Government Fleet June 2011 by Kelly Bracken

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GOVERNMENT FLEET

JUNE 2011 • A BOBIT PUBLICATION • VOLUME 9 - ISSUE 4

WWW.GFLEET.COM

FEATURES 16 EFFECTIVE COMMUNICATION ENHANCES FLEET IMAGE Increasing professionalism is helping drive fleet management out of the “dirty garage” stereotype. Effective communication with public officials, citizens, supervisors, and customers can further improve the image of fleet operations.

24 24 LIABILITY RISK FOR GOVERNMENT FLEET ORGANIZATIONS UNDER CURRENT LAW Most people no longer bat an eye when hearing about multimillion dollar damage awards to punish companies for an employee’s negligent acts. However, what are the liability concerns for a public sector fleet manager?

30 LOW-COST OR NO-COST GREEN FLEET STRATEGIES A variety of easy approaches can yield quantifiable results in greening a fleet, including avoiding unnecessary travel and using alternative-fuel vehicles. Tactics used by the states of West Virginia and Oklahoma are shared, including leveraging existing state natural resources.

34 SEATTLE MAXIMIZES TECHNOLOGY TO IMPROVE OPERATIONS Today’s technology can provide a number of advantages, but only when used as intended and to maximum potential. By identifying how to fully utilize its information technology system, the City of Seattle was able to increase efficiency in its operations and achieve savings.

34 DEPARTMENTS 4 ON THE WEB

//////// O F F - R O A D

E Q U I P M E N T //////////////////////////////////

38 BEST PRACTICES IN REMARKETING OFFROAD EQUIPMENT Remarketing can yield major resale dollars for “yellow metal” and other off-road equipment. Five fleet experts weigh in on some of the best ways to maximize resale value for off-road equipment.

44 PRODUCTS 48 PUBLIC FORUM ON THE COVER:

Government Fleet (USPS 740) is published bi-monthly, with an additional issue in June, by Bobit Business Media, 3520 Challenger Street, Torrance, California 90503-1640. Periodicals Postage Paid at Torrance CA 90503-9998 and Additional Mailing Offices. POSTMASTER: Send address changes to Government Fleet, P.O. Box 1068 Skokie, IL 60076-8068. Please allow six to eight weeks for address changes to take effect. Please allow six to eight weeks to receive your first issue. Bobit Business Media reserves the right to refuse nonqualified subscriptions. Please address editorial and advertising correspondence to the executive offices at 3520 Challenger Street, Torrance, California 90503-1640. The contents of this publication may not be reproduced either in whole or in part without the consent of Bobit Business Media. All statements made, although based on information believed to be reliable and accurate, cannot be guaranteed and no fault or liability can be accepted for error or omission.

Government Fleet

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6 MAIL STOP 10 INDUSTRY NEWS ■ Award Winners & Finalists Announced

F Fleet managers sshare how they ccommunicate with oothers to help iimprove fleet image.

June 2011

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What You're Reading www.government-fleet.com w

THE

Government-fleet.com’s top 5 most popular stories as of May 16, 2011.

AUSTIN TO INSTALL ANTI-IDLING TECH IN PATROL VEHICLES The solution from Energy Xtreme will provide enough power to operate necessary electronics equipment in the patrol vehicles without running the engine.

CHICAGO TO COMBINE FLEET MANAGEMENT & GENERAL SERVICES Newly appointed Commissioner David Reynolds will manage all government property, including the city’s fleet of 12,400 vehicles. He will be charged with improving the energy efficiency of City buildings and vehicles, according to Mayor-Elect Emanuel.

WASHINGTON STATE PATROL SWITCHES TO HONDA ST1300PA Twelve of the State’s current 43 full-time troopers on motorcycle have already completed the transition.

COLUMBUS FLEET USING CNG TO REDUCE DIESEL COSTS The City’s initial purchase was for 24 CNG vehicles to replace the highest polluters in the fleet. The City is currently building a CNG fueling station as well.

WEB EXCLUSIVE: FUELING PUBLIC SECTOR FLEETS With public and private sector fleets facing similar issues, do fuel management best practices exist in the private world that can benefit public fleets? Find out about two key elements that should be of particular interest to public fleets.

Telematics

Safety

Remarketing

WHAT WE’RE W B LO BLOGGING ABOUT MARKET TRENDS By Mike Antich www.government-fleet.com/ Blog/GF-Market-Trends.aspx ANTICH

April 18: The Value of Creating a Fleet Advisory Board December 6: You’re Only as Good as Your Staff November 22: Be Part of the Solution, Not Part of the Problem

THE FLEET CHANNELS Industry Trends

Fuel

November 15: Maximizing Utilization as a Cost-Containment Strategy

Use the navigator on the government-fleet.com home page to browse the latest articles from the channels. Enter a channel to view in-depth news, articles, tools, calculators, and more related to that specific topic.

FLEET BLOGS:

Learn from the experts at Government Fleet the ways companies are greening their fleets. The Green Fleet Channel brings you the latest in the reduction of fuel costs and alternative energy solutions for fleet cars and trucks.

May 16: Leaders: It’s Your Turn

• Oil Initiatives Government Fleets Should Consider • How Minneapolis Implemented its Green Fleet Policy • Pros and Cons of ‘Right-Sizing’ Vehicles to Increase Fuel Economy • Seattle Named No. 1 Government Green Fleet • Government Fleet Managers Recognized for Leading ‘Green’ Efforts RECEIVE BREAKING NEWS WHEN IT HAPPENS Sign up for Government Fleet’s bi-weekly eNewsletter for timely updates on the latest industry news in public sector fleet management, as well as research and trends, industry events, and current Government Fleet magazine articles and features. Subscribe at www.government-fleet.com. 4

Government Fleet

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The Voice of the Fleet Community (www.fleetblogs.com)

by Joseph Thompson May 13: You Can’t Lose the Budget Gambit Projecting $4 a Gallon Gasoline

by Wayne Smolda May 13: Impact of Higher Gas Prices Felt Everywhere.

by Jennifer Sutherland May 2: Is your truck too big for the job? It could be costly!

by Steve Fowler April 29: Coming Together to Fuel Sustainable Change

by Elisa Durand Interested in starting your own blog? Go to www.fleetblogs.com for more information.

June 2011

5/18/11 4:20:50 PM

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MAIL STOP THE VALUE OF CREATING A FLEET ADVISORY BOARD In reply to the Public Forum editorial entitled, “The Value of Creating a Fleet Advisory Board,” we started a similar program in 2009, which we call the Fleet Focus Group. (See May GF.) Our charge is to meet bimonthly and discuss fleet topics and customer inputs. Although we did not get off to a roaring start, we have been able to get the team into a performing mode and do address key issues and topics. There is more value in these types of groups than a lot of people give credit. When your customer groups are represented, they are more vested in the outcomes. As a fleet professional, I see these groups as a tool to get my fleet more customerfocused. Dennis Hogan CPFP/CAFM Fleet Services Manager Fleet Services Division City of Cedar Rapids, Iowa

SCARY TIMES The major challenges facing Douglas County, Ore., are a tight budget with rapidly rising fuel costs. I’m at a a break-even point p on budget expenditures e halfway h through the t fiscal year and anticipate a being way w over-budget at the th end. In addition, I am facing pressure to outsource more and an more functions of fleet. We are constantly having to defend our position with the private sector. Of course, we have the anti-government sentiment out there. The consensus of the general public is the belief that most, if not all, functions of government should be privatized. This is understandable with the course the federal and local governments have taken over the past several years. Recently, Multnomah County, Ore., to the north of us, has made the decision to privatize its entire fleet operation. In my opinion, not the best financial decision, but a sign of the times nonetheless. We are also facing a funding

TEACHING PUBLIC OFFICIALS In my 23 years as a public employee, I’ve seen many newly elected officials start office with excessive emotional ignorance. In their quest to “fix” fiscal irresponsibility, they mistakenly identify the enemy as the most visible resources providing public services — the frontline workers and their equipment. On any scale, global or local, nothing is more costly than combining power and ignorance. The bumper sticker: “If you think education is costly, try ignorance” could appropriately be applied to government. Retired Public Works Director Bill 6

Government Fleet

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crisis in our County due to the expiration of the Federal Safety Net Funding at the end of the next fiscal year. We are looking at about 50-percent reduction in Public Works and 35-40 percent for General County. This makes the budgeting process very difficult, to say the least. We are coping with these challenges by implementing various changes in our fleet operation. These include outsourcing the body and tire shop functions, downsizing the fleet due to funding and the economic downturn, making corresponding reductions in full-time employees, keeping vehicles and equipment much longer, and going to extended oil change intervals to name a few. On the positive side, there is some good to come out of tight financial times. The current economic situation has forced this County to identify any inefficiencies and make adjustments accordingly. One could look at Douglas County as a microscopic picture of what is happening nationwide. Scary times. Michael Blanck Fleet Services Director Douglas County Fleet Services Roseburg, Ore.

Sterling (City of Greeley, Colo.) wrote a noteworthy American Public Works Association (APWA) book on managing the cost of fleet equipment. However, it was above the understanding of elected officials. I have wanted to write an educational aid, targeting entry-level elected officials, explaining the “nuts and bolts” of fleet cost management and how integrating fleet best practices can be measured annually so that costly privatization studies aren’t initiated every three to four years. This concept began when a former City Councilman (now a State Representative) wanted to privatize two City

DECISIONS WILL CREATE A FLEET MAINTENANCE CRISIS The continued decision to forego vehicle replacement to provide budget savings is posing a danger to public sector fleets. This type of decision is typically made by City management. In our case, the City Council has annually under-funded vehicle replacement. Over time, these decisions will ultimately create a crisis in fleet maintenance. Author wished to be anonymous

LIMITED PUBLIC SAFETY APPLICATIONS WILL STUNT ALT-FUEL GROWTH The political unrest in the Middle East and the improving economy are responsible for record fuel prices. I believe one of the main factors that kept the price of fuel down was the recession. As the economy improves, fuel prices will rise. Small progress is made each year on green fleet sustainability initiatives as grant monies are available. As the price of fossil fuels rise, alternative fuels become more cost effective. The biggest challenge is the

services (fleet and refuse) because, as he put it, “private enterprise can always do it more economically.” After successfully defending the lower cost and higher efficiency of our fleet division, I have this elected official on videotape stating: “When I started this crusade to privatize fleet, I was so sure it could be done cheaper — and I was so wrong. You’re doing a great job.” That public exoneration only lasted until the next zealous politician was elected to local power. Stephen Kibler, ACFM Fleet Manager City of Loveland, Colo.

