Ten Steps Forward for the Missouri State Vehicle Fleet
The State of Missouri has taken several steps forward in statewide fleet management
and travel practices since 2002. In a relatively short period of time, Missouri’s State
Fleet Management Program has led the charge to transform fleet practices and
spearheaded numerous travel cost reduction initiatives saving millions of taxpayer
dollars.
This white paper will describe the condition of the Missouri fleet ten years ago and
several key areas where Missouri has been successful in transforming fleet and travel
practices in the state.
A Glimpse into Fleet Practices in the Past
In 2001, then Missouri State Auditor, Claire McCaskill, issued a critical audit report on
the lack of oversight and accounting for state owned vehicles. Each agency operated
and managed their fleets independently without any statewide oversight or
management.
The Auditor’s report cited a number of serious issues including the lack of reliable and
comprehensive vehicle data, statewide policies, utilization standards, replacement
policies, and more. Following the audit report, the Missouri General Assembly formed a
committee to research the state of the fleet. Office of Administration staff worked
closely with the legislative committee to draft legislation that was subsequently passed
and approved, giving the Office of Administration, the state’s central support agency,
authority to take the necessary steps to resolve issues with the state fleet.
In 2002, with the enactment of the enabling legislation, the Office of Administration was
tasked with establishing the first state fleet management program in the state’s history.
Using existing resources, a state fleet manager was named and work began to create a
comprehensive fleet management program.
An interagency fleet management committee, the Fleet Management Advisory
Committee or FleetMac, was formed and proved to be instrumental in creating buy-in to
the new program.
Fast Forward to 2012
Ten years later, Missouri has an untraditional approach to fleet management. Missouri
is unique in that there are only two full time employees in the State Fleet Management
office; a small staff spearheading statewide fleet functions and travel initiatives while
agencies manage their fleets in conjunction with statewide policies. Upper
management support and close coordination between the State Fleet Manager and
agency fleet managers have been critical to the success of the program.
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Ten Key Success Areas
1) Established Statewide Fleet Policy
In 2002, a State Vehicle Policy1 was issued and set forth statewide fleet guidelines for
all agencies to follow. The policy governs the acquisition, assignment, use,
replacement, maintenance and record keeping for all state vehicles and serves as the
foundation for fleet management practices in Missouri state government.
Key tenants of the policy include:
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Vehicle usage logs required for each vehicle to include the following: name of
driver, dates, beginning and ending odometer, destination and purpose of use
State Fleet Manager must pre-approve all agency vehicle purchases. Additional
justification is required for fleet expansion, full size sedans, four wheel drive and
sport utility vehicles
Minimum replacement criteria of 120,000 miles, with certain exceptions
Vehicle assignment categories and minimum annual use standards for each
Vehicles assigned permanently to an individual are required to drive a minimum
of 15,000 miles
Vehicles assigned to a pool must average 15,000 miles
Vehicles assigned to a function (i.e. facility support vehicles) require an annual
justification for each vehicle driven less than 5,000 miles
Ban of all ‘reportable commuting’ in state vehicles
Appropriate use defined, vehicles can be used only for official business
Other standards concerning maintenance, fueling, safety and accident reporting
The State Vehicle Policy formed the basis for fleet practices in Missouri state
government and continues to guide agencies daily as they manage their fleets.
2) Instituted Fleet Information System
Prior to the beginning of the Missouri fleet program, each agency tracked vehicle data in
a myriad of separate spreadsheets and databases. Statewide fleet analysis was
impossible. One of the first tasks of the new program was to develop specifications for
a new fleet information system that would be used by all agencies to capture vehicle
data.
In 2003, one year after the program began; a web-based State Fleet Information
System was developed in-house saving hundreds of thousands of dollars in fleet
software acquisition expenses. Most state agencies utilize this system which assists
greatly in statewide fleet analysis.2
The fleet system is heavily integrated with state’s financial and HR systems as well as
two additional systems in the Missouri Department of Revenue that track driver’s
2
licenses and official license plates. A sub component of the fleet system automated
operations for a central maintenance facility. The fleet system is also heavily integrated
with a separate web-based, pool vehicle automated reservation system.
