In these days of rising costs for everything from fuel to new vehicles, fleet managers are looking high and low for new ways to meet their budgets.

"You're asked to do more with less or the same budget," said Sam Lamerato, superintendent of Fleet Maintenance in Troy, Mich., a city of 83,000 people. "That's our biggest challenge. Rising fuel and oil costs are tearing up cities' budgets right now."

By talking with fleet managers in three cities across the country, PUBLIC WORKS magazine found a variety of best practices that are helping these managers meet their budget challenges head-on. In addition to Lamerato, we interviewed Charlie Caudill, fleet manager in Yuma, Ariz, (population 89,300), and David Higgins, director of fleet maintenance in Boston (population 600,000). Following are some of their best practices:

In-sourcing. The maintenance shops in Troy and Yuma take in vehicle repair and maintenance work from surrounding communities, which pay time and materials for services performed. The additional revenue helps Troy and Yuma defray overhead costs, and the other communities get the services for reasonable rates.

Active technician training. Five years ago, the city of Troy had no technicians certified by Automotive Service Excellence (ASE). Then the city offered an incentive of $100 more per month to technicians who gained ASE master certification. Today, 14 of the 15 technicians in Troy's Fleet Maintenance division have ASE master certifications, and three have dual certifications.

Aggressive vehicle replacement programs. "Our average vehicle is six and a half years old," said Yuma's Caudill. "That keeps our costs down because a younger fleet is less expensive to maintain."

Advanced use of computerized fleet management systems. Boston's Central Fleet Maintenance (CFM) Division uses Fleet Focus (FF) software, now serviced by Maximus, Reston, Va., to manage the maintenance information for some 1500 pieces of equipment. "FF generates all of our repair orders, tracks all parts and labor consumption and subcontracted work, and tracks our mechanics' productivity in bill-able hours," said Higgins.

In-Sourcing Revenue

In an exclusive survey of its readers, PUBLIC WORKS magazine found that most departments (74%) do not use in-sourcing—doing fleet repair or maintenance work for outside agencies or departments—as a form of revenue. Of those who do in-sourcing, 63% of respondents to this July survey indicated that they bring in less than $50,000 from this work.

The fleet maintenance department at Troy took in more than $170,000 of in-sourcing revenue for the year ending June 30, about $10,000 more than the prior year. The shop is fitting up sedans to make them police cars for neighboring Clawson, Mich. "We install the lights, radios and emergency equipment, push bumpers, shotgun racks, and more," said Lamerato. "And we also do that on a time-and-material basis for the Troy Police Department, so that's a revenue stream coming from the same city."

What's more, Troy maintains all fire apparatus for Clawson. And last winter, Troy stepped in when the automatic transmission on one of Clawson's snow plow trucks broke down. "The soonest a local repair shop could fix it was a week or 10 days," said Lamerato. "We fixed it and had it back in their hands in 48 hours."

The Troy shop also has worked for Huntington Woods, Mich., another Detroit suburb, and for Troy's private Medi-Go Plus, which runs four vans that deliver senior citizens to doctor's visits. Troy's shop runs a second shift that starts at 3:30 p.m., so the vans can be repaired overnight and are ready for use the following day, Lamerato said. "Our guys understand how important those doctor's visits are to the citizens," he said. "And since we took them over, we have substantially improved the condition of those vans.

Lamerato plans to do more in-sourcing. "Our reputation is becoming well known," he said. "We're in negotiations to do additional in-sourcing for neighboring communities."

In Yuma, Caudill does the same thing. "We're doing nearly $100,000 a year in work for outside agencies," he said. "That money helps keep the cost down for our existing customers." The city's Fleet Services division of the Public Works Department employs 10 full-time mechanics who maintain 708 vehicles and pieces of equipment, including 12 trash packers.

Fleet Services' operating budget is slightly more than $2 million, not including equipment replacement, so revenues from in-sourcing represent less than 5%. Still, said Caudill, "It pays the light bills, and helps us balance the budget."

The Yuma shop works for Somerton and San Luis, two neighboring communities, and for the local Humane Society, which operates 17 pickup trucks. Additional work comes in from the Yuma Metropolitan Planning Organization; the Yuma Crossing Park; the Yuma Territorial Prison, which is now a museum; and the local Cocopah Indian Nation.