June 2011

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MAIL STOP VP and Group Publisher Sherb Brown (310) 533-2451 • Sherb.Brown@bobit.com Publisher Bearly VP and Eric Group Publisher (310) 533-2579 • Eric.Bearly@bobit.com Sherb Brown (310) 533-2451 • Sherb.Brown@bobit.com Editor and Associate Publisher Mike Antich Publisher Bearly (310) 533-2467 Eric • Mike.Antich@bobit.com (310) 533-2579 • Eric.Bearly@bobit.com Managing Editor Editor andCindy Associate Brauer Publisher Mike Antich (310) (310) 533-2558 533-2467 •• Cindy.Brauer@bobit.com Mike.Antich@bobit.com Senior Editors Managing Editor Lauren Fletcher Fletcher Lauren (310) 533-2415 • Lauren.Fletcher@bobit.com Senior Editor Grace Lauron L. Suizo (310) 533-2414Grace • Grace.Lauron@bobit.com (310) 533-2414 • Grace.Suizo@bobit.com Field Editors Associate Bob Cavalli, AlEditor Cavalli Thi Dao (310) 533-2544 • Thi.Dao@bobit.com Production Director/Manager Kelly WebBracken Editor (310) Greg533-2574 Basich (310) 533-2572 • Greg.Basich@bobit.com Brian Peach (310)Director/Manager 533-2548 Production Kelly Bracken Art Director (310) 533-2574 Vince Taroc Brian Peach (310) 533-2548 Editorial Consultant Art Director Howard Rauch Vince Taroc DISTRICT ADVERTISING MANAGERS Editorial Consultant Publisher/Sales Manager Howard Rauch Eric Bearly (310) 533-2579 • Eric.Bearly@bobit.com DISTRICT ADVERTISING MANAGERS Great Lakes Publisher/Sales Manager Robert Brown Jr. Eric Bearly (310)1000 533-2579 • Eric.Bearly@bobit.com W. University Dr., Ste. 209 Rochester, MI 48307 Great Lakes Robert Brown Jr. (248) 601-2005 1000 FAX: W. University Dr., Ste. 209 (248) 601-2004 Rochester, MI 48307 Robert.Brown@bobit.com (248) 601-2005 Sales &FAX: Marketing Coordinator (248) 601-2004 Robert.Brown@bobit.com Tracey Tremblay (310) 533-2518 Sales & Marketing Coordinator Tracey Tremblay (310) 533-2518 Chairman Edward J. Bobit Chairman President & Chief Executive Officer Edward J. Bobit Ty F. Bobit President & Financial Chief Executive Chief OfficerOfficer Ty F.E.Bobit Richard Johnson Chief Financial Officer Business and Editorial Office Richard E. Johnson Bobit Business Media 3520 and Challenger Street Business Editorial Office Torrance, CA 90503-1640 Bobit Business Media 3520 Challenger Street FAX: (310) 533-2503 Torrance, CA 90503-1640 FAX: (310) 533-2503 Change Service Requested Return Address Change Service Requested Return Address Government Government Fleet Fleet PO PO Box Box 1068 1068 Skokie, IL 60076-8068 Printed in USA

Government Fleet

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time it takes to recover the incremental cost between the lower-priced fossil-fuel vehicle and the higher-priced alternative-fuel vehicle. As the difference between fuel prices grow, the cost recovery is more viable in the short term. The largest percentage of municipal fleet vehicles are and will be in public safety. Until good alternative-fuel solutions are available (that police officers and firefighters will accept) in police patrol vehicles and fire apparatus, the use of alternative-fuel vehicles by municipalities will be limited. Author wished to be anonymous

IS IT WORTH THE COST? We know that alt-fuel vehicles produce fewer emissions, but is the cost worth it?

I recently spoke to a conversion shop in Texas that said to convert a DT466 to LPG or CNG, it would cost $80,000. Not in 50 years would that pay for itself, and that is on a used truck that may not be worth $20,000 at the time of the conversion. E-mail from Jerry Shrum

CURIOUS I read [in the GF eNewsletter] that the City of Charlottesville, Va., estimates it is saving $100,000 on fuel and maintenance after replacing aging City vehicles with hybrids and other altfuel vehicles. However, I am curious as to what the total expenditure was to purchase the 45 alternative-fuel vehicles, including the hybrids. Was any of this subsidized by federal incentives? How did you calculate the fuel

STATE OF PUBLIC SECTOR FLEET MANAGEMENT Higher fuel prices appear to be a neverending saga that looks to only get much worse with time. Our budgets are already tapped to the max and rising fuel prices are diverting precious funds to cover the fuel budget shortage. Not only do we need to cover the shortage in the fuel budget, but many of the other items in our operating budget are impacted by the rise in petroleum prices — either because the freight to get the product to us increases our cost to do business or because petroleum is an important element in producing the products we need to service vehicles (e.g. motor oil, tires, belts, etc.). The fuel budget debacle needs to be managed, but the thing I worry about most of all is the loss of earning power for my staff because of no increase in pay for more than four years along with a reduction in their employee perks. Virginia is a right-to-work state, and pay and benefit increases have never been onerous to begin with. In 1982, when I joined city government in Indianapolis, one could expect an annual pay increase in the neighborhood of 5-7 percent each and every

savings? Although you are saving in fuel costs, what is the break-even point? How long do you have to retain the vehicles to realize true savings? Clyde Omija Assistance Chief Division of Automotive Equipment Services City & County of Honolulu

The news item on the City of Charlottesville, Va., appeared in the March 17 edition of Government Fleet’s e-mail newsletter, GF eNews. According to the City of Charlottesville, it uses 45 alternative-fuel vehicles, including16 bi-fuel (CNG and gasoline) vehicles, 21 hybrid-electric vehicles, and five flex-fuel (ethanol and gasoline) vans. — Editor

year with very generous benefits — boy, are those days gone! As I said, we haven’t seen a pay increase here in Lynchburg for four — now going on five — years. We have had to suffer through furlough days, and beginning with the next fiscal year, employees will be asked to pay 5 percent into their retirement plan, which was previously covered by government. This will impact our ability to hire talented employees (something that has already been a challenge for the last several years) and will make it difficult for us to retain the ones we have spent several years training to meet our needs. I plan to retire within the next couple of years so I’ll make do, but my younger employees may rethink whether government is the type of stable business where they want to work. This is a shame considering that more than ever, we need their skills to service technologically advanced vehicles and manage a business practice requiring the best talent we can get. John McCorkhill Jr. CFM/CAFM/CEM/CPFP Director of Fleet Services City of Lynchburg, Va.

June 2011

5/18/11 4:17:50 PM

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The Toyota Sienna. There’s plenty to like. Including a big interior that’ll give you more than enough storage to fit just about anything for your business. And when it comes to bottom-line efficiencies, consider this: According to IntelliChoice, Sienna has the “Highest Retained Value”1 in its class. And what’s not to like about its low operating costs and high resale value. You like? We thought you and your bottom line might. To make Sienna a fleet vehicle and an asset to your business, call 1-800-732-2798 or go to fleet.toyota.com Options shown. 12011 IntelliChoice, www.IntelliChoice.com; Minivan. ©2011 Toyota Motor Sales, U.S.A., Inc.

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5/9/11 4:17:52 4:58:42 PM PM 5/18/11

INDUSTRY NEWS

2011 PUBLIC SECTOR FLEET MANAGER OF THE YEAR FINALISTS NAMED CHARLOTTE, NC – Government Fleet magazine named its three finalists for the 2011 Public Sector Fleet Manager of the Year award at the 2011 NAFA Institute & Expo (I&E) during Bobit Business Media’s awards presentation. The award is sponsored by ARI and Fleet Counselor Services. The three finalists are: • Paul Condran, equipment maintenance/fleet manager, City of Culver

City, Calif. • Samuel Lamerato, CPFP, superintendent of fleet maintenance, City of Troy, Mich. • Erle Potter, PE, CEM, state equipment manager, Virginia Dept. of Transportation (DOT). Fourteen nominees competed for this year’s award. See the May issue of GF for all nominee bios.

CONDRAN

LAMERATO

POTTER

The winner will be announced at the Government Fleet Expo & Conference in San Diego.

Government Fleet Managers Receive Goill & Sustainability Awards

2012 GFX SET FOR DENVER Government Fleet Expo & Conference 2012 will take place at the Colorado Convention Center in Denver June 18-20, 2012.

PHOTO BY GARY WIEN

PHOTOS BY GARY WIEN

CHARLOTTE, NC – Government fleet managers were honored at this year’s NAFA Institute & Expo (I&E) in Charlotte for their fleet management ideas and sustainability initiatives. Bob Stanton, CPM, CPFP, former director of Polk County (Fla.) Fleet Management (now with Hillsborough County, Fla.), received the 2011 Larry Goill Quality Fleet Management Idea Award for incentivizing County drivers to drive more fuel efficiently, offering a payout if they achieved better fuel mileage. According to NAFA, this led to fuel consumption reduction of nearly a half million gallons, decreased preventable accidents by 22 percent, and saved the County more than $1.5 million. Bryan Flansburg, CAFM, director of transportation services for the University of Colorado, received the Goill Award for implementing an automated motor pool vehicle check-in system. The system resulted in a 60-percent reduction in motor pool staffing, according to NAFA. NAFA awarded the Sustainable Fleet Award to Angela Sherick-Bright, acting assistant general manager for the City of Los Angeles General Services Department, which operates approximately 450 refuse vehicles that run on alternative fuel. Gerry Calk, fleet officer for the City of Austin, Texas, also received a Sustainable Fleet Award. The Austin fleet has significantly raised its alt-fuel vehicle and equipment percentage since 2007.

Gerry Calk and Angela Sherick-Bright received Sustainable Fleet Awards. 10

Government Fleet

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Mario Gionet (center), NAFA VP for Canada and Northern Region Trustee, presented the Goill Awards to Bryan Flansburg (left) and Bob Stanton (right).

June 2011

5/18/11 3:28:31 PM

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INDUSTRY NEWS

WASHINGTON – President Barack Obama outlined his administration’s plans to reduce dependency on foreign oil and move toward a more sustainable economic model. One aspect of this plan is to convert the federal fleet, which consists of more than 600,000 vehicles, to hybrid and other alternative-fuel models. His plan calls on federal agencies to ensure that by 2015, all new vehicles they purchase will be powered by alternative fuels. The plan cited the General Service Administration’s (GSA) purchase of 5,603 hybrid vehicles in 2010, which doubled the number in the federal fleet, as progress toward the goal of greater energy independence. GSA is also preparing to purchase 100 plug-in hybrid electric vehicles (PHEVs), which are scheduled for delivery this year. The plan also cited the 35.5 mpg 2016 average fuel economy standards as part of the plan to reduce dependence on foreign oil. In July, the EPA will finalize fuel economy and greenhouse gas emissions standards for commercial trucks, vans, and buses built between 2014 and 2018. The administration also announced it will introduce a proposal for fuel economy and greenhouse gas emissions standards for passenger vehicles from 2017 through 2025 in September.

