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Vehicle Replacement Cycles

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Presentation on theme: "Vehicle Replacement Cycles"— Presentation transcript:

1 Vehicle Replacement Cycles
Sam P. Lamerato, CPFP Superintendent of Fleet City of Troy, MI

2 Vehicle Replacement Derailed
Tight Budgets Furlough Days Reduced Staff Deferment of Vehicle Replacement Dealing with City Management Attending City Council Meetings

3 Budgets Zero Growth Budgets
Reduce or Deferment of Vehicle Replacement Budgets Transfer Funds from Capital to Operating? Reduced Staff Positions and Hours Significant Increase in Maintenance Costs Avoid Peaks and Valleys – Reserve Fund?

4 Budget 2010-11 10/12/2010 $1,553,000 SECTION A - REPLACEMENT UNITS
ITEM QTY. REPLACES DESCRIPTION UNIT COST EST. COST 1 10 A Police Patrol Cars $24,500 $245,000 2 5 B Detective Cars $23,000 $115,000 3 C Police Command 4X4 $28,000 4 D Fire Department 4X4 $56,000 E Staff Vehicles Hybrid $25,500 $51,000 6 F Cargo Vans $18,000 $36,000 7 G Pickup Trucks $17,000 $68,000 8 H Pickup Trucks 4X4 W/Plows $25,000 $50,000 9 I 2 1/2Yd. Dump Trucks 4X4 W/Plows $30,000 $120,000 J Catch Basin Cleaner/Sewer Jet $325,000 11 K Crew Truck W/Air Compressor $100,000 12 L 5-7 Yard Dump Truck Stainless $140,000 W-Snow Plow, Salt Spreader & Float 13 M 10-12 Yard Dump Truck Stainless $170,000 14 N Skid Steer Loader $32,000 15 O 72" Riding Mowers Zero Turn $1,553,000 SECTION B - ADDITIONAL UNITS REQUESTED BY Fleet Tractor W/Snowblower (sidewalks)

ITEM EQUIP. # DESCRIPTION A Police Patrol $3,500 each 10 $35,000 B Detective $3,500 each 5 $17,500 C 902 2007 Ford Expedition 4X4 Command $8,000 D 63 2003 Chevrolet Tahoe 4X4 $6,000 77 2002 Ford Explorer 4X4 $4,500 E 172 1999 Plymouth Breeze $2,000 173 F 247 2000 Chevrolet Cargo Van $2,500 256 G 236 2002 Dodge Pickup $3,000 242 246 262 H 202 1998 Dodge Pickup 4X4 $3,500 266 2002 Dodge Pickup 4X4 W/Plow $5,000 I 400 2001 Dodge 21/2 Yd. Dump Truck 4X4 $5,500 401 406 411 J 414 2002 Vactor Catch Basin/Sewer Jet $125,000 K 421 1991 GMC Crew Truck W/Compressor L 439 1994 GMC 5-7 Yard Dump W/Plow M 435 1997 Ford Yard Dump W/Plow N 470 1997 John Deere Skid Steer Loader O 622 1999 John Deere 72" Mower $273,500

6 Furlough Days & Reduced Staff
Same Equipment Fewer Repair Hours (96 per Tech) Same Equipment Fewer Techs Same Equipment Same Repair Dollars 96 less wench turning hours

7 Deferment of Vehicle Replacement
Deferred vehicle replacement appears to be the key factor behind the increase in maintenance expenses in CY-2009. More expensive repairs due to aging inventory. Older fleets were incrementally impacted by a spike in unscheduled, higher cost maintenance. Increased downtime Source: Automotive Fleet – March 2010.

8 Replacement Funding Even in good economic times, securing sufficient funds for timely vehicle replacement is a challenge for many organizations. This challenge stems in part from a lack of understanding of the trade-off between a vehicle capital and operating cost. Source: Government Fleet March/April 2010

9 Dealing with City Management
Vehicle Replacement Plan Life Cycle Cost Analysis – Best Practices Project Long-Term Replacement (5 – Year Plan) Extended Warranties (5 years 100,000 Miles – Power Train) Advanced Design & Technologies Lower Cost per Mile Reduced Downtime

10 Vehicle Replacement Program
Best Practice Method Survey a number of Best in Class fleet organizations which have comparable fleets. Take into account factors unique to each fleet organization such as annual usage levels, types of use, number of back-up units available, weather and operating terrain. FASTER 15 Point Report 3109

11 Vehicle Replacement Program (cont.)
Developing a set of vehicle replacement criteria establishes the foundation for a planned approach to fleet replacement. Fleet organizations can use one of two primary methods for establishing vehicle replacement cycles. Empirical Method: Involves using a formal life- cycle cost analysis technique (such as equivalent annual costs) to calculate the least costly life-cycle per class of vehicle.