Moreover, said Caudill, "We have a whole bevy of fuel contracts, and we have a markup on fuel." Among others, Fleet Services provides fuel for the Housing Authority of the city of Yuma and for a nine-bus fleet run by Yuma County Area Transit.

These two cities are the exception, however. According to survey respondents, 85% reported that their fleet maintenance department had no plans to add in-sourcing as a means to gain more revenue.

Managing PM

All three cities have a rigorous preventive maintenance (PM) program. Boston's CFM division calls in vehicles based on a combination of elapsed time and fuel usage. The fuel system is connected to a Gasboy computer. Higgins set up a spreadsheet that shows quarterly fuel consumption, and vehicles are called in accordingly. "For everybody's fleet that we manage, I have an e-mail list," said Higgins. "Halfway through June, for example, I notify the fleet managers that they have one, two, or 12 vehicles that need to be brought in for preventive maintenance or a state inspection."

CFM's system is “semi-paperless.” Mechanics are assigned jobs by a shop foreman, and they then log onto that repair order on FF software. When the mechanic completes the job, he goes back to the shop foreman to get his next job. A service writer completes the paperwork for the job just finished.

“We have toyed with the idea of a paperless shop,” said Higgins. “But I have seen cases where the paperless shop is a horrific nightmare.” In a paperless shop, vehicles are bar coded, and the service writer scans in the bar code. The job is assigned to a technician, who reads work to do from a screen. “I've not seen a paperless system that works that well,” said Higgins. “The mechanic will end up writing down things that he needs to remember. I'm not a fan of the paperless shop.”

In Troy, all specialty equipment such as salt trucks, lawn mowers, and street sweepers get an exhaustive preseason inspection. “Our preseason inspection was put together by all the technicians as a team, with management input,” said Lamerato. “That inspection is bulletproof. For trucks, for example, we have a checklist with 40 to 45 specific inspections—drive train, engine, lighting system, brakes, frame, steering—the works. One or more technicians complete the inspection, and it's reviewed by the shop supervisor.”

For vehicle information management, Troy uses FASTER software by CCG Systems Inc., Norfolk, Va. Fleet maintenance reviews PM schedules at the beginning of the month and at mid-month. “The last few months we've been at 100% compliance in getting our PMs done,” said Lamerato. “That is the reason our vehicles are on the road, not in the shop.

“I would say that when a vehicle goes down, 80% of the time it's back up within 24 hours,” he added. “We try to stick to 80% to 85% back up in 24 hours. And right now we're at 97% vehicle availability, maybe closer to 98%.” Lamerato said the city's two Tymco street sweepers have missed fewer than five days of work in the past five years.

Lamerato said Troy has switched most vehicles to synthetic oil, not only for the engine, but for transmissions and rear axles as well. He said it extends oil-change intervals, lowers the cost of oil, and increases fuel economy. “And it's lowered the operating temperatures of our transmissions,” said Lamerato. “Heat is the number one enemy of a transmission.

“Your transmission oil is cooled by the radiator, and if the transmission oil is running cooler, it puts less strain on the cooling system, so the engine will run cooler as well,” said Lamerato.

Growth In Yuma

For its size, Yuma is one of the fastest-growing cities in the country, with the population increasing 36% between 1990 and 2000, Caudill said. Accordingly, the city's equipment replacement fund is growing to $2.9 million in fiscal year 2005–2006, up from $2.25 million in fiscal year 2004–2005. “That's aggressive,” said Caudill. “It allows us to maintain a younger fleet.”

The replacement fund is managed by an Equipment Replacement Committee composed of Caudill from Fleet Services, and members from each user department, such as streets, fire, and police. The group meets twice a year to review new equipment needs.

User departments pay a “rental charge” for equipment and vehicles. Whenever a vehicle is put into the fleet, it's given an amortized life. The rental charge includes a flat depreciation plus a cost of money that allows the city to pay the increased cost of vehicles, said Caudill. “An inflation factor is added on, based on the type of vehicle it is,” he said. “The cost of steel has gone up rapidly. We've had to redo a lot of numbers.”

Equipment and vehicles are examined for replacement two years earlier than the life expectancy. “We look at them two years out,” said Caudill. “We look at the condition, the life in miles, the repair expenses to date, and more.”

Looking at replacement needs early gives Yuma the chamce to “push a vehicle out by another year, or pull it back, replace it early,” said Caudill. “The equipment replacement fund is a living, breathing fund. We try to identify any vehicles that may be money pits.”

