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How to Stretch Your Fleet Dollar

Agencies nationwide are looking for ways to save money on their vehicles. Some have found them.

April 01, 2008  |  by Mike Scott

Managing the rising costs of police fleets is a challenge that all law enforcement agencies are facing. Fortunately, there are technologies available to help fleet managers better manage these costs and save their departments thousands of dollars annually.

Fuel Management

The San Diego Police Department has used an automated fuel management information system for the past seven years that functions as a passive fueling control. It's an automated process, so there is no interaction between driver and system operator. The system recognizes and records information on the fleet vehicle, authorizes that information, and downloads it for tracking, says Fleet Administrator John Alley.

"It helps us manage updated status for fuel efficiency, engine hours, engine starts, and more," Alley says. "It truly helps us to direct costs down to the penny."

Rubber and the Road

Tires are generally the second largest operating cost for fleets behind fuel. And despite the negative effect of unchecked tire costs on the bottom line, not all fleets exercise control over their tire cost per mile.

That's the reason tire management systems have been developed for a variety of customers, including public and private fleets. Such systems can alert drivers of a potential tire problem, which can increase driver safety, reduce manual labor, and increase tire life.

The federal Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act was passed in November 2006 and mandated that all newly manufactured light vehicles be equipped with tire pressure monitoring systems. As such, the ability to use PDAs or other electronic devices to sync information on vehicles within a fleet for increased accessibility will be important for fleet managers.

A Canadian company called TireStamp has a solution that lets authorized fleet personnel view real-time tire data and monitor tire performance. Utilizing embedded wireless wheel sensors, TireStamp's TireVigil collects and communicates relevant data using internal servers. Onboard telematics help facilitate the collection and analysis of tire usage data over actual driving conditions.

"The purpose is to give drivers and managers tire data to help them better manage their tire assets, anytime and anywhere," says TireStamp President Peggy Fisher.

Internal Service Fund

The San Diego Police Department runs about 1,600 pieces of equipment, 550 of which are marked patrol units, mainly Crown Victorias. Alley and his staff of 80 fleet employees utilize eight shops around the city to stay on top of vehicle servicing.

"We run bi-weekly, monthly, and annual cost reports on each vehicle and each type of vehicle," Alley says. Alley and his staff carefully analyze and track these reports to look for trends with certain vehicles, and to know when a specific vehicle needs to be pulled for PM or more extensive service work.

Recently San Diego combined its police and fire departments under one management organization and virtually all of the city's public safety vehicles are managed by a process of internal service fund replacement. The city tracks vehicle usage based upon assignment fees rather than relying on the city council to allocate the money each year.

"We leverage the internal service fund to help replace overaged and overserviced vehicles," Alley says. "The mayor refers to it as a process reengineering effort."

Unscheduled maintenance and work orders, fuel management information, budgets, road calls, and more are managed in this way in a best practices approach. The combined organization that manages all department fleet vehicles has adopted an internal service fund management process.

"It is a major step for the city to go away from the general fund concept to paying into a fund and having that money fenced so after the life cycle money would be available as needed," Alley says.

Loaner Cars

One of the logistical problems faced by the Daytona Beach (Fla.) Police Department was getting officers to bring in their fleet vehicles for maintenance at scheduled intervals because that would leave those officers without a vehicle for a day or more. This issue was resolved by establishing a loaner fleet comprised of older yet still high-performing vehicles that can be picked up at any maintenance facility in the city, according to Fleet Manager Jon Crull.

The measurable cost savings realized is evident in the fact that vehicles are now brought into maintenance on schedule so that potential issues are addressed often before they cost the department more money and time in parts and critical labor. The department's vehicles are managed by hours, rather than on the basis of mileage, and are generally brought in for maintenance every 250 hours.

"It's a [seamless] process for our officers because it is important for us to maintain our servicing scheduled for each vehicle," Crull says.

