Launch Slideshow

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Building the budgeting process

Building the budgeting process

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    Photo: City of Houston

    The Houston vision is to create a self-perpetuating vehicle and equipment fund that requires new appropriations of zero dollars specifically for the replacement and maintenance of the public works and engineering fleet.

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    Photo: City of Westminster

    Steve Grabarek, a mechanic in Westminster, Colo., helps hold the line on replacement costs through quality maintenance programs.

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    Photo: City of Houston

    Minh Tran (left) and Wilfred (Willy) Maranon repair the brakes on a Ford 9000 dump truck in Houston's main fleet shop.

One key is to maintain the integrity of the fund so that the funds are not diverted for other purposes. “You have to have guidelines set up so that the fund is like a sacred cow,” said Charlie Caudill, fleet manager in Yuma, Ariz. “You can't tap into that fund for every little special interest group.”

It can be tempting to use these funds for other legitimate needs rather than vehicles and equipment, Bowker said, adding that some cities write protection for the fund into the city charter.

A main advantage to this system is that the operating groups can maintain onsite only the base number of units to meet their annual work program. Any additional units needed would come from the pooled assets, which reduces fleet size, age, and cost.

Vehicles and equipment would be replaced based on the goal of achieving the greatest return for the fund. New equipment spending would not be subject to fluctuating funding sources. The central rental pool of vehicles and equipment not needed on a continuous basis by each operating group would be shared by all of the operating groups.

Two-Year Budgeting

In Westminster, Colo., city officials use a rolling two-year budgeting process to approve new equipment purchases. Westminster has an equipment replacement fund that is supplemented by a public safety tax to pay for equipment such as fire apparatus and police cars.

Through 2005, for example, fleet manager Judy Workman met with various operating department representatives to review and project equipment replacement costs for the two-year budget. The budget covers 2007 and 2008, and Workman projects fuel and maintenance costs as well as equipment replacement.

“I work with the departments so that I know what their costs and needs are,” said Workman. “We can upgrade or downgrade a vehicle based on utilization. For example, the city elected to purchase a crew-cab pickup for the street crew, instead of a conventional pickup. The crew cab can hold the entire crew, so that saved buying a second vehicle.”

Once the departments get their two-year budgets, they work on them during 2006 and project costs for fiscal years 2007 and 2008. The two-year budget is reviewed by the city manager's office and the final version for the next year is approved by city council in about October. Every year, a new year is added to the two-year budget. So, in the case of the 2007–2008 budget, it has been worked on during 2005 and 2006—before 2007 actually rolls around.

“The two-year budgeting process looks further ahead; it lets you strategize earlier over what you need,” said Workman. “You can't really come back after one year and correct something in the next fiscal year. This way, for the first year, or near-term year, you really have your budget, and all you do is to review it.”

By mid-December, Workman made a final review of equipment needs for 2006 so that orders could be placed. By January, the city of Westminster requested proposals for new equipment that is not on state bid.