CHICAGO TO COMBINE FLEET AND GENERAL SERVICES DEPARTMENTS CHICAGO – Chicago’s Mayor-elect Rahm Emanuel announced that David Reynolds, the new Commissioner, will lead the Department of General Services, which will incorporate the City’s Department of Fleet Management. Making good on his promise to make the fleet smaller and “greener,” Emanuel said Reynolds will use his background in green technology and sustainable development in managing the fleet and City facilities. As of press time, Fleet Management and General Services are separate departments in the City. “As Commissioner, David Reynolds will manage all City government property, from facilities and leases to the vehicle fleet. He will be charged with improving the energy efficiency of City buildings and vehicles,” Emanuel said. Fleet Management maintains approximately 12,400 units.

Washington State Patrol Switches to Honda ST1300PA OLYMPIA, WA – The Washington State Patrol has started the transition from using BMW motorcycles to the Honda ST1300PA. There are currently 43 full-time troopers on motorcycles across the state, and 12 have just completed the transition, As of press time, 12 troopers have already completed the according to the Washington transition to Honda motorcycles. State Patrol. The unit was specifically manufactured for law enforcement use. The Honda was chosen because of the balance, maneuverability, acceleration, overall performance, availability of service, and lower purchase and maintenance costs, according to the Washington State Patrol.

WIXOM USING BLUETOOTH IN CITY VEHICLES WIXOM, MI – The City of Wixom’s (Mich.) Department of Public Works is using a low-cost, cellphone-based communications solution to improve driver efficiency. The City wanted a solution that would enable drivers to use their cell phones safely while operating a vehicle. The City tested a Bluetooth solution from Got2bWireless on a The City of Wixom’s fleet consists of five Sterling small number of vehicles. In com- dump trucks and seven Ford pickup trucks. parison to several thousand dollars per vehicle for digital radios, the Bluetooth solution costs less than $200 per unit, with installation included. The Bluetooth device integrates with the vehicle’s radio station. With the success of the test program, Public Works Director Mike Howell decided to roll out the solution across the City’s fleet of 12 vehicles. Howell said the improved communications allow him to direct vehicle operators to different locations and drivers to continue with their tasks in a more efficient manner. For more information about Got2bWireless, e-mail inquiry@got2bwireless.com. 12

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PHOTO COURTESY WASHINGTON STATE PATROL

Obama Plan Will Increase Alt-Fuels in Fed Fleet

DOE Announces $5M in Clean Cities Grants WASHINGTON – Energy Secretary Stephen Chu announced that $5 million in funding is available for community-based efforts to deploy electric vehicle infrastructure and charging stations. Local governments and private companies will partner to apply for funding to help accelerate installation of EV charging stations and infrastructure. More information about the funding opportunity, including application instructions and deadlines, is available at FedConnect.net under the title “DE-FOA-0000451 Clean Cities FY 2011 FOA.”

June 2011

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EFFECTIVE COMMUNICATION

ENHANCES FLEET BY THI DAO

hile the image of fleet management has improved, many still don’t know about its importance — or sometimes, its existence. Through effective communication, fleet managers can put their industry on the radar.

HOW IMAGE IMPACTS OPERATIONS Fleet maintenance is not “throwing parts” at a vehicle; it’s not a simple task everyone can do. Fleet is an integral part of government operations that requires

AT A GLANCE Some communication methods for improving fleet image include: • Engage with the public through the media, fairs, and tours. • Keep an open line of communication with user departments and supervisors and provide them with facts. • Promote recognition of fleet achievements to public officials. 16

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tions that I’ve run into is that we’re training and knowledge of technolnot really accredited or educated ogy, but some still think of it as a like other management positions, “dirty garage.” It’s important, then, that we’re basically just running that fleet managers lead the way the maintenance side of things.” in informing citizens and officials And then there are those who about fleet operations and dispel KIBLER are misinformed about fleet. People, possible myths. mostly males, “tend to consider Some fleet managers report that the public is aware of fleet operations. themselves mechanically inclined, even “Vehicle-related issues resonate — for if the only repair they’ve ever performed example, the average citizen can relate to on their personal vehicle is changing a flat the concept of a take-home vehicle and [tire] or engine oil and filter,” said Stephen Kibler, ACFM, fleet manager for what it is worth because they know the City of Loveland, Colo. “They what it takes to buy, maintain, and witness a government vehicle sitting fuel their own vehicle,” said Rick in a parking lot and assume all city Hilmer, CAFM, fleet administravehicles are underutilized.” tor for Prince George’s County in It’s also seen as a non-professionMaryland. al department. “They think it’s still Others haven’t had the same exIVY a ‘grease monkey’ operation,” said perience. “I think the public generally doesn’t have much of a view about us Ernie Ivy, director of fleet management because they don’t know we exist,” said for the City and County of Denver. “Many Gary McLean, fleet manager for the City people don’t realize how highly technical of Lakeland, Fla. “Common mispercep- this profession has become.”

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Increasing professionalism is helping drive fleet management out of the “dirty garage” stereotype. Effective communication with public officials, citizens, supervisors, and customers can further improve the image of fleet operations.

When others see fleet management as a replaceable or less-than-professional service, it makes it an easier target come time for budget reviews, budget cuts, and talks of outsourcing — making it all the more important to communicate the role fleet plays in government services.

ASSERTING THE IMPORTANCE OF FLEET How can fleet management assert the importance of fleet? Consider highlighting the following facts: Expertise: “Like most municipalities, our fleet is made up of 28 different classes of vehicles and equipment,” Kibler said. “The misconception is that the local lube shop can service a fire truck for their $29.99 special.” Ask any local shop and chances are, they don’t service the variety of equipment fleet management does. Make sure people know this — Loveland’s local shop doesn’t service equipment, and officials didn’t know it.

Thoroughness: “Break it down to man said. “Public fleets are natural trial the apples-to-apples comparison,” Kibler and pilot locations for new technologies. continued. Compare a local shop’s in- Fleet managers can play a critical role in spection task list with fleet management’s both testing new technologies as part of inspection list. “When you lay them side- active operations, and in using their pubby-side and compare them for somebody lic status to promote and educate the pubwho is not familiar with the industry, the lic about them.” difference is obvious. We’re much more Considering the crucial role fleet thorough, much more precise in measure- plays in government operations, how ments,” he said. can fleet managers convey this message Not-for-profit: Keep in mind that to others? The key is to communicate fleet management doesn’t need to make effectively with core audiences: public a profit, but private shops do. “We don’t officials, citizens, supervisors, and user have to make a profit, so we have always departments. had lower prices,” Ivy said. Essential: There’s no denying fleet INFORMING PUBLIC OFFICIALS has a huge impact on government opInforming decision-makers about fleet erations. “Fleet operations are among the operations is essential. When it comes most visible and direct of government time to make decisions regarding fleet services. Garbage pickup, snow remov- services, it’s best that they’re as informed al, policing, emergency and ambulatory as possible and know that fleet is more response, street repair, and tree main- than just a bottom-line number. tenance are just a few of the street level Lead Tours: Facility tours are an efpublic services that rely extensively on fective way to inform others about fleet specialty vehicles and operators for their management, and many fleets have aldelivery,” said Keith Kerman, assistant ready taken advantage of this method. commissioner, Citywide Operations, City Sam Lamerato, CPFP, fleet mainteof New York Parks & Recreation. nance superintendent, City of Troy, Mich., “Fleet serves as part of the infrastruc- has been offering tours for about seven ture in which nearly all other departments years, to City Council members, adminrely,” added Gary Lykins, fleet mainte- istrators, and the public. The City holds nance director of the Town of Jonesbor- two to three tours annually. They start in ough, Tenn. the early evening, during a regular shift, Kibler noted the importance of pre- and include a light dinner, a PowerPoint ventive maintenance (PM), which, while presentation, and walk-through tour and essential, may be one of the first services live demonstration to meet technicians targeted during budget cuts. “PM is direct- and see them in action. “The technicians demonstrate repairs ly related to delivery of cost-effective serthey’re making, different types vices to citizens,” Kibler said. When of diagnostic equipment that are vehicles fail in the field, services do needed, and that we own or need to not get done. purchase to do our jobs much more Alt-Fuel Leader: Many fleets efficiently,” Lamerato said. “When are testing out the latest alt-fuel technologies. “Public fleet managwe write ad memos for this type of ers have a unique and important LAMERATO equipment, diagnostic equipment opportunity to lead the nation in or replacement of vehicles, the the transition to alternative fuels,” Ker- City Council [members] can reflect back Government Fleet

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COMMUNIC AT ION on their tour and put that knowledge for- full chain of management, he said. ward and tell the other Council members The Denver fleet also shares its busiwho may not have been in our tour the ness plan that includes a SWOT (strengths, importance of what we do here.” weaknesses, opportunities, and threats) Ivy from the City and County of Denver analysis comparison to outside sources. calls new appointees overseeing fleet with Brian King, fleet manager at the State of a personal tour invitation, and he Oregon, has attended various state says they almost always accept. Durlegislature meetings and hearings ing the tour, “we explain to them all at this year’s session to provide tesfacets of how fleet operates. They’re timony on bills or proposed bills and all impressed, and then they underto answer questions that arise about stand more of how we operate,” he fleet. By speaking to him directly, KING said. In fact, he recalled, one new legislators can get first-hand, accudeputy mayor was so enthralled with rate information. “That education is fleet operations, she stayed for five hours important as well,” he added. “Any informa(usually a three-hour tour). tion that our officials can learn that dispels Personifying fleet services is a goal of some belief they have that is not based on facility tours. Ron Crowden, fleet manager valid data is important to get across.” for the City of Augusta, Ga., said during Another way to provide information to tours, officials “can see what their $5.4 a group during a critical time is during the million budget is paying for, and it gives City’s budgeting process. At the City of them a chance to ask questions. This helps Lakeland, McLean uses that opportunity build rapport and trust, and they can put a to “fire-hose PowerPoint shows, talking name with a face.” papers, and anything else I can get in front Promote Recognition: According to of our upper level leadership and elected Kelly Reagan, fleet administrator for the officials about how we develop our billing City of Columbus, Ohio, promoting achieve- processes, why things cost what they do, ments to City Council is one way to com- and the level of support we provide to our municate the importance and excellence customers for the money,” he said. of the fleet department. “When we have a Cooperate with Other Departments: time of recognition for our employees, we The State of Georgia self-insures for all always invite City Council, and we include lines, so fleet management has a direct imthem in recognition ceremonies. They are pact on agency and state funds, according the ones recognizing the employees from to Ed Finnegan, director, Office of Fleet the floor and giving out awards, acManagement for the State. “I have colades, letters, and handshakes,” he tried to connect Fleet with Risk, said. “And as you include City CounSurplus, and Purchasing by demoncil members, you begin to educate strating the interdependence and the them on your processes.” Reagan efficiencies produced by cooperation,” he said. “This has allowed the added that asking for a resolution of recognition to be voted on by the REAGAN Office of Fleet Management to have input with legislators and the Office Council further puts a success story in front of Council members. Achievements of Planning and Budget.” can include ASE (Automotive Service Excellence) Blue Seal and EVT (emergency COMMUNICATING WITH CITIZENS vehicle technician) certifications, and 100 Promoting fleet services to officials Best Fleets inclusion. can go hand in hand with promoting it Provide Information: In addition to a to the public. At the City of Columbus, a tour of the facility and meeting staff, Mark tour with Councilwoman Priscilla Tyson Crawford, fleet services manager of San- led to excellent results: “Councilwoman dia National Laboratories Fleet Services in Tyson wants the message to go out to the Albuquerque, N.M., schedules a presenta- community that good things are happening tion about fleet activities to allow officials in the division of fleet for the City of to ask more in-depth questions. “There are Columbus,” Reagan said. She suggested a several presentations to the different man- hearing date so that fleet management can agement levels and officials” to get to the tell its story to the general public. 18

