Vehicle Replacement Cycles - FASTER Conference for Fleet & IT

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Vehicle Replacement Cycles
Sam P. Lamerato, CPFP
Superintendent of Fleet
City of Troy, MI
Vehicle Replacement Derailed
 Tight Budgets
 Furlough Days
 Reduced Staff
 Deferment of Vehicle Replacement
 Dealing with City Management
 Attending City Council Meetings
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?
Budget 2010-11
10/12/2010
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
1
C
Police Command 4X4
$28,000
$28,000
4
2
D
Fire Department 4X4
$28,000
$56,000
5
2
E
Staff Vehicles Hybrid
$25,500
$51,000
6
2
F
Cargo Vans
$18,000
$36,000
7
4
G
Pickup Trucks
$17,000
$68,000
8
2
H
Pickup Trucks 4X4 W/Plows
$25,000
$50,000
9
4
I
2 1/2Yd. Dump Trucks 4X4 W/Plows
$30,000
$120,000
10
1
J
Catch Basin Cleaner/Sewer Jet
$325,000
$325,000
11
1
K
Crew Truck W/Air Compressor
$100,000
$100,000
12
1
L
5-7 Yard Dump Truck Stainless
$140,000
$140,000
$170,000
$170,000
W-Snow Plow, Salt Spreader & Float
13
1
M
10-12 Yard Dump Truck Stainless
W-Snow Plow, Salt Spreader & Float
14
1
N
Skid Steer Loader
$32,000
$32,000
15
1
O
72" Riding Mowers Zero Turn
$17,000
$17,000
$1,553,000
SECTION B - ADDITIONAL UNITS
ITEM
QTY.
REQUESTED
DESCRIPTION
BY
1
1
Fleet
EST. COST
Tractor W/Snowblower (sidewalks)
$18,000
$18,000
SECTION C - EQUIPMENT TO BE REPLACED
ITEM
EQUIP. #
DESCRIPTION
A
B
Police Patrol Cars @ $3,500 each
10
$35,000
Detective Cars @ $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
172
1999 Plymouth Breeze
$2,000
173
1999 Plymouth Breeze
$2,000
247
2000 Chevrolet Cargo Van
$2,500
256
2000 Chevrolet Cargo Van
$2,500
236
2002 Dodge Pickup
$3,000
242
2002 Dodge Pickup
$3,000
246
2002 Dodge Pickup
$3,000
262
2002 Dodge Pickup
$3,000
202
1998 Dodge Pickup 4X4
$3,500
266
2002 Dodge Pickup 4X4 W/Plow
$5,000
400
2001 Dodge 21/2 Yd. Dump Truck 4X4
$5,500
401
2001 Dodge 21/2 Yd. Dump Truck 4X4
$5,500
406
2001 Dodge 21/2 Yd. Dump Truck 4X4
$5,500
411
2001 Dodge 21/2 Yd. Dump Truck 4X4
$5,500
J
414
2002 Vactor Catch Basin/Sewer Jet
K
421
1991 GMC Crew Truck W/Compressor
$5,000
L
439
1994 GMC 5-7 Yard Dump W/Plow
$5,000
M
435
1997 Ford 10-12 Yard Dump W/Plow
$8,000
N
470
1997 John Deere Skid Steer Loader
$6,000
O
622
1999 John Deere 72" Mower
$2,000
E
F
G
H
I
$125,000
$273,500
Furlough Days & Reduced Staff
 Same Equipment Fewer Repair Hours (96 per Tech)
 Same Equipment Fewer Techs
 Same Equipment Same Repair Dollars
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.
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
Dealing with City Management
 Vehicle Replacement Plan
 Life Cycle Cost Analysis – Best Practices
 Project Long-Term Replacement
 Extended Warranties
(5 – Year Plan)
(5 years 100,000 Miles – Power Train)
 Advanced Design & Technologies
 Lower Cost per Mile
 Reduced Downtime
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
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 lifecycle cost analysis technique (such as equivalent
annual costs) to calculate the least costly life-cycle
per class of vehicle.
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
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
ECONOMIC REALITY OF VEHICLE
REPLACEMENT
COST
TOTAL
OPERATING
CAPITAL
*
*
TIME/USAGE
Quality of Service
 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
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 1 - 5 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
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
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)
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.
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!!!
Questions
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