The fleet system provides for uniform tracking of key fleet data statistics such as the
number of active vehicles, fleet costs, utilization, preventative maintenance, driver’s
license validation and data repair order processing.
Some unique features of the system include:
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A custom computer program that runs daily to ensure that drivers of state vehicles
have a valid driver’s license. Driver’s data from the fleet system is compared to
license data from the Missouri Department of Revenue. Any changes in the status
of a driver’s license are emailed to the state agency for appropriate action. The
costs to operate the program are minimal. Outside vendors offering this service
charge for each MVR check, each time for each employee.
A license plate reconciliation program between the fleet system and the Missouri
Department of Revenue to compare the vehicle identification numbers and license
plates between each system. Exception reports are created and errors corrected.
This program reduces ‘fleet creep’ by preventing agencies from transferring plates to
another vehicle without following proper procedures.
3) Developed Annual Key Fleet and Travel Measures
Reliable data is critical in making informed decisions concerning the status of the state
vehicle fleet. With the data gathered from the state fleet system, the Missouri fleet
management program is able to report on key statistics each year in an annual report.
Key measures that are reported each year are listed below:
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Active licensed vehicle counts by agency
Number of vehicles per 100 employees
Fleet composition by vehicle category (sedans, trucks, SUV, etc.)
Cost per mile
Total business miles driven for all travel options by agency (state, rental and
personally owned vehicles)
Average miles driven based on assignment category (pool, individual or function)
Average miles driven based on the primary purpose of the vehicle (employee or
client transportation, specially equipped vehicles or task specific vehicles)
Average miles driven for all light-duty, passenger vehicles
Average miles driven for all medium and heavy-duty vehicles
Total expenditures for vehicle acquisition, fuel, maintenance and repair
Total mileage reimbursement paid to state employees
Fleet condition data which includes:
o Average and projected passenger vehicle odometer reading and age
o Number of vehicles at or exceeding minimum replacement eligibility
3
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State employee driver’s license data, specifically the number of employees that
changed from a valid status to an invalid status throughout the fiscal year
Vehicle rental contract utilization and savings
4) Established Mechanisms to Control Fleet Size
Vehicle Preapproval Process
To contain growth in the state fleet, all new or used passenger vehicles must be preapproved before purchase. Agencies must submit a vehicle pre-approval form to the
State Fleet Manager for review. The agency must also be compliant with the minimum
use standards outlined in the State Vehicle Policy before approval will be granted. The
vehicle pre-approval process is an effective tool in managing the size of the state
passenger vehicle fleet. Benefits of the process include:
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Review of appropriateness of vehicle types to be purchased, additional
justification required for full size sedans, four-wheel drive vehicles and sport
utility vehicles
Requests to increase the size of the fleet require additional justification
Agencies must identify specific vehicles to be surplused. This facilitates follow-up
reviews to ensure that agencies actually dispose of the vehicles.
Opportunity to review agency compliance with minimum utilization standards in
the State Vehicle Policy prior to approval
Quarterly Reconciliation of Official License Plate Data
A quarterly reconciliation program between the fleet system and the Missouri
Department of Revenue compares the Vehicle Identification Numbers and License
plates between each system. Exception reports are created and errors corrected. This
program has given credibility to the data maintained in the fleet system and prevents
agencies from holding onto additional vehicles without authorization. The State of
Missouri has reduced the number of discrepancies from 11.6% down to 1.6% since the
reconciliation program began.
License Plate Surrender Policy and License Plate Approval Process
Missouri state agencies are required to surrender any official vehicle license plates if
they will not be used within a 90 day time period. State agencies are also not allowed
to receive new official license plates from the Missouri Department of Revenue without
prior approval from the State Fleet Manager. This allows the fleet program to verify that
a fleet expansion was approved prior to new license plates being issued.
