Kelly Reagan
City of Columbus
Administrator
Division of Fleet Management
The Keys to Developing a Replacement Standard
Kelly Reagan, Fleet Administrator
City of Columbus
Division of Fleet Management
Columbus Fleet Management- We utilize all the latest technology
City of Columbus Statistics
•
Fleet Mgmt. services approximately 5600 pieces
of vehicles/equipment
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–
•
•
•
•
3000 on-road (cars, trucks, SUVs, etc.)
2600 off-road (construction equipment, tractors, mowers, etc.)
Primary customers include Refuse, Police, Fire,
Transportation, Development and Rec and Parks
Approximately $32 million budget
Obtained ASE Blue Seal in 2008-2012 – largest
municipality in US and only city in Ohio to obtain
Ranked as 3rd Best Fleet and #1 Greenest Fleet in
North America in 2011
How was Columbus Replacement Standard
Developed?
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•
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Industry standards
Consultation with City divisions and management (i.e. Finance
Department)
Internal Data
Realistic goals
Lesson: Involve management in developing replacement
standard- don’t bite the hand that feeds you
City of Columbus Replacement Standard
Vehicle type
Administrative cars
(non-patrol)/station
wagons
Marked patrol cars
Unmarked patrol cars
Motorcycles
Vans/pickups
Light duty trucks
Medium duty trucks
Heavy duty trucks
Refuse trucks:
Automated Side
Loader
Front Box Loader
Rear Loader
Manual Side Loader
Compactor Truck
Knuckle-boom
Truck
Flatbed
Fire Apparatus:
Engines
Ladders
Rescues
Medics
Sweepers
Large and specialty
equip.
Useful Life
(years)
Front Line
Useful Life
(years)
Reserve
Miles
7
N/A
100,000
2
7
7
8
8
8
10
2
N/A
N/A
N/A
N/A
N/A
N/A
150,000
100,000
50,000
125,000
125,000
100,000
100,000
6
N/A
N/A
8
10
8
8
8
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
10
N/A
N/A
8
12
8
4
5
2
3
2
3
2
Review on individual basis
N/A
N/A
N/A
N/A
N/A
What Goes First
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Three criteria used to determine order of
replacement:
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Underutilized report generated every 2 years
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Age- over 10 years or useful life
Maintenance history
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Do maintenance costs exceed acquisition cost?
100,000+ miles
Discussion with divisions
Justification reporting
Typically leads to 50-100 units being decommissioned or
reassigned
GPS data will be used in the future to drive
replacement needs
Use Data to Drive Decisions
• Use data in budget discussions with both
division heads and Finance Department
• Data should drive the vehicle replacement
budget each year
– Conduct lifecycle cost analysis
Lesson: Use resources to take control
Lifecycle costs
• Fleet replacement schedule should minimize the
lifecycle cost of the fleet
• Lifecycle costs consist of:
– Capital, i.e. debt service
– Operating costs- maintenance, fuel, etc.
• Longer replacement schedules will lower annual
debt service costs, but will increase annual
maintenance costs
• Need a lifecycle cost analysis
Lifecycle Cost Analysis
• Lifecycle cost analysis identifies the minimum of total
costs by analyzing:
– the relationship between vehicle age/usage
– capital costs
– operating costs
• Minimum lifecycle cost is found at the lowest point on
the total cost curve
Lifecycle Cost Analysis
Lifecycle Cost Analysis
Operating
Costs
Capital
Vehicle Age/Usage
Total
Lifecycle Cost Analysis: Fire Engines
Example: Fire Engines
• The analysis suggests that fire engines should be
replaced every ten years on average. This
assumes:
– Purchase price of $400K financed at 4.5% interest
– Depreciation rate of 22.3%/year
– Lifetime maintenance costs should be less than 50% of
acquisition costs
– Minimum lifecycle cost is estimated at $70K/year: $46.5K in debt
service and $23.5K in maintenance
Columbus progress through the years
Total Fire vehicles at or below replacement age
90%
79%
80%
70%
57%
60%
50%
40%
30%
20%
10%
0%
2008
2011
Total vehicles at or below recommended replacement age
Costs of Delayed Fleet Replacement
• Delaying fleet replacement may yield savings in the capital budget but
the savings may be more than offset by increased maintenance costs
• Example: Fire apparatus exceeding both age and maintenance cost
replacement criteria
• Net loss of approximately $100K/year
Apparatus
15 Fire Engines
4 Platforms
32 Medics
TOTALS
Added Annual
Maintenance Costs
$245,832
$79,887
$122,369
$448,089
Debt Service
Annual Savings
$181,054
$55,367
$108,890
$345,311
Excess Costs from
Delayed Replacement
$64,778
$24,520
$13,479
$102,778
The Cost of Lengthened Replacement
Cycles
• According to Fleet Management’s 2012 annual survey regarding
vehicle operating costs, the consequence of lengthened
replacement cycles is an increase in unexpected and sometimes
costly repairs
• Last year, the cost of unscheduled vehicle repairs rose 10.2%
Vehicle Age
• Nearly double the rate of increase reported for the 2012 survey
Lesson: Short term rewards are not
worth the long term costs
Summary
• Include both customers and management in
development of replacement standard
– Involve Finance Department
• Use data to drive decisions
– Use your resources to take control of your replacement standard
• Conduct a lifecycle analysis and determine costs
• Do not delay fleet replacement- be able to
demonstrate costs of delay
– Short term savings are not worth long term costs
Questions?
Kelly Reagan
(614) 645-6254
kwreagan@columbus.gov