present mode, though there would be greater coordination with the consolidated shop. Improvemenu would include restructuring of the paper contract, improving and combining the billing function, and customer h�aining. The combined facility would be in the location of the present RC Duplicating facility in RC Govemment Center West. Under this scenario, cost savings aze possible because of the co-location of the two facilities (overail reduction in rent and some administrative costs), savings on equipment purchases, and potential savings because one position would be eliminated. Some equipment could be sold as surplus. Customers would not have to pay the State sales t�. Estimated 1995 City/County Print Shop Costs: $ 893,876 Estimated 1996/97 Equipment Replacement Costs: $ 45,000 Estimated Revenue From Surpius Equipment: $(9,2251 Total Projected Costs: $ 929,651 Estimated Cost Per Impression For Consolidated Unifs: $.023 Estimated Sales Taa Savings: $10,700 E3�i �fi�-13� 2b. Consolidation of PED/RC Dunlicatin¢/Police Collaboration with CHS Tlris option combines the PED Shop, the Police Shop, and Ramsey County Central Duplicating into one operation. All of the changes and areas for savings identified in 2a above are also applicable. Additional benefits aze provided because of even greater efficiencies in equipment use and avoidance of even more equipment replacement costs in the future. Many pieces of support equipment could be sold as surplus. Though the Community Human Services (CHS) Print Shop would not be formally consolidated here, a strong parhierslup would be created. CHS would work to make some improvements in intemal operations and send appropriate jobs to the consolidated shop rather than attempting to do them in-house. Staff would consult with manager of the consolidated facility on equipment before new purchases were made. The subject of consolidating with the other shops would be revisited at the end of 1995. Estimated 1995 City/County Print Shop Costs: $ 885,163 Estimated 1996/97 Equipment Replacement Costs: $ 32,000 Estimated Revenues From Surplus Equfpment: $ 15 45 Total Projected Costs: $ 901,818 Estimated Cost Per Impression For Coasolidated Units: $.021 Estimated Sales Tas Savings: $10,700 2c. Consolidation of PED/RC Duplicating CHS Collaboration with Police This option is similar to 2b, but consolidates the CHS with the two lazger shops and leaves the Police Shop in a status quo mode. It is estimated because of the unique needs of CHS customers, it would not be possible to comp]etely eliminate the printing operation in the RC Government Center East Building. It would be necessary to retain at least one machine and one staff person. Estimated 1995 City/County Print Shop Costs: $ 857,679 Estimated 1996/97 Equipment Replacement Costs: $ 13,000 Estimated Revenues From Surplus Equipment: $ 1( 3,8501 Total Projected Costs: $ 856,829 Estimated Cost Per Impression For Consolidated Units: $.020 Estimated Sales Taa Savings: $10,700 21 �� - i�� O_ption 3. Full Consolidation Under this option all shops would come under the jurisdiction of a single printing manager. In option 3� satellite facilities are left at the Police Department and RC Guvernment Center East, though there is a single point of accountability and management Estimated 1995 CitylCounty �rint Shop Costs: $ 857,679 Estimated 1996/97 Equipment Replacemeat Costs: $ 0 Esrimated Revenues From Surpius Equipment: $(9.225) Total Projeeted Costs: $ 848,454 Estimated Cost Per Impression For Consolidated Units: $.019 Est►mated Sales Taz Savings: $10,700 Under option 3b a satellite facility would be left at RC Government Center East, but not at the Police Department. There would be a single point of management and accountability. Estimated 1995 City/County Print Shop Costs: $ 847,166 Estimated 1996/97 Equipment Replacement Costs: $ 23,000 Estimated Revenues From Surplus Equipment: $ 19 270 Total Projected Costs: $ 859,896 Estimated Cost Per Impression For Consolidated Units: $.018 Estimated Sales Tax Savings; $10,700 22 ��-13� Section III: Recommendations Based on a review of the service, financial, and other issues, Task Force members feel that the City of Saint Paul and Ramsey County printing functions be restructured and not remain in the present configuratioa Consensus was reached that the City and Ramsey County should begin impiementing option 2b—Consolidation of PED, RC Central Duplicating, Police—as quickly as possible to achieve tfie maximum amount of benefit during 1995. A detailed summary of the recommendations aze as foliows. Consolidation Recommendations 1. Consolidate the PED Print Shop, Ramsey County Central Duplicating, and the Police Prini Shop into a single facility, under the direction of the existing Print Shop Manager posit�on and under the jurisdiction of the City of Saint Paul in the Deparhment of Planning and Economic Development.* (T'his would mean a strift of Ramsey County Equipment Operators to the City and the likely layoff of a RC Clerk Typist IV from the duplicating operation.) 2. Relocate the PED and Police Department equipment and staff with the RC Central Duplicating staff and equipment at the Ramsey County Government Center West Building. A small amount of renovation and expansion space will be needed. � 3. Sell or redistribute intemally all duplicate and unneeded equipment that results from the relocauon following stanc}ard City and County surplus disposat procedures. Any revenues generated should go to the governmental unit that originally purchased the equipment. 4. Allow the CHS Print Shop facility to remain within the department, but begin implementing the following changes: • Improve forms/records management through consolidating client forms, eliminating obsolete forms, and implementing electronic alternatives; • Better coordination of printing within CHS; • Maximize use of the new central duplicating facility to assure that most cost effective options are chosen; • Collaborate with the new central duplicating facility on operating problems, assessing customer needs, print shop safety issues, restructuring maintenance agreements, etc. • Maximize use of communications technology to eliminate the need for printed forms, communicate with customers of the CHS shop and the new central duplicating shop; • Separate out and document CHS print shop operating costs from the other support services to make it easier to assess e�ciencies and the need for further consolidation. 5. Including the CHS shop in the new consolidated shop should be revisited at the end of 1995 after the above improvements are made. 23 ��-�3� 6. Rename the new central duplicating facility to reflect the fact that it is an internai service to both govemments, though under the jurisdiction of the City of Saint Paul. This will allow both govzmments to take advantage of an exemption from the 6.5% Minnesota Sales Tax. Immediately establish a small technical advisory committee to begin restructuring the billing system. It is recommended that members include representatives from the City Accounting Aivision, Ramsey County Budget and Accounting, and appropriate computer staff: 8. Immediately establish a standing Printing Services Advisory Committee to help oversee the �ansition and advise the new print shop staff on customer service and other issues on an ongoing basis. The committee should be structured as follows: • i representative of the Saint Paul Police Department • 1 representarive from the CHS Print Shop � • The current manager of the PED Print Shop • An appropriate buyer from the Joint Purchasing O�ce • 2 City department printing services customers • 2 Ramsey County department printing services customers • The curtent manager of RC Central Duplicating • 1 representative of Ramsey County Informaflon Services (computer expertise) • 1 representative of Saint Paul's Information Services Division (computer expertise) 9. The new Advisory Committee should immediately conduct a survey of printing services customers and use this information to help guide the restructuring and to develop future information and outreach activities. 10. The manager of the new consolidated facility should continue to work with staff in the Saint Paul Police Deparnnent to struchue services to address some of the speciai needs of SPPD that will be created by the shift of facilities and staffmg. T"his should include assistance with ordering and inventorying of printed materials, along with pick up and delivery of printed items. I i. As soon as possible, begin implementing the other improvements, such as restructuring the paper contract and offering customer training. * Note: Task Force members felt that the consolidated facility could be managed equally well by either the City or Ramsey County. The finai recommendation was to consolidate under Ciry jurisdiction because there was a slieht advantage created by the fact that the largest shop with the newest equipment was on the City side, along with the printing manager position. 24