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5) Increased Travel in State-Owned Vehicles from 77% to 87%
For years, Missouri’s State Fleet Management Program has documented that the lowest
cost travel option for state employees on a per-mile basis is a state vehicle. A
concerted effort to direct business miles to
state-owned vehicles has been extremely
Travel Options
successful. As a result, over 87% of the 168
Cost Per Mile – FY 2011
million business miles traveled each year are
driven in state-owned vehicles, an increase
State Sedan
$.295
from 77% eight years ago. The table at the
Rental Vehicle
$.36
bottom of this page illustrates the percentage
of miles traveled between state, rental and
Mileage Reimbursement
$.37
personally owned vehicles for each fiscal year
(Full Rate)
between 2003 and 2011. To increase the use
of state-owned vehicles, the fleet program:
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Educated administration officials about the per mile cost of various travel options
Issued the State Vehicular Travel Policy3 that requires employees to utilize the
lowest cost travel option or they are only eligible for a reduced mileage
reimbursement rate
Instituted and required use of the Trip Optimizer4, a web-based, trip-cost
estimating calculator, to compare the cost of various travel options.
Implemented the Smart Lease Vehicle Program that transferred over 27 million
miles from high cost, mileage reimbursement, to lower cost state vehicles, saving
almost $5 million annually
Instituted a vehicle rental contract to supplement the state vehicle fleet at costs
typically lower than personal mileage reimbursement
Business Miles Driven by Travel Option
Fiscal
Year
FY 03
145,319,315
FY 04
149,439,637
77
%
78%
FY 05
FY 06
FY 07
FY 08
FY 09
FY 10
FY 11
149,627,062
151,025,722
151,256,475
158,400,815
155,216,423
155,449,293
146,556,140
77%
79%
80%
84%
85%
86%
87%
State Vehicles
Rental Vehicles
Mileage
Reimbursement5
TOTAL
-
0%
43,309,247
23
%
188,628,56
2
481,722
1,042,712
1,588,935
2,640,526
4,190,264
3,118,260
2,143,156
1,825,087
0%
1%
1%
1%
2%
2%
1%
1%
40,885,347
43,698,576
38,866,291
34,806,034
26,861,341
24,486,288
23,241,368
20,028,851
21%
22%
20%
18%
14%
13%
13%
12%
190,806,706
194,368,350
191,480,948
188,703,035
189,452,420
182,820,971
180,833,818
168,410,078
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6) Eliminated Commuting in State Vehicles
For years, ‘reportable commuting’ was allowed for certain state employees. Missouri
defines reportable commuting as those instances where an employee travels in an
official vehicle to and from work and the value of the commute is required to be reported
as an imputed wage for income tax purposes per IRS guidelines.
Within a few years of the inception of the Missouri fleet management program,
commuting was eliminated in over 200 vehicles by revising the State Vehicle Policy
guidelines. Previously, state agencies independently determined who was approved to
commute in state vehicles resulting in a lack of consistency between agencies. It was
commonplace for some Missouri officials to commute to and from work.
In 2008, after additional review, state officials found this practice to be in direct conflict
with a state statute6 that required vehicles to be utilized for official purposes only.
Reportable commuting was banned with another change to the State Vehicle Policy.
The reportable commuting ban has saved thousands of dollars of unnecessary vehicle
expenses over the years and eliminated instances where state vehicles could be
perceived as ‘perks.’ The State of Missouri utilized IRS guidelines and definitions and
developed policy to only allow ‘deminimus commuting’ or commuting in what the IRS
defines as a ‘qualified non-personal use’ vehicle.
Missouri is unique in this area because the ban applies to all employees subject to the
State Vehicle Policy. Many states assign vehicles to high level directors or elected
officials and allow for commuting.
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7) Created the Trip Optimizer
One of the statutory requirements for the fleet program was the
establishment of a travel cost estimating tool to assist
employees in making the most cost effective travel decisions for
each trip. What started as a Microsoft Excel spreadsheet
posted to a website eventually became a web-based tool that
Missouri state employees are required to utilize according to the State Vehicular Travel
Policy, SP-12.7
Actual state vehicle cost from the fleet system, rental contract rates, and the latest fuel
pricing is updated each week
to give employees the most
Enter Trip Information
accurate cost estimate
Total Round Trip Miles (Required):*
possible. Employees simply
300
enter trip information and the
Total Trip Days (Required):*
cost of all options is
2
displayed. Since its
exception, multiple states
Calculate
Clear
Send Email
have expressed interest in the
logic and formulas behind this
Trip Cost
tool. An abbreviated version
Per Mile
of the Trip Optimizer is
Travel Option
Total Cost
Cost
displayed here.