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FLEET FROM ANOTHER PERSPECTIVE

ary Kerwin, mayor pro tem for the City of Troy, Mich., was first introduced to fleet services through the Fleet’s Citizen’s Academy in 2001. With 15 years as KERWIN a policy maker, Kerwin at the time of her tour was on the board of education. Kerwin now works to approve funding for departments including fleet services. With the knowledge gained about fleet through her tour, she is able to make more educated decisions. “If I just sat at council and read a series of numbers, facts, and figures, I think I would be far more removed from recognizing what is paramount to the fleet maintenance division, which really is quality of work, teamsmanship, and cooperation,” she said. During her tour, she was able to witness firsthand the processes and complexity of servicing a vehicle, from preventive maintenance to repairs to handling advanced technology in vehicles, she said. “It’s far more than changing out a tire or making a small repair. It’s in both prevention and breakage, in keeping well-maintained equipment, and the value [fleet] adds because they are so diligent and careful in everything they do. You would never read that from a list of columns [on a budget].”

The City of Troy’s Citizen’s Academy tours, capping at 18-20 participants per tour, has a waiting list. The City fleet also has special tours, such as for older Girl Scouts approaching legal driving age. Fleet put together a program for them to demonstrate the importance of changing oil and doing a safety inspection before they go on a trip; how to check tire pressure; and how to change a tire, wiper blades, and a tail light bulb. “It’s an educational program. I really think fleet managers and fleet operations need to go out and show the public what they’re all about,” Lamerato said. The City of Lakeland has raised awareness with an “all-out media blitz” that includes face-to-face meetings with customers, leadership, elected officials, and vendors on a regular basis; a bi-monthly

June 2011

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COMMUNIC AT ION public exposure is through our air online newsletter published on the City’s efforts. At its booth, fleet has altquality efforts,” he said. internal website; communications through fuel and hybrid fleet vehicles set up, Keith Condra, director of fleet an internal Fleet Management Web page; and it gets plenty of traffic coming management at the Town of Fishers, and seeking out local media on fleet’s ef- through. “It’s an opportunity for my Ind., is also working on writing arforts to do things “cheaper and better,” ac- [team] to be in the front line and talking to the public about what we ticles in internal and external newscording to McLean. CONDRA letters to publicize fleet. “Keeping In public outreach, Lakeland held a do,” King said. Daniel Nuckolls, CAFM, fleet information in the forefront will Public Works night in its downtown park. “We’ll be doing public outreach to edu- services director at the City of Concord, keep people thinking about the importance cate the citizens on fleet, what we do, and N.C., said public outreach includes pub- and value of this division,” he said. licizing successes within the fleet what we do well. We’ll be passing When there are complaints or questions department by including articles in from the public, it’s best to answer promptly. out information, having contests, City Circular Magazine, the citizen King said he is always responsive when reall kinds of stuff,” McLean said. newsletter, and press releases for lo- ceiving inquiries or complaints that come di“We just keep talking and hope cal newspapers. “I find the citizens rectly to him about State of Oregon fleet vethey’re listening.” most informed about fleet issues hicles. “In some cases, we are able to explain The State of Oregon’s fleet management division attends the NUCKOLLS are those concerned with the envi- questionable situations about why a State ronment, hence the importance of vehicle might be at a certain location,” he state fair each year to promote and educate the public about its sustainability that aspect of our jobs. The bulk of fleet’s said. Being receptive to the public increases accountability and, at least for that citizen, raises the esteem of fleet management. A WORD FROM THE SUPERVISORS

ave Bush, assistant director of finance and management at the City of Columbus, Ohio, who directly oversees the fleet division, says he’s seen a change in the past 25 years in the image of fleet management — from “dirty and grungy” to “mechanics with more formal training than a lot of other disciplines. These guys are pretty knowledgeable, and their diagnostics require them to use sophisticated technology,” he said. With fleet a division under finance and management, Bush said BUSH this has led to some operational efficiencies. Fleet is more tied to the budgetary process; for example, fleet is able to directly tell finance that replacing a unit or equipment is cheaper than maintaining it, and finance is able to get a early report on how vehicle replacement funding will be spent before it’s even presented to others. “We’re doing our homework on the front end, so we’ve been able to move vehicle purchases more quickly,” he said. Jim Greene, deputy city manager for the City of Concord, N.C., is the direct supervisor above the fleet services department, in addition to eight other departments. He thinks face-to-face interaction is the best method of communication. He and the fleet director have drop-in meetings a few times a week, in addition to e-mails and phone calls. Scheduled monthly meetings with the city managers and department heads allow the fleet director to discuss Council agenda items and other City issues, he said. GREENE “E-mails are good and are sent often by Fleet Services to keep me informed on operations, but I find the face-to-face contact through informal drop-ins and formal staff meetings to be the most effective in communicating issues and concerns,” he said.

SUGGESTIONS TO IMPROVE FLEET IMAGE To enhance fleet image, Bush at Columbus warned fleet managers against being esoteric. Make sure the audience understands what ASE and EVT certifications mean, what it means to be named among the 100 Best Fleets, and what certain awards entail. “We’re trying to be mindful that our audience is not in the industry,” he said. Greene suggested to “get your fleet staff involved and out of the shop.” At the City of Concord, the fleet director serves on and helps lead teams, is a presenter to leadership groups, and is involved with classes that introduce citizens to local government, Chamber committees, and civic groups. The fleet team also conducts facility tours. By reaching out to citizens, fleet can enhance its image and inform the public about the service. “To be successful in educating the public, city management should support and encourage those community relations efforts for fleet services,” Greene said. 20

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TALKING TO USER DEPARTMENTS AND SUPERVISORS In communicating with supervisors, Kerman at New York Parks & Recreation reported better communication than in the past. “At Parks, we ensure that fleet operations and performance metrics relating to the fleet are presented as part of all senior management meetings,” he said. “Our agency culture recognizes now how critical these services are to all our core endeavors, and we engage all senior staff in discussing them regularly.” While some fleet departments may have a direct supervisor knowledgeable about fleet, this can decrease as communications go up the chain of command. “Do not assume any given superior or official has more than a cursory knowledge of your duties,” Lykins of Jonesborough said. Arm yourself with facts. Cite statistics when providing information, and when writing reports, use facts and avoid opinion. A well-informed fleet manager can enhance the image of fleet operations. “With every problem or concern, I try to bring solutions and continually try to show our savings, needs, and improved service,” Condra of the Town of Fishers said about communications with his supervisor. Customer service cannot be emphasized enough when communicating with user departments. “Internal departments have to be viewed like any customer that a

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COMMUNIC AT ION private shop has; professionalism, courte- using Fleet Services,” he added. “We also trained fleet managers have the potential to sy, cost-effective repairs and maintenance, have an intranet page with pertinent infor- save their local governments a lot of monand being available for any emergency mation and links. Replacement schedules ey,” Nuckolls of the City of Concord said. situation [are important],” said Jim and other reports are provided on “That really is big news, and programs… Miller, fleet supervisor, City of a routine basis.” Finally, he makes that highlight such accomplishments Sioux City, Iowa. sure staff is familiar with the fleet should be shamelessly employed.” Show user departments respect Another reason to publicize good news: management system, so anyone can and understand that “you are comprovide needed information when “The precarious image of the fleet manmunicating with peers,” Lykins addrequested. This improves the pro- agement department is proportional to the ed. Use good manners and work the fessionalism of fleet services and most recent failure,” according to Lykins LYKINS “soft sell” when raising potentially of Jonesborough. streamlines customer requests. Continued education and overall precontroversial issues such as right-sizing For New York Parks & Recreation, equipment or not replacing under-utilized transparency and service are key. “We sentation are other big factors in increasing equipment. “When they have issues, ask developed an online tool called VOOS, professionalism and the fleet image. “Fleet to go to the jobsite and see firsthand how vehicle out of service tracking, that en- staff, especially in the public sector, needs fleet management may better assist them,” ables customers to create vehicle work or- to modernize in presentation, computer he said. ders on their own, receive regular e-mail literacy, shop appearance, and customer King at the State of Oregon said shar- updates on service, and check the fleet service,” said Kerman of New York Parks ing data with user department managers history for their vehicles,” Kerman said. & Recreation. “Educate yourself and never stop learncan help inform them about their fleet “Through this means, we communicate costs and alternatives. Toward the end of to all staff, senior and junior, about the ing. Trade magazines and forums are a last year, he and his supervisor met with status of their fleet [vehicle] and offer im- great source of self-education,” Lykins said. “New information can often be the heads of larger user departments to edu- proved transparency and service.” catalyst for procedural improvements. It cate them on their fleet vehicle costs. For is in the best interest of the fleet manager many, it was an eye-opening experience. ENHANCING FLEET IMAGE In addition, common courtesy can go Many methods can be used to enhance and the organization one serves to be on a long way. Engage the customer, Lykins fleet image, and it’s up to the fleet man- the cutting edge of what is going on in the advised. This can be as simple as asking ager to toot his own horn and that of the industry.” When it comes to talking about fleet, the driver how equipment is function- division. McLean of Lakeland emphaing when passing them in the hallway, sized certification, accreditation, and vis- some may find themselves tongue-tied. or following up with a phone call after a ibility. “Fleet managers need to get used “We should help fleet managers present major repair, or forwarding on an article to talking themselves up and getting into their important role to others and improve relevant to that department’s operation. the limelight a little bit.” He added that their ability to discuss and educate on their “When engaging the customer, be ready competing for awards, writing for trade trades and to communicate to their custo hear the good with the bad, and always publications, and joining professional or- tomers,” Kerman said. “The role that fleet plays in maintainfollow through with any actionable is- ganizations besides fleet-related entities ing safety needs to be stressed at all times. sues that may arise during these engage- are also effective. ments,” he said. Industry-recognized certifications, such We are part of the public safety infrastructure of the County,” said Hilmer of Nuckolls at the City of Concord con- as the ASE Blue Seal or CAFM and Prince George’s County. tacts department directors via e-mail, CPFP designations, and awards and Finnegan at the State of Georphone, or personal visit “on matters deal- contests, such as Government Fleet’s gia recommended partnering with ing with any abnormal maintenance issues, Public Sector Fleet Manager of the the safety department or risk manspecifications, vehicle requests for budget- Year and Environmental Leadership ager to highlight and improve fleet ing, vehicle purchases, accidents, and fuel Award, as well as the 100 Best Fleets usage,” he said. He sends out a Fleet News program, are some ways to increase FINNEGAN safety. “Make their goals consistent with yours and then share in that e-mail every month that includes fuel use professionalism and exposure, and success,” he said. reports, vehicle miles traveled, and items can be used as a promotional tool. Something seemingly minor as personVarious agencies use these forms of of interest. Keep often-asked questions and re- recognition to put their staff in front of al presentation may make a big difference quests handy, Nuckolls advised. “The pre- elected leadership. Oftentimes, it will get in image. “In my case, the answer might be pared fleet manager keeps these things at recognized by the mayor, who may issue a to wear a tie more often,” Nuckolls stated. Finally, while cultivating a professional his fingertips because they are the ‘heart- congratulatory press release, or will lead to a celebratory event, such as the luncheons image is an important part of fleet operabeat’ of any fleet. tions, good quality and on-time work is es“We have developed a user’s guide that held by City of Columbus fleet. “Make a name for your organization sential. “Half the battle is relationships — operators can keep in their vehicles that will answer most questions that arise about locally, statewide, and nationally. Properly the other half is results,” Nuckolls said. 22