Daytona Beach also uses an outside vendor to handle the refurbishing of vehicles or expensive parts as needed in specific instances. This can save the department hundreds and even thousands of dollars per job.

The San Diego PD has already leveraged money in the city's internal service fund, allowing it to make large cash purchases and to reduce overall operations costs. The city had normally been purchasing more than 400 new fleet vehicles per year. However, in 2008, Alley expects the city will be purchasing or leasing more than 900 vehicles.

"Over the next five years we are confident that we will reduce operations budget (repair parts, maintenance man hours, overtime, and fuel) by 10 percent," Alley says. "In the long term we believe we can reduce staffing or absorb additional equipment without needing to increase staffing."

This maintenance program will be able to pay for additional programs and realize an annual savings of $5 million, Alley estimates.

Tax-Free Diesel

Daytona Beach is researching a potential program that would allow the department to use red dye diesel with all its Crown Victorias and Impalas, Crull says. The savings there would be in gas taxes.

Currently, the department spends approximately 30 cents per gallon on vehicle road use for gas. While eliminating the taxes would save a penny or less per gallon, those savings would significantly add up.

Going Hybrid

Already Daytona Beach police have purchased hybrid vehicles for the last five years, although Crull says the small number of hybrid vehicles in the department fleet are not cost-efficient.

"The hybrid often won't pay for itself during the lifetime of the vehicle, but it is part of our green initiative," Crull says. "For our few electric fleet vehicles, we have purchased high-speed chargers that allow us to efficiently use those vehicles during an entire shift, and they have worked pretty well in saving fuel costs."

Some police departments could save thousands of dollars per year from tax credits on selected hybrid vehicles. Yet few fleet managers are even aware of such options.

Hybrid vehicles purchased or placed into service after December 31, 2005, may be eligible for a federal income tax credit of up to $3,400 for individual automobile owners and businesses. Section 1341 of the Energy Policy Act (EPACT) of 2005 provides this federal tax credit for qualified light-duty vehicles and trucks. The credit is based on fuel economy and the vehicle's potential for fuel conservation.

Tax savings on hybrids can be elusive. Credit amounts begin to phase out for a given manufacturer once it has sold more than 60,000 eligible vehicles. So don't plan on getting a tax break on a Toyota. And the process hasn't always proven to be a seamless one for police departments that have claimed the credits because the credits actually go to automotive dealers. The theory is that those dealers would pass the savings down to public fleets, says Pat O'Connor, legislative counsel for the National Association of Fleet Administrators (NAFA) in Washington, D.C.

 

The EPACT 2005 law was written so that dealers selling the vehicles could take this credit if they inform the government of the public entity that they are selling the vehicle to. If dealers are planning on taking advantage of this credit, they must, by law, inform public agencies of their intent, which would then open the door for negotiated discounts.

 

 

"For [police departments] it requires active participation and communication with your dealers to ensure you are getting financial benefits," O'Connor says. "The benefit of these credits can be financially significant."

 

 

Used Car Sales

 

When a police vehicle is taken out of the fleet, there are several ways that departments can get added value out of that vehicle. Some departments pass along those vehicles to personnel who aren't involved in field operations and simply need a vehicle to get back and forth to work. Others sell the vehicles to their employees or to other governmental departments at a reduced rate.

Selling used vehicles via auctions has also proven to be an effective way to not only generate some revenue for the department, but to do so without the significant time commitment that comes with selling one or more vehicle, according to Fort Lauderdale (Fla.) City Police Department Senior Public Information Specialist Chaz Adams.

Live auctions allow Fort Lauderdale to receive the best return on investment, according to Adams. He explains that the average ROI for live auctions when compared with other methods has been 20 percent or more over the last decade.

Mike Scott is a Michigan-based freelance journalist who specializes in fleet management topics.

Tags: How-To Guides, Budget Cuts, Fuel Costs, Managing a Police Fleet, Brakes and Tires

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