The results of the Trip
Optimizer calculations can be
printed or emailed for
expense account
documentation. If a state
vehicle or rental vehicle is
available and less costly than
mileage reimbursement, the
employee’s claim on their
expense account is limited to
a reduced employee mileage
reimbursement rate or the
projected cost of the rental
vehicle.
Enterprise Rental
Mid-Size Rate - Fuel Included:
$108.02
$0.3601
Hertz Rental
Mid-Size Rate - Fuel Included:
$106.60
$0.3553
State Vehicle
Mid-Size Sedan:
$89.67
$0.2989
Mileage Reimbursement
(Standard Rate):
$111.00
$0.3700
Lowest Cost:
State Vehicle
Next Lowest Cost:
Hertz Rental
Savings Information
Percentage Difference:
18.88%
Cost Savings Amount:
$16.93
State Vehicle Utilization Review
Average Miles/Day:
150.00
Utilization Level:
Satisfactory
The policy requirement to use
the Trip Optimizer has been essential in our effort to educate agencies and employees
on the real cost of various travel options.
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8) Smart Lease Vehicle Program
The Missouri State Fleet Management program began implementation of the Smart
Lease Vehicle Program in 2006 to generate immediate cost savings within agency
operating budgets by transferring business miles for certain employees from mileage
reimbursement to a lower cost, lease-purchased vehicle. The statewide Master Lease
Contract is utilized to lease-purchase a vehicle at low, tax-exempt interest rates.
Agencies save money by directing existing core appropriations to pay the capital lease
and operating costs of the Smart Lease vehicle rather than pay mileage reimbursement.
Agencies own the vehicle after the final payment, generating even more savings if they
continue to operate the vehicle. In 2007, an interagency team was awarded the
Missouri Governor’s Award for Quality & Productivity for implementing the program.
Prior to the implementation of the Smart Lease Vehicle Program, some agencies such
as the Department of Social Services did not have a sufficient number of state vehicles
and had little funds to replace existing vehicles let alone purchase additional vehicles.
In one instance, an employee was reimbursed for almost 42,000 miles at an annual cost
of $15,700. Overall, in FY 2006, over 140 employees across state government were
reimbursed in excess of 15,000 miles each year. The Department of Social Services
alone spent over $5 million in mileage reimbursement expenditures annually which was
approximately one-third of the state total for mileage reimbursement.
To date, over 430 vehicles have been added to agency fleets since 2007 transferring
over 27 million miles from employee mileage reimbursement to state vehicles resulting
in savings of $4.8 million. In FY 2011, only 13 employees were reimbursed in excess of
15,000 miles, a significant reduction since the inception of the Smart Lease Vehicle
Program.
Smart Lease Vehicle Program Savings to Date
20078
2008
2009
Averag
e Cost
Per Mile
$0.296
$0.245
$0.217
2010
$0.231
$0.408
$0.173
2011
2012
YTD9
Total
$0.253
$0.266
$0.370
$0.370
$0.114
$0.100
Fiscal
Year
Reimburseme
nt Rate
Savings
Per Mile
Annual
Savings
$0.415
$0.455
$0.475
$0.096
$0.210
$0.254
$53,327.46
$865,918.21
$1,441,760.1
3
$1,090,979.5
4
$920,715.12
$410,574.97
295,236
4,019,683
5,630,669
$4,783,275.4
4
27,740,881
8
Miles
Transferred
5,911,396
7,896,895
3,987,002
9) Reduced Mileage Reimbursement Expenditures
Prior to Fleet Management’s efforts, mileage reimbursement expenditures increased
each year as the state’s reimbursement rate was tied to the federal reimbursement rate.
With a focused effort to reduce these expenditures, there has been a steady decline in
total reimbursement for personally owned vehicles, dropping 51% in FY 2011 from the
all time high in FY 2005. In FY 2005, Missouri reimbursed employees over 43.7 million
miles at a cost of over $15 million. In FY 2011, Missouri reimbursed only 20 million
miles at a cost of $7.4 million, a substantial reduction from six years ago.
