COE fleet 04-10-12

City of Evanston Fleet Services Division

State of the Fleet & 10-Year Fleet Replacement Plan

• State of the Fleet

• History of Fleet Financing

• Recommendations for FY 12 Vehicle Replacement Budget

• On-going Comprehensive 10-Year Fleet Plan

Tonight’s Presentation

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Number of Vehicles/Equipment Within the Fleet

Number of vehicles/equipment = 364 units in 2012, 411 units in 2008 + 47 units retired & not replaced

Vehicle/Equipment Classifications

1. Police marked sedans, SUV’s, & motorcycles (37)

2. Police administrative vehicles, sedans (39)

3. Fire apparatus, heavy equipment, engines and aerial ladder trucks (11)

4. Fire administrative vehicles, sedans (6)

5. E.M.S. Equipment, ambulances (4)

6. Sanitation solid waste-packers, garbage trucks (13)

7. Recreation Buses, full size transit and smaller units (5)

8. All Departments, light vehicles 8,500 GVW, sedans, vans, smaller pick-up trucks (109)

9. Most Departments, light vehicles 8,501 – 19,500 GVW, vans, pick-ups, SUV’s, straight trucks (33)

10. P.W., Parks, Forestry, medium duty vehicles 10,001 – 19,500 GVW, larger work vans, pick-ups, straight trucks (32)

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Number of Vehicles/Equipment Within the Fleet (cont’d)

11. P.W., Parks, Forestry, heavy-duty vehicles19,501 GVW, large trucks, truck tractors, large dump trucks (33)

12. P.W., Parks, & Forestry heavy equipment loaders, backhoes, pavers, rollers (12)

13. P.W., Parks, Recreation, Forestry, Police & Fire, light equipment, boats, skid-steers, forklift trucks, trailers (30)

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Vehicle/Equipment Age & Expected Lifecycles

Vehicle Type

APWA * Age

Criteria

APWA * Usage Criteria

Evanston Actual Age

Average

Evanston Usage Criteria

Age Difference

Mileage Difference

Administrative Sedans

5-Years 75K-100K miles

12-Years Condition of drive-train

and appearance

+ 7-Years Evanston

-20,000 miles Evanston

Emergency Sedans

3-Years 85K-100K miles

3-Years Condition of drive-train

and appearance

Same -30,000 miles Evanston

Pickup Trucks 7-Years 100K-120K miles

10-Years Condition of drive-train

and appearance

+ 3-Years Evanston

-50,000 miles Evanston

Dump Trucks 7-10-Years 150K-250K miles

15-Years Condition of drive-train

and appearance

+ 5 to 8 Years Evanston

-50,000 miles Evanston

Fire Trucks 10-20-Years N/A 20-Years Condition of drive-train

and appearance

Evanston @ high end of

range

N/A

5* American Public Works Association

Vehicle/Equipment Age & Expected Lifecycles

Research & data mining from the Computerized Fleet Analysis System (CFA) and various physical audits has resulted in the following facts about our fleet:

1. The Fleet is composed of vehicles that, for the most part have costs that reflect the useful vehicle life.

1. Fire Ladder Trucks are the most expensive vehicles at $1.0 million in the fleet and have a vehicle life of 20 years.

2. Police Squad Cars are on the lower end of vehicle cost and only have a life of 3-4 years.

2. Based on recommended standards and on our Fleet Division’s review the average life of the City’s fleet should be 9 to 10 years.

3. Based on the current vehicle conditions and Evanston Life-cycle, there are 151 vehicles either due or overdue to be replaced.

4. In F.Y. 2012 we will have 151 vehicles due or overdue that need to be replaced. It is anticipated that with funding of $3.5M versus $2.4M, we will replace approximately 35-39 units. 6

If 37 vehicles are replaced, the Fleet will have 68.7% vehicles that are not due or overdue to be replaced.

Vehicles for Replacement By Type Based On Evanston Life-Cycle

Description # of Vehicles in

Classification

Overdue Due Total Overdue

& Due

Lt. duty pick-up trucks, vans, sedans, jeeps, etc.