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reliability

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LIABILITY RISK FOR

GOVERNMENT FLEET

ORGANIZATIONS

UNDER CURRENT LAW AT A GLANCE Important items fleet managers should be aware of in regards to negligent entrustment include: • Negligence, the most common tort, has the most risk for fleet managers, since negligence awards can be very large. • To bring a negligence case against the federal government, the claimant must have been damaged by the negligence or wrongful act of a federal employee acting within the scope of his or her employment in circumstances where a private person would be liable under the law of the state in which the negligence or wrongful act occurred. • Most states have adopted individual state tort claim acts. • Municipal and local government liability for negligence of their employees generally follows the law of the state in which the local entity is located. 24

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Most people no longer bat an eye when hearing about multimillion dollar damage awards to punish companies for an employee’s negligent acts. However, what are the liability concerns for a public sector fleet manager? BY JANIS CHRISTENSEN, CAFM

f all the many issues for today’s fleet manager, negligence bears the most risk, particularly in the case of the corporate fleet manager. For example, what if, in the eyes of a court of law, the acts of the fleet manager or fleet department are not consistent with the standards in the fleet industry? Under today’s legal system, the corporation may be held liable for negligence under civil law. In certain instances, even the corporate fleet manager could

be held liable under both criminal and civil bodies of law. What about the government fleet manager? Does the doctrine of sovereign immunity shield governments from tort liability, and to what extent could a government fleet manager be individually sued or separately sued in a civil suit? Moreover, what rights are due to persons suffering losses as a result of the negligence of government employees? The purpose of this article is to answer

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LIABILITY RISK these questions and help federal, state, municipal, and local government fleet managers understand what liabilities they face resulting from the negligence of their employees. The basics of tort law are explained to provide government fleet managers an understanding as to how various immunity laws differ within various government jurisdictions.

WHAT IS TORT LAW? Before discussing liability for the government fleet professional, a basic background in tort law is helpful. A “tort” is a civil wrong. West’s Encyclopedia of American Law defines “tort law” as “a body of rights, obligations, and remedies

that is applied by courts in civil proceedings to provide relief for persons who have suffered harm from the acts of others.” Negligence, the most common tort, has the most risk for fleet managers since negligence awards can be very large and fleet managers deal with a subject that is inherently dangerous — the operation of a motor vehicle. Negligence is based on a duty of care. When one engages in any activity, that person is under a legal duty to act as an ordinary, prudent, reasonable person would act. It should be remembered that negligence law is, at its base, a way to spread risk fairly. So it is logical that courts tend to stretch the scope of negligence liability

REPRESENTATIVE CASES

o illustrate the potential liability facing government fleet operations, the following are some representative verdicts and settlements awarded to plaintiffs: 1. Federal: $450,000 verdict; U.S. District Court Judge Thomas Penfield Jackson ruled in favor of a plaintiff, who suffered back and knee injuries after his van was rear-ended by a U.S. Postal Service truck. Source: www.chaikinandsherman.com. 2. Federal: $600,000 verdict; plaintiff was riding a motorcycle when a U.S. Postal Service truck negligently pulled out from a stop sign in front of plaintiff, who suffered major fractures and injuries. Source: www.chaikinandsherman.com. 3. California: $13,820,000 verdict; Garcia v. Los Angeles County Metropolitan Transportation Authority. Joseph Garcia, a 56-year-old unemployed passenger was traveling on an LACMTA bus that collided with a parked car. Garcia suffered severe brain damage and hemiplegia of his left side. He successfully argued that the LACMTA was negligent by inadequately training the bus driver (she failed to maintain the required minimal clearance from parked vehicles four times during training). Source: www.greene-broillet.com (Greene, Broillet & Wheeler, LLP). 4. California: $7,675,000 verdict; Tartakoff v. City of Los Angeles. A 41-year-old woman was paralyzed when the car she was driving was struck by a car traveling up to 100 miles an hour fleeing from police. She successfully alleged the police were negligent in chasing the suspect without lights or siren. Source: “Jury Awards Paraplegic $7.65 Million From City,” Jane Fritsch and Charisse Jones, L.A. Times, March 29, 1990. 5. Missouri: $3 million jury verdict; Alnita Smily, 21, was awarded $3 million in her suit against the City of St. Louis. She successfully argued that a marked City truck negligently made a right turn on a red light, causing her to swerve to avoid a collision and crash into parked cars. The crash resulted in serious head injuries, a severed ear, and back injuries. Source: “Jury Orders St. Louis to Pay $3 million Over Crash,” Valerie Schremp Hahn, St. Louis Post Dispatch, November 12, 2010. 6. New York: $1.6 million jury verdict; plaintiff suffered injuries in auto accident caused by municipality failing to maintain safe road conditions (stop sign blocked by trees and shrubs). Source: www.friedmanhirschen.com. 7. New Jersey: $31,295,007 verdict; Nicholas Anderson, 18, was driving his car in Camden County when a driver going in the opposite direction, into his lane, caused him to swerve onto the shoulder, which was six inches lower than the highway. Unable to drive back, he went out of control, hitting the guardrail. The guardrail penetrated his car and severed his left leg. He suffered other significant injuries. At trial, it was shown that the County knew of the dangerous conditions of the shoulder and guardrail but pursuant to its policy of not fixing safety conditions until there is an accident, did nothing to correct the unsafe condition. Source: www.feldmanshepard.com. 26

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to cover innocent injured parties when a defendant is negligent. The applicable standard of care is the reasonable person standard of ordinary prudence under similar circumstances. For fleet professionals, it is judged as what the reasonable, prudent fleet professional in the field of fleet management would do under similar circumstances. Generally, for an organization to assume negligence liability for the acts of the fleet or fleet department, the court must find the fleet organization’s behavior was not consistent with the standards in the fleet industry. As an example, if a driver is involved in a crash, and the other party claims the driver was not competent to operate the vehicle and the organization was negligent in hiring the driver, the standard of care would be whether the fleet department (or other responsible organization) properly checked driver motor vehicle records, had reasonable safety programs, had appropriate and current driver policies and procedures, etc., consistent with other similar fleet organizations in its geographic territory. The employer can be held liable for negligence either directly due to the employer’s negligence (e.g., negligent entrustment, negligent hiring, negligent supervision, negligent training) or under the doctrine of respondeat superior (vicarious liability). The Restatement of the Law – Agency Third in Section 2.04 defines respondeat superior as follows: “An employer is subject to liability for torts committed by employees while acting within the scope of their employment.” The negligence or fault of the employer is not an element of the respondeat superior claim. To this end, if the employee has no liability, then the employer can have no vicarious liability.

WHAT IS SOVEREIGN IMMUNITY? The doctrine of sovereign immunity has its roots in English common law, adopted at the founding of the United States. Sovereign immunity in England was based on the doctrine of the “divine right of kings” and that the king “could do no wrong.” As English law evolved, it became established that the king could not be sued in his own courts. The federal government and new states of the United States adopted the English doctrine of sovereign immunity, holding

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that the federal government or states are not liable in tort without their express consent. The famous Judge Oliver Wendell Holmes said in Kawananakoa v. Polyblank (205 U.S. 349, 353, [1907]), “[a] sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on the logical and practical ground that there can be no legal right against the authority that makes the law on which the right depends.” The doctrine of sovereign immunity shielded governments in the U.S. from tort liability until relatively recently. Generally, the only way for a victim of government negligence to be compensated was for Congress or a state legislature to pass an individual act compensating the victim. However, beginning in the 20th century, the trend of tort law was to compensate the victims of tort liability by enterprise acts and distribute their losses among the beneficiaries of the enterprise. This trend ran directly into the accepted doctrine of sovereign immunity. Persons suffering losses due to the negligence of government employees generally were left without a remedy.

