U.S. Mayor Article

Best Practices: Fresno Fleet Management's Program Results in Competitive Pricing, National Recognition

March 31, 2003

Faced with the mounting challenges of a weak California economy and increased demand for public safety services following 9/11, the city of Fresno is dealing with constrained resources and rising demand for services.

All U.S. cities face these challenges, and most are grappling with reverberations from the current economic conditions, resulting in declining city revenues.

Fortunately, Fresno had in place some Best Practices to more efficiently manage city resources and maximize the efficiency of critical services.

One of these is the city's Fleet Management, a division of the General Services Department responsible for maintaining a fleet of 1,752 vehicles. These range from patrol cars, refuse truck, sweepers, construction vehicles essential to the efficient operations of the city of slightly more than 427,000.

Fresno Mayor Alan Autry credits Fleet Management for helping Fresno and its taxpayers take steps to ensure the lowest possible costs to customers.

"We as a city stick to the motto that we are 'always looking to do better,'" the mayor said, adding that the model department serves as proof that Fresno can, and its citizens are doing just that.

Example: In a 10-year period, Fleet Management added 470 pieces of equipment, but only one mechanic.

Fleet Management is also responsible for additional key city services which include emergency generators' maintenance, construction equipment rentals and the disposal of vehicles. In addition, the division provides assorted shop services to city customers which include welding, machining, project design, and metal fabrication, provides equipment fueling service a state-of- the-art fully automated system. The division provides its customers with monthly billings generated by a three-tier client computer system called FleetAnywhere.

Fleet Management uses key industry benchmarks to track performance and is sensitive to customer feedback. The Division ensures customer communication occurs through daily conversation, bi-annual liaison meetings, operator questionnaires, and an annual customer service evaluation survey. The most recent survey resulted in a 95 percent customer service rating of Excellent. Fleet Management also administers the Fleet Replacement Program with the mission to replace city vehicles before their maintenance costs become onerous. When the total operating costs, including ownership and maintenance, escalate upward such vehicle costs exceed the purchase and operating costs for a new vehicle, they are disposed.

Fresno's staff keeping the vehicle fleet in top working order have a unique philosophy — "Run It Like You Own It!" They run the operation as a competitive business model, complete with a Business Plan, Annual Report, Customer Satisfaction Surveys, and a Customer Service Brochure.

Using direct surveys of their local competitors, Fleet estimates costs of doing business with the private sector, and they beat them with fully-burdened labor rates and the "preferential pricing" they ask for as a city when they do the survey. The FY 2003 fully-burdened labor rate of $60.65 per hour is 16 percent below the Fresno market rate of $72.00 per hour. To ensure customers are not charged more hours than necessary for a repair, actual technician repair time is compared to industry time standards. This helps to ensure the lowest possible labor cost is billed to customers.

To maintain the lowest possible parts costs, Fleet entered into a cooperative parts bid that includes a local school district, the County of Fresno and the nearby city of Clovis. The quantities of parts are large enough that the agencies realize considerable savings. Typically, the average cost is 34 percent less than the Fresno retail market. Another advantage is that the vendor replenishes stock on a weekly basis, saving staff time and increasing efficiency.

The city of Fresno purchases over 2 million gallons of fuel per year. To ensure the lowest possible cost, fuel is bid twice a week. This process provides for fuel to be billed to fleet customers at approximately 25 percent below Fresno retail market pricing.

Another way used to minimize costs is to spend approximately $2 million per year on outsourced repairs and services where peak demands or specialization make it more cost-effective. Outsourced repairs include auto body work, transmissions, radiators, OEM dealer service, truck body repairs, towing, heavy equipment washing, vehicle glass work, exhaust systems, upholstery, drive-line repairs, speedometer repairs, and fiberglass components.

Fresno's Fleet Management Division was recently recognized by a national automotive service organization for their automotive repair accomplishments. They were awarded the Blue Seal of Excellence from the National Institute for Automotive Service Excellence (ASE), a non-profit organization dedicated to improving the quality of vehicle repair and service. The city of Fresno is one of only three U.S. cities over 350,000 population to receive the Blue Seal of Excellence award.

For more information on Fresno's Fleet Management Best Practices, contact John Hunt, Fleet Manager (559) 621-1101. Ken Nerland, Director, General Services Department (559) 621-1001 is implementing the same competitive concepts in the other Divisions in his Department.

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