148 28 9 37

Police & Fire sedans 75 6 25 31

EMT Units 4 2 0 2

Fire Heavy Equipment 11 2 0 2

Medium duty vans & trucks

35 19 1 20

Heavy duty trucks (dump & waste packers)

54 19 12 31

Street Sweepers 3 0 2 2

Heavy equipment 17 2 3 5

Miscellaneous equipment 20 19 2 21

Totals 364 97 54 151

There are 213 vehicles that are not due or overdue for replacement. Equates to 58.52% of the fleet.

151 vehicles due or overdue equates to 41.48% of the Fleet.

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88

CAPITALOPERATING

TOTAL

TIME/USAGETIME/USAGE

COST

COST

*

Economic Theory of Vehicle Replacement

Est. City

Fleet Fund History

1. Two Methods of Tracking Fleet Assets

A. Generally Accepted Accounting Principles (GAAP) Basis• Purchasing Vehicles is an exchange of Assets, Cash for

Vehicles.• Expenses are only recognized as vehicle is used (depreciation)

B. Budget/Capital Planning• Purchasing Vehicles is still an exchange of Cash for Vehicles• Expense is recognized immediately for budget/cash

management

2. GAAP discloses the net value of the Fleet

3. Budget/Capital Planning discloses and projects fleet purchases by year

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Fleet Fund History GAAP

1. In 2001-02 The City’s Fleet had an Audited Value of $16.2 and after depreciation of $9.5 million, a net value of $6.7 million.

2. In 2010-11 The City’s Fleet had an Audited Value of $20.4 million and after depreciation of $15.1 million a net value of $5.3 million

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011

Value of Fleet (Before Depreciation) 16,177,519 16,982,512 17,390,095 18,209,749 19,766,744 19,877,815 19,968,930 20,308,430 20,161,437 20,431,236 21,486,259

Depreciation 9,461,037 10,435,857 11,517,322 12,049,844 12,689,047 13,082,065 14,269,777 14,079,046 14,797,464 15,112,841 15,167,134

Net Value of Fleet 6,716,482 6,546,655 5,872,773 6,159,905 7,077,697 6,795,750 5,699,153 6,229,384 5,363,973 5,318,395 6,319,125

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011

Value of City Fleet

Value of Fleet (Before Depreciation) Depreciation Net Value of Fleet

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Fleet Fund History Budget

1. 2001-02 through 2004-05 shows an equipment funding level of just over $1.0 million which would be insufficient to properly replace a fleet valued at $16.2 million

2. Funding cut in 2007-08 to reflect budget constraints in the General Fund3. Maintenance Expenses continue to increase until 2010-11, when staff was downsized and

fleet reductions also reduced maintenance costs

FLEET SERVICES BUDGET 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011 2012Fleet Revenue 4,594,000 4,543,500 4,687,400 4,699,700 4,756,000 5,054,400 5,054,400 5,054,400 5,027,600 4,760,130 3,740,423 7,287,234

Fleet Maintenance - Budget 1,729,400 1,813,200 1,909,800 2,012,200 2,132,700 2,417,000 3,010,100 3,359,400 3,919,000 3,201,860 3,171,628 3,496,444 Vehicle Purchases - Budget 1,137,800 1,065,500 1,065,500 1,185,700 1,836,000 2,041,000 1,016,000 2,000,000 2,000,000 1,700,000 1,933,320 2,450,000 Total Operational Costs - Budget 2,867,200 2,878,700 2,975,300 3,197,900 3,968,700 4,458,000 4,026,100 5,359,400 5,919,000 4,901,860 5,104,948 5,946,444

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011 2012

Total Operational Costs - Budget

Fleet Maintenance - Budget

Vehicle Purchases - Budget

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Fleet Fund History Actual

1. In 2008-09 Transfers from the General Fund to Fleet were reduced by $1.2 million to cover Emergency Salt Purchases and to help limit the impact of the Economic Recession.

2. Fleet parts and equipment was also substantially over budget in this year due to vehicle repair needs.

3. Blue Ribbon Report on Pensions recommended the increased funding of Pensions and based on the Economy this resulted in a shift of property taxes from the General Fund to the Pension Funds to limit any impact to residents.

4. 2011 was a 10 month year and departments could only fund 10 months of payments into the Fleet Fund.

