Equipment Fleet Management

Maximizing your fleet performance at least cost.

County Road Administration Board

Program Agenda

Introduction Fleet Makeup

Standard Operating & Limited Use Equipment Costs & Overhead, User Input, Basic Calcs

Life Cycle Costing & Rates

Accounting Questions?

Background

Fleet Operations are a Fact $ Millions Invested Short of Replacement Funds Poor Documentation of Costs Still Runs Doesnt It? Mentality Washington State Legislature Requires

RCW 36.33A 1977 ER&R Law

Its all about saving money!

Walla Walla County, WA

Typical County Fleet Seal Coat Operations

Life Cycle Costing

Targeted Replacement Amortized Replacement Cost

Cost

Operation & Maintenance Time

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 Mgrs 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 Ton Pickup or 2 Ton Truck ? Bobcat Skidsteer or Cat 953 ? Sedan or 4WD SUV ?

Right size for task

Limited Use Equipment

Efficiency of the overall operation

Dispersed Sheriffs Vehicles Snowplows & Sanding Boxes Testing Lab Trailer

Special equipment

Infrequent operations

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 Sub Classifications

Equipment Classifications

Classifying Equipment

Similar Design

Heavy Equipment Graders, Trucks, Loaders Light Equipment Vans, Sedans, Pickups 6 Yard Trucks vs. 10 Yard Trucks Police Sedans vs. General Purpose Sedans

Similar Use

Regular vs. Limited Use

Calculating Rates
Motor Grader Estimated 12 Year Life Direct Annual Operational Cost Purchase Price Projected Inflation Projected Salvage Sale Price Subtotal Projected Hourly @ 750 Hours Per Year Use Fleet Overhead Rate (Note) Adjusted Hourly Rental Rate $27,652/yr x 12 3% Straight Line At Auction (Less Salvage) Sub 750 12 9.40% 331,824 160,518 57,786 10,000 540,128 60.01 65.65 $66.00

Input to Rates

User Knowledge Accounting Records

Accounting & Billing System

Private Reimbursement vs. Fleet Use