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.

Workman insists on getting accurate equipment usage and cost information, with the help of the FASTER software from CCG Systems. “We look at utilization by class of vehicle, and we look at costs by unit,” she said. “We key on the average cost of operation within a class, and then try to look at which units run above the average—then figure out why.”

Interdepartmental collaboration with fleet maintenance is formalized through quarterly meetings of the fleet executive board of directors, which includes all of the department representatives. Recently, Workman formed a fleet utilization subcommittee, consisting of the purchasing agent, finance analyst, and major department representatives from such departments as the police, fire, utilities, streets, parks, and recreation. That subcommittee will review criteria for vehicle replacement that include: age in years, cost-per-mile comparisons by class, use by miles or hours, maintenance and repair costs, and depreciation value.

Workman seeks to hold the line on replacement costs, and budgeted numbers show that. The original 2004 replacement budget contained $1.4 million; for 2005, the number was $1.5 million; and the 2006 budget includes $1.2 million for vehicle replacements. The fleet grew substantially at the end of 2004, when the public safety tax passed and $750,615 in new public safety vehicles was added.

Improved Accounting

No matter how you fund new equipment, it's good business to account for inflation. “We depreciate vehicles over six to eight years, on a straight-line basis, and about three or four years ago, we began to add 2% every year,” said Tom Hammitte, chief of the fleet services division in Alexandria, Va. “So over eight years, that's 16%. Before we did that, we were constantly behind in our funding.”

Money is tight at the city of Alexandria, but equipment replacement budgets have edged up slowly. For fiscal years 2005, 2006, and 2007, the replacement figures are $2.75 million, about $3 million, and $3.133 million, respectively.

“We have cut back on some of our preventive maintenance budgets, and we hold vacant positions open for a few months to save money,” said Hammitte. “Our problem is that our fleet size has increased by 20% over the past six years, but we don't get any new technicians. Now we have a new city manager, so I have been working with my superiors to lobby for additional technicians.” The city's ratio of equipment pieces to technicians is 70:1, which is high for governmental fleets, Hammitte said.

Zero-Based Budgets

In Roanoke, Va., the equipment replacement budget has risen from about $2 million in fiscal year 2005 to $2.4 million in fiscal year 2006. Ken Bernard, the fleet manager, expects that fiscal year 2007's budget will jump another $300,000 or more. “We're pushing to get it to $3 million,” said Bernard. “We need more equipment.”

The city needs three new pieces of fire apparatus, which will cost about $1.5 million. The rest of the money will go for trash trucks and some dump trucks.

Still, Bernard is judicious with his spending. “We make sure we're doing the best we can for the least amount of money,” he said. “We try to run it like a business.

“We do zero-based budgeting,” said Bernard. “For whatever money you're going to request, you need to justify the entire number. You don't just take whatever number you used last year and add 3%.”

Back in Houston, Bowker said his revolving fund could be a model—like a pilot program—for the entire city. “You don't tell people to do something,” he said. “You roll it out, and pretty soon you're sitting on a tremendous amount of cash. You have to show people how it works.”

— Brown is a freelance writer in Des Plaines, Ill.