12 Vehicle Replacement Program (cont.)
Best Practice Method: Involves surveying peer organizations with similar fleet and operating conditions. Regardless of which method is used, life-cycles must be developed with the goal to: Minimize overall fleet cost; Maximize vehicle availability; Provide fleet users with safe and reliable tools to perform their jobs. Source: APWA Vehicle Replacement Guide

13 Vehicle Replacement Funding
Ideally, a vehicle should be replaced around the same time that the total cost of ownership is at a minimum – before the total cost curve begins to turn upward. Decision makers who assume cutting replacement purchases is a good way to help balance the budget must understand such cuts usually transfer a portion of the fleet costs from capital to operating. Source: Government Fleet March/April 2010

TOTAL COST * Ideally, a vehicle should be replaced around the time this total cost of ownership is at a minimum – before the total cost curve begins to turn upwards. OPERATING CAPITAL TIME/USAGE

15 Quality of Service Source APWA Calculating Public Fleet Rates
The quality of services declines when the fleet wears out, becomes technologically deficient or requires repetitive or ongoing maintenance. Fleet assets have at least three lives: Service Life – Amount of time (years, miles or hours) it is capable of providing service. Technological Life – Productivity decline of current fleet asset compared to newer assets. Economic Life – Total allocation of cost associated with the vehicle over a period of time. Source APWA Calculating Public Fleet Rates

16 Vehicle Score Card (Sedans & Lt. Truck)
Age – One point for each year – based on in service date. Miles/Hours – One point for each 10,000 miles or 250 hrs. of usage. Type of Service – Points assigned as depending on the type of service the vehicle performs. Reliability – 1 – 5 points based on frequency that a vehicle is in the shop for repairs per month (P.M. work is not included). M&R Cost – 1 to 5 points based on the total life M&R cost (not including accident repairs). Condition - 1 – 5 points for body condition, rust, interior condition, anticipated repairs, etc. Point Range – Under 18 Excellent, 18 – 22 Good, 23 – 27 Qualifies for replacement and 28 and above Immediate Replacement






22 Attending City Council Meetings
Be prepared to answer tough questions. Know Your Fleet - Run it like a business. Have your facts straight and in-hand. Convert Engine Hours into Miles (30 miles per hour) Utilization of Vehicle/Equipment Life-cycle Cost – 15 point FASTER report, etc. Inform Mayor and Council of the importance of timely vehicle replacement. Cost Savings Information – Reduced Downtime Life-Cycle costing calculates ownership and operating expenses throughout the working life of equipment. CPM Average age of vehicles by class. Put the focus on them.

23 Keys To Success Keep Management and Councils in the loop with quarterly Fleet updates. Invite Management and Council for a site visit of your Fleet Operation. Don’t replace underutilized vehicles. Buy the correct vehicle for the job. Maximize resale & trade-in values. (benchmark)

24 Quotes ABILITY is what you are capable of MOTIVATION determines what you do ATTITUDE determines how well you do it. Excellence is not a skill. It is an attitude.

25 THE TRICK IS TO FIND THE MAN IN THE COFFEE BEANS: This is bizarre - after you find the guy - it's so obvious. Once you find him - it's embarrassing, and you think, 'Why didn't I see him immediately?' Doctors have concluded that if you find the man in the coffee beans in 3 seconds, the right half of your brain is better developed than most people. If you find the man between 3 seconds and 1 minute, the right half of the brain is developed normally. If you find the man between 1 minute and 3 minutes, then the right half of your brain is functioning slowly and you need to eat more protein. If you have not found the man after 3 minutes, the advice is to look for more of this type of exercise to make that part of the brain stronger!!! And, yes, the man is really there!!!

26 Questions

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