Government Fleets’ Costs Driven Down with Technology Tools
The technology is there, but many state and local agencies still aren’t using it.
Consider how much time and effort many of us spend when buying a car. New or used? Buy or lease? Heavy-duty SUV or fuel-efficient compact? Basic black or a daring shade of electric blue?
Cities, counties and states aren’t generally concerned about the color of the vehicles in their fleets. But a host of trade-offs are necessary to make sure their fleets are well maintained and able to deliver high-quality service. Recent fleet management efforts are beginning to focus on administrative techniques and technology tools that can bring down the cost and improve efficiency and quality of service.
Many fleets aren’t there yet. A slew of evaluations and audits have found problems with fuel inefficiency, inappropriate usage and suboptimal maintenance of fleet operations. Many entities don’t even have the data in hand to make smart management decisions. A recent audit in Sacramento, Calif., for instance, cited 240 underutilized vehicles and identified instances where an estimated $5 million could have been saved. While the city’s fleet division provided departments information on vehicle use, the audit noted that “the division has not always adequately and accurately presented usage data to enable optimal decision-making.”
Similarly, an evaluation last year of vehicle operations by Florida’s Office of Program Policy Analysis and Government Accountability found that while the Department of Management Services was the agency charged by state law with adopting and enforcing rules and regulations for motor vehicles, it had delegated the management task to 30 agencies, resulting in a wide variety of policies and procedures. These inconsistencies, the report said, “result in poor overall management, unnecessary fleet expenditures, duplication of effort, and agencies spending resources on activities that are not central to their core missions.”
Consider North Carolina. No law there requires agency-level data collection about vehicles. As a result, the Program Evaluation Division reported in December that just five of 14 agencies and institutions that owned 200 or more vehicles were collecting the data they needed to evaluate if the fleet was the right size for the agencies’ needs. This isn’t a case where pennies are at stake. In fiscal year 2011, agencies and institutions in North Carolina spent $182.7 million to own and run their vehicles -- that’s the entire cost of the Division of Social Services.
What’s more, North Carolina’s Division of Motor Vehicles is supposed to have a list of state-owned vehicles, but its numbers differed by more than 2,000 from those reported by the agencies themselves. “The state,” the report simply said, “does not know the number of vehicles it owns.” Fortunately for North Carolinians, legislators have been responding to the evaluation aggressively.
When governments direct attention to this issue, the potential for savings is huge, says Jeff Strane, director of Georgia’s Office of Implementation. Georgia began to build better information about its cars and centralize management at the enterprise level under former Gov. Sonny Perdue’s Commission for a New Georgia. That work continues under Gov. Nathan Deal. One result: The fleet of 20,000 is now closer to 18,000. Savings from eliminating cars identified as unnecessary are estimated to be $1.7 million annually.
One key element in improving management efficiency was hiring an enterprisewide fleet manager. Equally crucial was making it worthwhile for agencies to work cooperatively with the central office. When the state first stepped up its collection of centralized information, agencies found it clumsy and time consuming. But an easier-to-manage system was put in place in 2010 and has vastly improved the data available. Perhaps more important, the central office began giving data back to the agencies on a quarterly basis so they could compare their vehicle and fuel use to similar agencies. Each agency can now see where it can save money and do a better job.
Once a government has the appropriate data, technology can permit it to bring heretofore impossible efficiencies to the fleet. Last year, Wayne County, Mich., installed $360,000 worth of GPS technology for the 158 trucks and 18 sweepers that deal with winter road maintenance. On a real-time basis, it tells the Department of Public Services where trucks are located, how much salt the trucks are using, whether truck plows are up or down and how fast the trucks are going. “If there’s a route that hasn’t been cleared, we can see where the nearest truck is and clear the route,” says Cindy Dingell, deputy chief operating officer of Wayne County’s Department of Public Services. An additional element built into the Wayne County system is a website (compass.waynecounty.com) that the public can use to track the progress of trucks on county roads. Using the map option, a commuter ready to leave home for work can, for example, plan the best route to take to avoid roads that have not yet been cleared of snow.
With technology able to give governments the power to provide so much information and quality service, it makes it particularly frustrating that so many governments have yet to tap into its management potential. John Turcotte, director of the Program Evaluation Division in North Carolina, puts it this way: “Technologies are further along than the practices to use that technology.”