WHY IS THE FEDERAL TORT CLAIMS ACT IMPORTANT? In 1946, the federal government enacted the Federal Tort Claims Act (FTCA), the most important piece of legislation affecting government immunity. Under the FTCA, the federal government can only be sued “for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act of omission occurred,” (28 U.S.C. Section 1346[b]). The FTCA did not do away with sovereign immunity; rather, it created a waiver of sovereign immunity under specific circumstances. The federal government, under the FTCA, specifically consented to be sued for negligence under the conditions specified in the Act. To bring a negligence case under the FTCA, the claimant must have been damaged by the negligence or wrongful act of a federal employee acting within the scope of his or her employment in circumstances 28

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where a private person would be liable under the law of the state in which the negligence or wrongful act occurred. The U.S. Supreme Court has held that the FTCA is to be liberally construed (Black v. Neal, 460 U.S. 289, 298 [1983]). The FTCA grants exclusive jurisdiction to federal district courts and limits remedies to monetary damages only (no punitive or exemplary damages). All federal agencies and instrumentalities (such as the post office) are covered. A key limitation is that liability only attaches if the federal employee was acting within the scope of his or her employment when the act occurred. This does not mean whether the employee had the authority to act, only whether he or she was carrying out the business of the government. A second key limitation is that the government is liable only if it would be liable under state law if it were a private person. It should be noted that numerous procedural rules apply to an FTCA claim: • The claim must be filed first against the agency involved within two years of the negligent act. • The agency has six months to accept the claim or reject it. • If the agency rejects the claim or does not decide within such six-month period, the claimant may sue. • All suits must be brought in federal district court in the venue where the plaintiff resides or the negligence occurred. All suits under the FTCA are exclusively against the U.S. and not the individual employee or agency involved. In fact, if the employee was acting within the scope of employment, the employee cannot be individually sued or separately sued in a civil action. Applying the FTCA to federal government fleet operations, if a fleet driver is negligent while performing duties in the scope of his or her employment, the FTCA waiver to sovereign immunity will apply and the federal government will be subject to suit for monetary damages. And in government fleet operations where large fleets of trucks and vehicles are operated, the potential liability for the federal government is large. For example, two representative cases noted in the sidebar [Representative Cases on page 24] contain rulings against

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LIABILITY RISK

Between $450,000 and $31 million in settlements are detailed on page 24, illustrating the liability facing government fleet operations due to accidents and alleged negligence.

the federal government. In both cases, the U.S. Postal Service was found negligent resulting from the acts of the USPS drivers. Monetary damages ranged from $450,000 to $600,000.

INDIVIDUAL STATE TORT CLAIMS ACTS The picture is not as clear under state law. Most states have adopted individual state tort claims acts, many patterned after the FTCA. However, the majority limit recovery under the individual state tort claims act. The National Conference of State Legislatures (NCSL) compiled a comprehensive list of all state tort claims acts (see www.ncsl.org). According to the NCSL, at least 33 states limit or cap recovery under their respective state tort claim acts. The balance of the states and the District of Columbia, following the FTCA, do not limit or cap recovery. Some states cap recovery as low as $100,000. Florida, for instance, capped recovery at $100,000 for individual and $200,000 for claims until October 2011, when the caps will be increased to $200,000 and $300,000. Illinois and Massachusetts, for example, cap recovery at $100,000, except for negligence involving motor vehicles, which are not capped. To understand what liabilities state gov-

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ernment fleet operators face, fleet professionals must understand the specific waivers to sovereign immunity adopted in their states. As with the FTCA, the individual state tort claims acts have varying administrative procedures that must be followed in order to assert a claim. It is imperative that the claimant and the potential defendant (public fleet organization) understand the specific procedures in their state. Municipal and local government liability for negligence of their employees generally follows the law of the state in which the local entity is located. By way of illustration, a number of state and local government cases are provided in the sidebar (page 25). Two cases against the State of California, in particular, reflect the significance of potential fleet-related verdicts decided in favor of the plaintiff. In one case, the judge found the Los Angeles County Metropolitan Transportation Authority negligent for failing to adequately train a bus driver; damages amounted to almost $14 million. A second case against

the City of Los Angeles, also decided by a judge, levied $7.7 million against the City for negligence involving a police officer vehicle chase. Not to be outdone by California, the City of St. Louis was recently found negligent in a jury verdict award of $3 million after a City driver negligently made a right turn on a red light, causing the plaintiff to crash into parked cars. Finally, although not caused by the negligence of the fleet vehicle driver or even the fleet organization, the State of New Jersey was found negligent for damages exceeding a whopping $31 million as a result of adopting a policy to not repair a knowingly dangerous condition until an accident occurred. All of these cases are evidence of the potential cost of damage awards even though punitive awards are not permitted. For more details, see sidebar “Representative Cases.”

WHAT DOES THIS ALL MEAN? While individual government employees or agencies may not be held responsible for their own acts or the acts of their

employees, it is still expected that the fleet organization and its drivers practice the applicable standard of care that is reasonable for the circumstances in play. In essence, it is practical to expect that innocent injured parties will seek damages (and often be successful) against a negligent defendant, even if that defendant is a government entity. Consequently, the fleet manager should be responsible for exercising due care to protect the governmental entity and its tax-paying constituents against large, avoidable negligence damage awards and the resulting negative publicity. Government fleet managers, therefore, should understand the doctrine of sovereign immunity, the FTCA, and individual state tort claims acts as appropriate for their governing jurisdiction. ABOUT THE AUTHOR Janis Christensen, CAFM, is director of Corporate Fleet Consulting Services at Mercury Associates, Inc. She can be reached at jchristensen@ mercury-assoc.com.

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LOW-COST OR NO-COST

GREEN FLEET STRATEGIES

A variety of easy approaches can yield quantifiable results in greening a fleet, including avoiding unnecessary travel and using alternative-fuel vehicles. Tactics used by the states of West Virginia and Oklahoma are shared, including leveraging existing state natural resources. BY BARBARA BONANSINGA

ost-efficient, green, sustainable, and earth-friendly — do any of those words describe your fleet? Fleet managers are swimming in a sea of change, with the very core technologies of the industry changing rapidly. Internal combustion engines are still a mainstay of fleet, but to some degree are being replaced by varying types of powertrains that utilize fewer, different, or “less-scarce” resources. Among the many reasons to conserve finite resources is cost, particularly due to ever-tightening budget constraints. Other reasons include: protecting the

AT A GLANCE The States of West Virginia and Oklahoma are presented as examples for low- and no-cost ways to green a fleet. Suggestions include: • Pilot programs before making large-scale changes. • Match alternative-fuel use to the fleet. • Leverage state natural resources. • Integrate sustainability efforts with strategic objectives. 30

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planet from harmful emissions, using local resources that also promote local economies, and reducing dependence on products when availability is finite or threatened. The recent conflict in the Middle East underscores the importance of becoming more energy independent. Some business and government entities have stepped up their planetary stewardship and conservation because they view it as the right thing to do. Why use up all of one resource if there is a limited supply available? The health benefits of some of the emerging transportation alternatives are attractive as well. Walking and biking, although not always feasible as components for business travel, provide obvious benefits for the health and well-being of citizens and employees. Employers may also look at how employees travel to and from work, incorporating that into the scope of a fleet’s environmental policies. Healthier and happier employees can contribute to productivity and the all-important bottom line. For purposes of this article, “green”

is defined as conserving finite resources, economical, or free. No-cost/low-cost can mean a “green” project has no initial cost or that the initial outlay is easily recouped by the return on investment.

AVOID UNNECESSARY TRAVEL Policies may be one of the best examples of low- or no-cost methods if they do not require funding to implement. If fleet implements a policy to reduce trips to “Point A” from three times per week to twice weekly, there is no investment cost. As another example, if $300 is invested per vehicle to install GPS devices resulting in a $350 fuel savings due to reduced speeds, more efficient routing, and lower overall miles, that would be considered low cost as well. The first steps in fleet efficiency and greening go hand-in-hand: eliminating or reducing unnecessary travel miles. Let’s call that “travel avoidance.” This is not to say there is anything wrong with travel — in fact, it is the heart of our business. However, if you can reduce the number of miles employees must travel in positive

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ways, travel costs decrease, as do the fuel consumption and emissions produced. Perhaps eliminating travel isn’t feasible, but reducing the miles traveled is. Finally, when we’ve cut non-essential travel and reduced miles traveled with various types of efficiencies, the focus can shift to using the most efficient means available for the travel miles that remain. In seeking these types of efficiencies, fleets become green. Fleet professionals strive to get the most out of every dollar available for their budgets, fuel being a primary component. They are generally engaged in looking for ways to use less or make a gallon of fuel go farther. Under travel avoidance, consider using communications technology in lieu of travel to get the job done. Could you use the Web and e-mail the information? What about a webinar — would it give you the access and communications capability to perform the work without the travel? Corporations and government fleets are searching for means to expand use of electronic media, such as video and telephone conferencing to meet, communicate, and complete work that otherwise would have required travel for faceto-face meetings. The menu options for electronic media are rapidly expanding. Electronic communication via social or business networking sites, such as Facebook, Twitter, and LinkedIn, are being incorporated into many businesses as well. Fleet managers are finding ways to reach out to the global community to gain information from a much larger group of experts via the Web.

USE OF ALT-FUEL VEHICLES Learning the options available for fleet managers striving to be greener can be daunting. Options abound as the industry creatively and competitively searches out newer and better green travel methodologies at a fast pace. Gas- and diesel-powered engines join a myriad of alternative- and flex-fueled vehicles including, but not limited to, those capable of running on ethanol, biodiesel, natural gas, propane autogas, a variety of hybrids, and pure electric motors, engines, and powertrains. Entirely new infrastructures must be planned, developed, and implemented to support some of these technologies.

Which way the market will turn and which technologies will prevail remains a question. It is likely multiple technologies will be tried, and possibly used, as stepping stones to what will become longerterm solutions. This leaves fleet managers faced with remaining vigilant and poised for change in a number of directions, and in many cases, with limited resources to embrace these new technologies.

WEST VIRGINIA GOES ‘GREEN’ Clay Chandler, fleet manager for the State of West Virginia, is forward thinking and has translated green fleet concepts into actions with measurable results. The State operates an approximately 9,000 vehicle state-owned or leased fleet. One of the items propelling the State’s green initiatives is the Energy Policy Act (EPAct), which requires reduced carbon footprints and mitigation of potential health hazards (Clean Air Act). The West Virginia fleet is actively engaged in seeking methods to reduce miles traveled. “We employ webinars and telephone conferencing. Whenever virtual approaches are not practical, we encourage regional meetings to minimize miles traveled,” Chandler said. He also noted the State fleet is preparing a solicitation for value-added technology, which are based on the successful results achieved during his tenure with the State of Oklahoma. For the travel miles that can’t be eliminated, Chandler said the West Virginia approach to boosting environmental or green efficiency includes “incorporating valueadded technology, controlled authorizations for special purpose vehicles (SUV, 4WD, etc.), CAFE compliance, etc.” Some examples of these strategies in practice include formally adopted weighted vehicle selection criteria. Specifics are outlined below: • The Dept. of Administration (DOA) replacement methodology will evaluate each vehicle as defined by selection criteria, using assigned weighting factors. • The model selection criteria will include vehicle life-to-date maintenance expenditures, age, accrued mileage, projected fleet revenues and expenditures, mission analysis, potential vehicle downsizing, availability on

the statewide automobile contract, alternative-fuel vehicle replacement targets, and state/federal statute and/ or regulatory requirements. • Minimum selection criteria were clearly defined for each fiscal year. Four years/100,000 miles is the standard for sedan age. Fleet also established a standard for maintenance of expenditures greater than 50 percent of depreciated value, according to Chandler. “Vehicle weight/category will be assessed and whenever possible, a smaller, more fuel-efficient variant will be selected that delivers comparable horsepower, operating range, ground clearance, and towing capability,” he said. “Manufacturer, make, and model preferences will be limited to availability using the existing statewide automobile contract. Vehicle replacement will not be deferred based solely on leasing-agency preference and must demonstrate a cost savings.” EPAct requires a vehicle replacement rate of 75 percent with alternative-fuel vehicles. Alternative fuel is currently defined as ethanol (E-85), compressed natural gas (CNG), biodiesel (B-20), liquid petroleum gas (LPG), and electricity (EV/PHEV). In West Virginia’s fleet, the following priorities will be used to leverage existing State natural resources and provide concurrent savings in fuel expenditures or reduce environmental emissions: • Priority 1: Original equipment manufacturer (OEM) alternative-fuel capable vehicles. • Priority 2: OEM vehicle where an existing EPA Certificate of Conformity exists or a small volume manufacturer (SVM) waiver is pending for aftermarket alternative-fuel conversion. Within this priority, bi-fuel conversion technology will be favored over dedicated alternative-fuel technology until and unless a minimum fuel range of 350 highway miles can be achieved using dedicated aftermarket conversion; then considered equally for use. • Priority 3: OEM hybrid electric vehicle — only vehicles that meet National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT) Corporate Average CAFE criteria: purchasing Government Fleet