Yuma has 22 different accounts that contribute to the Equipment Replacement Fund. The largest share, 63%, comes from the general fund, which is sales tax dollars. Money must stay within each of the 22 accounts to be spent. But the general fund can shift money among various needs, for example, from police vehicles to fire apparatus or parks and recreation.

Before Yuma established an equipment replacement fund, equipment was 12 to 20 years old and deteriorating, Caudill said. Prior to 1985, the city approved a $2.5 million to $3 million bond issue to buy equipment. “We bought all new sedans for the police, all new refuse trucks, and went to the side loader refuse business,” said Caudill.

Well-Trained People

Training technicians is especially important to Lamerato. He seeks to schedule 40 hours of training each year for every technician. “I bring in trainers to our facility, and we invite surrounding communities to join us,” said Lamerato. “We have training on brakes, on suspensions, on wheel chair lifts, and more—and I can send more people if it's onsite here.”

As co-chair of education for the Michigan Chapter of the American Public Works Association, Lamerato heads statewide technician training efforts. Recently he held a wide-ranging training session at Shanty Creek Resort in Bellaire, Mich., where 122 people gathered to learn about engine emissions, brake linings, and drivelines. Speakers included officials from Caterpillar, Dana Corp., and CCG Systems.

Boston's CFM provides technician training on an as-needed basis. “When we hire them we have a record of who's been trained on what,” said Higgins. “So we know who needs a certain kind of training, whether it's hydraulics or engine ignition or whatever. We try to get everybody trained.”

And they are. Boston's CFM shop has been appointed to do in-house warranty work for General Motors. CFM has established a commercial driver's license (CDL) school for city employees and requires all technicians to have a CDL.

A public fleet needs to be managed much like one in the private sector—like a business. And as more cities are learning, nothing helps the bottom line like a little additional revenue from outside sources.

Brown is a freelance writer in Des Plaines, III.

Forming a fleet maintenance department

Centralized fleet maintenance is fairly new here in Boston,” said David Higgins, director of fleet maintenance for the city's Central Fleet Maintenance (CFM) division of the Department of Public Works.

In the late 1990s, city administrators made the decision to consolidate the fleet maintenance function from several departments into one, and in 1997 hired Higgins away from a fleet position in Concord, N.H., to head CFM. “Yours truly was appointed chief cook and bottle washer,” said Higgins. “We are the dealer of vehicles and trucks to the city, but we don't handle fire and police equipment.

“From 1997 to today we have achieved a number of milestones,” he said. “For one, we have gone to a totally computerized system, called Fleet Focus by Maximus, that tracks everything from repair orders to parts and does labor statistics.”

One of Higgins' first major tasks was to negotiate “impact bargaining,” or changes in job descriptions, with the labor unions involved. “I tried to instill in them that it would be us working together, not them working for me,” said Higgins.

The impact bargaining phase took nine months. “I would go down and talk to the guys in the shop myself,” said Higgins. “Being an old wrench-turner myself, I found that was more productive than just sending out computer print-outs.”

A big was to get people accustomed to providing service to other departments. “Some highly capable people had only been responsible for their own departments,” said Higgins. ‘When I communicated to them that they're a service entity, they'd look at me like I'd fallen off another planet.”

Prior to the consolidation, there was no electronic tracking of equipment. “It was done on an individual basis, by each department,” said Higgins.

Higgins had met the founder of a company called Prototype, which wrote a vehicle maintenance information system called EMS. That led to the software called Fleet Focus, which Higgins uses today. “I liked it,” he said. “It was one of the few types of that software that had excellent customer support.”

Equipment replacement was another problem—and Higgins has solved it. “When I took charge in 1997, the aging fleet needed to be upgraded,” said Higgins. Prior to Higgins' appointment, the city had been seeking to upgrade trucks with a “glider kit” program. With that, all truck components are replaced except the driveline. The truck gets a new body, cab, electrical system, and frame rails.

The program had some concerns. “We gradually weaned the city off that program because we experienced some problems with trucks that had glider kits,” said Higgins. For one thing, the cost of a glider kit approached the cost of a new truck. For another, the state considered glider kit trucks as new, and would have required the older engines to meet the emission standards for the year of the glider kit. That would have driven the cost to untenable levels, according to Higgins.