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011Fleet Maintenance - Actual 1,857,417 1,778,695 1,949,653 2,342,266 2,498,691 2,585,306 3,139,899 3,811,959 3,299,682 3,048,036 2,890,780 Vehicle Purchases - Actual 910,771 1,457,318 861,943 1,958,941 2,313,297 1,294,308 307,894 1,810,442 544,822 1,168,150 2,107,398 Total Operational Costs - Actual 2,768,188 3,236,013 2,811,596 4,301,207 4,811,988 3,879,614 3,447,793 5,622,401 3,844,504 4,216,186 4,998,178

Surplus / (Deficit) 1,799,465 1,326,559 1,923,992 476,233 (76,387) 1,176,867 1,582,421 (1,092,965) (334,083) 366,688 (1,233,382)

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011

Total Operational Costs - Actual Fleet Maintenance - Actual Vehicle Purchases - Actual

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Present Situation

•We have 151 vehicles/equipment either due or overdue for replacement

•The combined total of overdue & due vehicle/equipment replacement units equates to $10.2M

•The F.Y. 2012 Vehicle Replacement Budget is $2.4M with a recommendation of a budget transfer of $500K from the General Fund & a transfer from reserves of $600K for a total of $3.5M

•This equates to a funding deficit of $6.7M in due or overdue vehicle replacement expenses

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Present Situation

10 YEAR PLANNING

1.Current Vehicle backlog is too large to fund from reserves

2.Backlog could be funded from General Obligation Bonds but:1. Interest Cost on 10 year bond would be approx $1.4 million for $6.0

million in bonds

2. New Debt is not recommended given the City’s current Debt Service schedule and as discussed in Capital Improvements Planning.

3.Level funding at slightly higher level ongoing level can reduce backlog by half by 2016 and eliminate backlog by 2019.

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10 YEAR PLANNING- EQUIPMENT REPLACEMENT ONLY

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 102012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Due For Purchase 10,241,065 1,964,210 1,330,914 2,301,283 589,571 1,394,741 1,465,699 787,154 844,302 1,274,422 Straight line funding 2,219,337 2,219,336 2,219,336 2,219,336 2,219,336 2,219,336 2,219,336 2,219,336 2,219,336 2,219,336 Purchasing Plan 3,500,000 2,500,000 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000 Deferred Purchases 6,741,065 6,205,275 5,436,189 5,637,472 4,127,043 3,421,784 2,787,483 1,474,637 218,939 (606,639)

CITY OF EVANSTON - 10-Year Fleet Catch-Up Schedule

(2,000,000)

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Due For Purchase

Straight line funding

Purchasing Plan

Deferred Purchases

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What we will do to get back on track!

• Vehicle justification by Department/Division

• Emphasize shared equipment concept & practice across Divisions

• Expand the use of motor-pooling opportunities for staff

•Continue leasing as an option

•Explore shared equipment with other entities

•Current right-sizing has reduced fleet costs by about 10% and a further reduction of 10% could

have roughly the same impact

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Continuation of “Right-Sizing” the Fleet in the F.Y. 12

“Rightsizing Outcomes “

Year# of

Units Retired

Capital $$’s

Eliminated

Annual Maint. &

Repair $$’s Eliminated

Total Future $$’s Eliminated

from Fleet Fund

Expenses

$$’s Rec’d from Sale of Surplus

Property

2007 3 $111,100 $8,050 $119,150 $22,607

2008 10 $390,000 $31,006 $421,006 $57,668

2009 1 $46,147 $2,594 $48,741 $5,178

2010 5 $300,889 $12,492 $313,381 $38,587

2011 15 $920,286 $195,053 $1,115,339 $235,955

2012 13 $164,458 $6,200 $170,658 $20,946

Totals 47 $1,932,940 $255,395 $2,188,335 $380,941

“Rightsizing” will continue through 2012 and beyond.17

Next Steps

• Develop plan, goals, and objectives in close coordination with operating departments and City Council – Establish priority of fleet replacement (emergency, snow, construction, etc.)

• Review, assess, and adjust, where necessary, present life-cycles of vehicles

• Continue to explore green solutions including:– Alternative fuels and

– Higher mpg vehicles (hybrids or other solutions)

– Less vehicles in total

• Continue to maximize resale values by timely “Sale of Surplus Property”

• Prepare and schedule purchases to minimize spiked funding requirements

• Re-establish a healthy “Fleet Fund Balance” that meets planned purchases and include this review in the annual budget process.

NEXT STEPS

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Questions?

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