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A LT ERN AT I V E- FU EL S T R AT EGI E S vehicles meeting CAFE standards for passenger cars and light trucks. The West Virginia fleet has other lowcost/no-cost green fleet concepts in the planning and implementation stages as well, some of which address fuel price spikes. According to Chandler, “Fleet is establishing a formal methodology that can be pre-approved by state’s political leadership, published, and executed by state agencies using a phased approach based on fuel prices.” The following steps would likely be taken to offset any unforeseen increases in fuel prices: • Execute an immediate moratorium on commuting in state-owned or leased vehicles. • Reassign vehicles from individual driver assignment to shared-use assignment. • Park older, less fuel-efficient vehicles

fault code capability was added to vehicles to provide information to preemptively address vehicle issues. The Oklahoma State fleet invested in telematics for 1,100 vehicles and quickly identified a significant drop in fleet mileage from 15 million to 14.4 million miles, despite the addition of more than 200 vehicles. The State’s resultant fuel cost reductions from $1.87 million in fiscal year 2008 to $1.25 million in fiscal year 2010 were a major victory. Chandler said fuel cost savings were realized despite the upward trending of the price of fuel per gallon during this period. According to Chandler, maintenance costs decreased along with use and fuel consumption, and an annual reduction of $77 dollars per vehicle was realized. Another benefit of telematics use in the Oklahoma fleet included reduced accidents. Further, Chandler feels the use of

“Fleet management’s role in State sustainability initiatives is often critical to achieving program goals in cutting energy consumption, reducing greenhouse gas emissions, and supporting good ‘planetary citizenship.’ “ — CLAY CHANDLER, FLEET MANAGER, WEST VIRGINIA

and use newer, smaller vehicles. • Institute increased driver supervision and use of route optimization technology to reduce miles driven. • Reduce idling (one hour of idling equals 33 miles driven). • Embrace value-added technology to improve driver behavior and reduce miles driven (telematics). • Develop operational plans that are based on fuel prices. West Virginia fleet is incorporating quantifiable results-based actions into its green fleet programs. Among the benefits expected for the state derived to date that Chandler points to include cost savings, health benefits, miles reduced, emissions reduced, and vehicles eliminated. Examples of cost savings gained in other states, such as Oklahoma, include a decrease from first-year return-on-investment for the use of telematics of 101 days to 44 days in its second year. Diagnostic 32

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preventive maintenance (PM) alerts keep fleet in better shape at a lower cost. Fleet experts point out comprehensive PM can reduce vehicle operating costs as much as 4 cents per gallon. Knowing when it is time for an inspection and following up with reminders to drivers impact PM inspection compliance rates. Driver behavior can be significantly impacted when the concept of telematics is introduced into fleets. Drivers tend to reduce speeds, be more vigilant of traffic laws, and reduce extraneous miles. Chandler also added that one of the reasons for the success of telematics is Oklahoma’s approach to it has been non-punitive. He considered buy-in at all levels of an organization key to its success, particularly buy-in among drivers. State government fleets generally represent a significant portion of an entity’s overall energy consumption; thus, fleets have been put in the forefront of efforts to en-

hance “planetary citizenship,” as Chandler described it. Chandler considers knowledge sharing an all-important component to successfully establishing and maintaining a green fleet. He considers it their mission to share knowledge and experience about fleets’ impact on the environment with the taxpaying public for transparency. In support of knowledge sharing relating to the fleet’s sustainable fleet strategy, Oklahoma provides citizens information that includes responses to such questions as: “Have you ever wondered what impact the state’s vehicle fleet has on the environment?” Chandler explained, “Fleet management’s role in state sustainability initiatives is often critical to achieving program goals in cutting energy consumption, reducing greenhouse gas emissions, and supporting good ‘planetary citizenship.’ ” Assuming each vehicle drives at the speed limit and logs 18,000 miles annually: • Each compact car emits 5.31 tons (10,620 lbs./carbon dioxide annually). • Each mid-sized car emits 9.9 tons (19,800 lbs./carbon dioxide annually). • Each SUV or pickup emits 14.43 tons (28,860 lbs./carbon dioxide annually). The total effect on the environment, based on a 9,000 state-owned or leased vehicle fleet: 87,066 tons or 174,132,000 lbs. of carbon dioxide (CO2) emitted annually. Even during budget-constrained, bottom-line-wary times, each state must continue to pursue green fleet measures, especially those that can have an immediate impact on agencies’ budgets. Chandler considers the State of West Virginia to be fuel-neutral in its support of green vehicles and technologies. “Fueled by federal regulation (CAFE), the State’s strategic procurement processes include, whenever available, the integration of alternative-fuel vehicle engine options across the statewide automobile contract categories.” Chandler believes the approach provides latitude to user agencies to help formulate their fleet energy mix. “For those agencies that prefer hybrid or ethanol technology, the state continues to award OEM E-85 and hybrid fuel types whenever possible. As a result, the State has banked EPAct credits that can be used to ensure future regulatory requirements are met.”

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Concluding, Chandler offered some words of advice for other fleets embarking on the development or continuation of no-cost/low-cost green fleet strategies: 1. Learn before you leap. Pilot programs using a small number of vehicles can validate agency assumptions about which technologies best support the agencyâ&#x20AC;&#x2122;s mission and budget. 2. Match the fuel to the fleet. States often require fleets with multiple vehicle fuel types, and even combinations of fuel types. â&#x20AC;&#x153;We believe there are multiple technologies with abundant domestic fuel supplies that can reduce operating costs and environmental impact over time, while the State continues its efforts to establish the infrastructure needed to sustain increasing numbers of alternativefuel vehicles,â&#x20AC;? Chandler said. From pilot program experiences in other states, CNG and hybrid-electric vehicles appear to work for urban-based agency applications, particularly since the technology infrastructure is more readily accessible in major metropolitan areas.

Some states are also exploring dual-fuel vehicle categories for agencies that support more geographically dispersed citizenry. Current dual-fuel vehicles include ethanol/CNG with future LPG/CNG combinations possible. Dual-fuel capability may have an added benefit of relieving employee anxiety during statewide infrastructure development. 3. Leverage state natural resources. To leverage existing state natural resources, provide a concurrent savings in fuel expenditures, and reduce environmental emissions, agencies should consider prioritizing their fleet sustainability efforts by formalizing their replacement methodology. 4. Integrate sustainability efforts with strategic objectives. Successful change agents are those that embrace change, but do not subscribe to a â&#x20AC;&#x153;ready, shoot, aimâ&#x20AC;? methodology. Successful organizations execute a formalized change control process that ensures deliberate and thoughtful consideration of concepts, technologies, processes, or products and ties them to existing long-term, strategic objectives.â&#x20AC;?

Chandler stated, â&#x20AC;&#x153;Once you have consensus by those stakeholders, stick to the plan.â&#x20AC;? He continued, one of the most common reasons any fleet initiatives fail is because they are expanded beyond their original scope; green fleet initiatives are no exception. Chandler recommended to avoid delays and cost overruns, and stay consistent with the original scope of an initiative upon which the consensus for direction was established. Based on overall results to date and statistics on ROI in states such as Oklahoma, it would appear that West Virginia fleet is poised for successful implementation of low-cost/no-cost green fleet initiatives. ABOUT THE AUTHOR Barbara Bonansinga has worked in fleet management with the State of Illinois for more than 25 years. She can be reached at bbonansinga@ sbcglobal.net.

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June 2011

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The City of Seattle retrained employees on the existing technology systems to ensure the resources were being used to their full potential.

SEATTLE MAXIMIZES TECHNOLOGY TO IMPROVE OPERATIONS

Today’s technology can provide a number of advantages, but only when used as intended and to maximum potential. By identifying how to fully utilize its information technology system, the City of Seattle was able to increase efficiency in its operations and achieve savings. BY STEPHEN BENNETT

he yearned-for toys of yesteryear accumulate in many homes, played with the day they are received, maybe longer, but eventually abandoned and then forgotten. Information technology and software programs can meet much the same fate. They are acquired, implemented, users learn what they need to know to do their jobs — and that’s it. As time goes by, users become less and less inclined to “play” with it and learn what more it can do. So an organization, such as a govern-

AT A GLANCE By maximizing the use of its information technology system, the City of Seattle was able to: • Generate better quality data. • Monitor vehicle and fuel use more accurately. • Identify underutilized equipment and remove or re-assign as needed. 34

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ment fleet, that isn’t maximizing the system only realizes a fraction of the benefits. For the City of Seattle, fleet managers realized they could do more with the information technology (IT) they had, and by doing so, reap operational and moneysaving benefits.

ENSURING PROPER USE OF TECHNOLOGY The City of Seattle’s fleet team, which includes Nanci Lien, fleet administration manager for Seattle, and Dave Seavey, fleet services director, contacted the City’s IT vendor for help re-integrating and maximizing the system already in place. This involved assistance with correcting bad habits that had developed, reinforcing good habits, and generally instilling a stricter adherence to protocol so the system would yield more of the expected benefits. The City fleet is comprised of 4,000

pieces of equipment, between 3,000-4,000 of which are used by City employees. This year, it is acquiring 26 Nissan LEAF electric vehicles and creating a recharging infrastructure for them, with $1.5 million it received in federal stimulus money, Lien reported. According to Lien, she told AssetWorks, the City’s IT vendor, they didn’t need any new “toys” and already had “a lot of toys we haven’t been playing with.” The re-tooling effort began in late 2009. “Our theme was ‘data matters,’ ” said Lien. In reviewing its use of AssetWorks’ system, FleetFocus, “We found our data was not as clean as it could be.” The FleetFocus system tracks vehicle and equipment maintenance, including processing repair and preventive maintenance work orders, capturing operating expenses (e.g., fuel, oil, and licensing), and offers billing and tracking for vehicle equipment usage. J

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TECHNOLOGY

One-hundred seventy under-utilized vehicles were moved out of the “department-assigned” category as part of an overall re-tooling effort.

