Equipment Fleet Management Maximizing your fleet performance at least cost. County Road Administration Board

Program Agenda Introduction Fleet Makeup  Standard Operating & Limited Use Equipment Life Cycle Costing & Rates  Costs & Overhead, User Input, Basic Calcs Accounting Questions?

Background Fleet Operations are a Fact $ Millions Invested Short of Replacement Funds Poor Documentation of Costs “Still Runs Doesn’t It?” Mentality Washington State Legislature Requires  RCW 36.33A – 1977 ER&R Law It’s all about saving money!

Typical County Fleet Seal Coat Operations Walla Walla County, WA

Life Cycle Costing Cost Time Operation & Maintenance Amortized Replacement Cost Targeted Replacement

LCC Elements Amortized Replacement Cost  Initial Purchase Cost Less Salvage Depreciated over Expected Life ($250,000 - $25,000) ÷ 15 = $15,000 / Yr Operating Costs Annualized  Fuel and Lubricants  Repair Parts and Labor  Facilities  Management & Administrative Overhead

Fleet Mgr’s Responsibilities Repairs Rates Replacement Schedules Manage Shop & Fleet Maintenance Crews Communicate  Formal (Written & Meetings) & Informal Select Fleet Equipment

Fleet Composition Help Users Decide What They Need (And Can Afford!) Full Time Operations Equipment  Items used often and regularly  e.g. Cars, Dump Trucks, Graders Limited Use Equipment External Equipment **

External Equipment Has the equipment really reached its economic life? Do the vehicle charges cover the true overhead costs of maintaining the fleet and that vehicle? Are any inflationary costs covered if they are replaced?

Full Time Equip Justification Based on needs & service levels  Documented Right size for task  ½ Ton Pickup or 2 Ton Truck ?  Bobcat Skidsteer or Cat 953 ?  Sedan or 4WD SUV ?

Limited Use Equipment Efficiency of the overall operation  Dispersed Sheriff’s Vehicles Special equipment  Snowplows & Sanding Boxes Infrequent operations  Testing Lab Trailer

LUE Justification Factors Essential government services Worker efficiency Response availability Unique characteristics Other key factors

LUE Justification Cite specific legal mandates Cite specific circumstances Include a direct cost evaluation Provide specific clear examples

Setting Equipment Rates Fleet Rates  Self Sustaining  Replacement & Operating Reserves Annual Replacement + Emergency  Based on Life Cycle Costing Equipment Classifications  Sub Classifications

Classifying Equipment Similar Design  Heavy Equipment – Graders, Trucks, Loaders  Light Equipment – Vans, Sedans, Pickups Similar Use  6 Yard Trucks vs. 10 Yard Trucks  Police Sedans vs. General Purpose Sedans Regular vs. Limited Use

Calculating Rates Motor Grader – Estimated 12 Year Life Direct Annual Operational Cost$27,652/yr x 12331,824 Purchase Price 160,518 Projected Inflation3% Straight Line57,786 Projected Salvage Sale PriceAt Auction10,000 Subtotal(Less Salvage)540,128 Projected 750 Hours Per Year UseSub ÷ 750 ÷ Fleet Overhead Rate (Note)9.40%65.65 Adjusted Hourly Rental Rate $66.00

Input to Rates User Knowledge Accounting Records  Accounting & Billing System Private Reimbursement vs. Fleet Use