The following initiatives have all played a factor in reducing employee mileage
reimbursement expenditures:
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State of Missouri
State Employee Mileage Reimbursement Data
50
$20
40
$15
30
$10
20
$5
10
0
$0
FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11
Miles Reimbursed
9
Expenditures
Expenditures (Millions)
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Issued a statewide travel policy10 that requires employees to utilize the lowest
cost travel option or only be eligible for a reduced mileage reimbursement rate
Instituted and required use of a Trip Optimizer 11, a web-based, trip-cost
estimating calculator, to compare the cost of various travel options
Implemented the Smart Lease Vehicle Program that transferred over 27 million
miles from higher cost mileage reimbursement to lower cost state vehicles,
saving almost $5 million annually
Instituted a vehicle rental contract to supplement the state vehicle fleet at costs
typically lower that personal mileage reimbursement
Reduced employee mileage reimbursement rates in FY 2010 and FY 2011 to
generate additional savings.
Miles Reimbursed (Millions)
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10) Spearheaded Recent Initiatives to Reduce Overall State Travel Expenses
In the spring of 2010 amidst another round of state budget cuts, several fleet and travel
initiatives were announced, including:
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Fleet reduction
10% business mile reduction
Reduction of the standard mileage reimbursement rate to $.37 per mile
Consolidation of pool vehicles in the state capital
Fleet Reduction
To date, 530 vehicles have been sold resulting in over $1.3 million in one-time sales
proceeds.
Business Mile Reduction
For FY 2011, state agencies were asked to reduce total business miles driven by 10%
compared to FY 2009 numbers. Overall, business miles dropped 12.3% for executive
branch agencies reporting to the governor.
Travel Savings
An estimated $6.2 million was saved in as a result of the reductions in business miles
driven and mileage reimbursement12. Savings for mileage reimbursement are two-fold.
Fewer miles were reimbursed and the mileage reimbursement rate for travel in a
personally owned vehicle was reduced by a total of 13 cents per mile over the course of
FY 2010.
For FY 2011, mileage reimbursement expenditures declined by $3.64 million13, a 30%
reduction in expenditures compared to FY 2010 due to the combination of the lower
mileage reimbursement rate and 12% fewer miles reimbursed between FY 2010 & FY
2011.
Pool Consolidation
Pool vehicles assigned to locations in the capital city have been consolidated. Nine
agencies and almost 200 vehicles have been brought into a centrally managed pool.
Employees now have access to a larger pool of vehicles and the same amount of travel
can be accomplished with fewer vehicles.
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Conclusion
The Missouri fleet management program has established sound fleet management
practices, clearly defined policies and objectives, controls to manage the size of the
fleet, and key metrics to monitor fleet utilization and efficiency. Numerous initiatives to
reduce the cost of travel have been instituted and have generated substantial savings.
Achieving this success required clear programmatic vision, top management support,
comprehensive data collection and analysis and strong policy development and
implementation. Agency buy-in was obtained through effective communication and
collaboration from the inception of the program and was critical to the realization of fleet
management goals.
1
http://oa.mo.gov/co/policies/State_Vehicle_Policy_04.pdf
The Departments of Transportation, Conservation and the Missouri State Highway Patrol maintain their own fleet
information systems but regularly report key fleet data to the State Fleet Management Program.
3
http://oa.mo.gov/co/policies/sp12vehicular.pdf
4
http://168.166.15.142/Default.aspx
5
State employees only.
2
6
301.260.1 RSMo
7
http://oa.mo.gov/co/policies/sp12vehicular.pdf
partial year
9
July – December 2011
10
http://oa.mo.gov/co/policies/sp12vehicular.pdf
11
http://168.166.15.142/Default.aspx
12
State vehicles: $2,490,082.84, Rental Vehicles: $114,504.84, Mileage reimbursement: $ $3,646,389. For state
and rental vehicles, the savings were calculated by multiplying the cost per mile for each travel option by the
difference in miles between FY 2010 and FY 2011.
13
Included in the $6.2 million savings in the paragraph above.
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11