Work orders in the FleetFocus system are linked to parts inventory. As parts are used, replenishment orders can be generated.

Training or, more accurately, retraining in the best use of the IT system was needed, so that “good, clean data” could be generated, Lien explained. For example, she said the City of Seattle operates more than 30 fuel sites altogether, with three accounting for some 60 percent of fuel used. Seavey and Lien concluded that many of the City’s fleet vehicle operators needed to be retrained in the protocol for using the fueling system, so that good-quality data would be generated. At the pump, the system requires operators to enter critical information, such as their employee number, the equipment number for the vehicle being refueled, and the mileage. However, not all employees performed this task properly. After the retraining sessions, Lien and Seavey monitored driver performance. Exception reports flagged discrepancies between odometer readings entered by employees and actual odometer readings. The re-training sessions had emphasized that entering accurate odometer readings was critical, as it helped determine when vehicles would be serviced and inspected. Employees whose names popped up on exception reports — meaning their odometer entries turned out to be inaccurate — were reminded in conferences of what was expected. But some employees had recurring problems. “Eventually, we restricted them from using the system,” Lien said. “They were not able to fuel.” Part of the monitoring by the system is based on a “vehicle profile,” including the type of fuel a vehicle uses (gasoline or diesel) and the maximum number of gallons the fuel tank can hold. “Nozzle-sharing” — refueling a vehicle and then just passing the nozzle on to the next vehicle operator —

was a no-no, but had obviously occurred. Lien recalled one case in which 680 gallons was “dispensed” to a single Crown Victoria patrol car in the course of two days. Such episodes tended to occur out of impatience or disdain for the proper procedures, which she said were viewed as time-consuming and tedious, rather than with an understanding of how they could support timely, cost-effective maintenance of vehicles.

Government Fleet

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HOLDING EMPLOYEES MORE ACCOUNTABLE Installing radio-compatible rings around vehicle fill pipes was the curative for nozzle-sharing. The rings, working with antennas installed at some of the fueling sites, link the vehicle being refueled with the ID card an employee must swipe before starting the fueling process. The rings are installed on new vehicles added to the fleet. Besides the City’s own fueling sites, employees are permitted to visit a dozen retail stations where the City has accounts. The transactions at these stations were managed on paper. The stations kept forms on clipboards, where City employees were required to write their employee number, vehicle number, etc. The onerous monthly paperwork generated by this practice, compounded by occasional cases of illegibility or inaccuracy, was eliminated with the introduction of fuel cards issued to employees. This had the added benefit of greater accountability. Lien emphasized that issuing the cards to employees worked far better than, for example, linking each card to a particular vehicle. “A car can’t talk if we have a question,” she explained. Employees who received cards were in-

At the pump, the system requires operators to enter employee number, vehicle equipment number for unit being refueled, and mileage.

structed not to lend them to other employees and were told they would be held responsible. “We have cancelled cards,” Lien said. “It’s about behavioral change.” It’s also about fleet size. As part of the overall re-tooling effort, the City retained a consultant to conduct a utilization study, which led to the shedding of some underutilized vehicles and the re-assignment of other units to the motor pool. For example, one department was assigned a vehicle that was only driven 7,000 miles in one year. “Do you really need it?” Lien asked. “Or can you use a motor pool vehicle?” Such scrutiny resulted in 170 vehicles being moved out of the “departmentassigned” category in 2009, Lien said. An option is to move all or some of them to the motor pool, where they may be used more efficiently, effectively, and widely, Lien said. The motor pool is governed by a “key valet” program that is part of the FleetFocus system. Employees make vehicle reservations online. Maintenance and the parts department came in for a tune-up, too. This involved ensuring the FleetFocus system for these activities was being used as intended. For example, work orders in the program are linked to parts inventory, so that as parts are used, replenishment orders can be generated. “Our ultimate goal is to create a dashboard of five to 10 pieces of information,” Lien said. This would include the number of vehicles in the fleet, the amount of fuel used, and mileage, on an ongoing basis.

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Generally speaking, Lien said municipal governments do a good job researching software and in the initial training on how to use it, but then, “30, 60, 90, or 100 days after installation,” there is often a fall-off in “after care.” She likened the scenario to that of a consumer who purchases a personal computer and learns to use a fraction of the word processing and accounting programs.

REALIZING FINANCIAL BENEFITS In regard to the return on investment for all of the re-training and tweaking, much of which took place in 2010 and is ongoing, Lien said, “The ROI is being able to do the same or more with less of a workforce.” Like many municipal fleets, Seattle had to deal with budget cuts, including the elimination of between 15-20 “full-time equivalents,” Lien noted. Going forward, using the FleetFocus system effectively provides the fleet managers with high-quality data — the numbers they need to generate reports to make their case to the City administration for what they need. Seavey said, “My view is that there is not as much emphasis on business management as there should be” in government fleet departments generally. “We exist for vehicle maintenance,” Seavey said, but without business management practices — close attention to the ledger — “extremely high costs” can result. “Based on the decisions they make, supervisors and crew chiefs on the floor have a huge impact on how the budget is spent,” Seavey said. “This is not in any way meant to be a knock,” Seavey said, “but in fleet maintenance a lot of managers used to be mechanics or in the maintenance field. They were really good at their work and they were promoted.” However deserved such promotions are, they should be accompanied with training in budget management, Seavey said. He, Lien, and Ken Bailey, vehicle maintenance director, made a point of teaching those principles as part of their campaign over the past year and more, and aim to continue doing so, Seavey said.

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SOURCES • Nanci Lien, fleet administration manager, City of Seattle. E-mail: nanci.lien@seattle.gov • Dave Seavey, fleet services director, City of Seattle. E-mail: dave.seavey@seattle.gov

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June 2011

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BEST PR IN REMARK E Remarketing can yield major resale dollars for “yellow metal” and other off-road equipment. Five fleet experts weigh in on some of the best ways to maximize resale value for off-road equipment. BY SHELLEY MIKA

hen fleets remarket vehicles, they earn precious dollars that can help offset the cost of purchasing new units. The same is true for off-road equipment. By opting to remarket used “yellow metal” over disposal, fleet managers can see higher resale value than they might expect. Remarketing off-road equipment relies on tried-and-true remarketing techniques, but also calls for a few of its own best practices.

AT A GLANCE Several fleet experts offer pointers to maximizing the resale value of off-road equipment, including: • Setting a well-planned replacement schedule. • Researching and comparing values online and locally before selling. • Spending a few hours making the equipment presentable. • Taking advantage of online auctions and utilizing photos and video. • Considering the buyer standpoint when describing the condition of the asset. 38

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Five fleet managers for city, county, and state fleets shared their own practices and offered advice for maximizing resale value.

CHOOSE THE RIGHT TIME TO REMARKET First things first: Finding the right time to part with off-road equipment is an important part of launching the remarketing process. Gary Lykins, fleet manager for the Town of Jonesborough, Tenn., explained that the urge to keep a depreciated unit around for parts can be tempting — and pressure to keep it around for a spare can be overwhelming. However, Lykins said a well-planned replacement schedule is a fleet manager’s best bet. “Remarketing keeps the river of yellow metal flowing through the economy,” Lykins said. “When an organization purchases a piece of equipment, the clock is running; rather, many clocks are running. The asset is depreciating, the technology is getting better on the newer

models, and the productivity ‘up-time’ is declining on the asset you own. The accepted optimum replacement schedule is at the mark when depreciation and repair costs intersect.” Lykins suggested fleet managers set a replacement schedule, then stick to their guns. Finding the right time to remarket can make the best use of equipment — and the public’s dollars.

DETERMINE THE RIGHT PRICE Once you’ve made the decision to remarket off-road equipment, it’s a good idea to estimate the value you’d like to get out of it. This will help determine the appropriate avenue for remarketing the unit, as well as set expectations for the value you’ll get. Allen Mitchell, CPFP, fleet manager for Snohomish County, Wash., researches equipment values online and locally before attempting to remarket his equipment. “We determine values through online resources and monitor bidding online to ensure we are getting the values

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ST PRACTICES

K ETING OFF-ROAD EQUIPMENT we think are appropriate. If we aren’t able to obtain a current value, we’ll call some local dealers or our auction vendors for an estimate,” he said.

theft of items (batteries, tires, etc.) can be corrected,” he said.

INVEST A LITTLE, BUT NOT TOO MUCH

Once equipment is ready for resale, finding the right outlet for the sale is a critical choice. For live auctions, it’s important to make sure it fits your equipment and pricing needs. “Some auction services have no minimum bid. One needs to be selective and purposeful in using that type of resource, otherwise some equipment can be sold for too little value,” said Mitchell of Snohomish County. Mitchell suggested tailoring the auction service to the equipment being sold. “Don’t assume one size fits all — different equipment may require a different marketing approach or researching the right customers,” he said. “I find it more efficient to select professional service providers (auctioneers) who have all of the tools to market our equipment in the optimal way and to the broadest spectrum.”

Part of what makes an asset attractive for sale is presentation, which relies on the work put into making the piece presentable before it goes up for sale. In preparing equipment for resale, Lykins suggested putting in a little effort beforehand — but not so much that you reduce the overall value of the sale. “Don’t go overboard,” he said. “The reason you are getting rid of the asset is because the cost of keeping it up has outweighed the benefit of having it around. Chances are, you have spent way too much on the asset already. Just simply budget a couple hours of shop time to fix some of the little things and give it a good cleaning.” J.D. Schulte, fleet manager, City of Moline, Ill., relies on in-house resources to prep off-road equipment for resale. “We take the time to ‘spruce’ it up,” he said. “We use light-duty [equipment] employees from other departments when they are available to clean and detail our vehicles and equipment. With the City of Moline having nearly 400 full-time employees, there is a good chance that someone is on a light-duty return-to-work status that can help us with detailing.” To make assets ready for sale, Curt Cole, business manager, maintenance and operations for the Delaware Department of Transportation (DOT), launched a “startup day,” with mechanics on hand to help get equipment running. “The startup day helped quite a bit; people could see the equipment was running, and we corrected minor problems. We also pre-inspect our equipment to ensure that any damage or

FIND THE RIGHT AUCTION SERVICE

TAKE ADVANTAGE OF ONLINE AUCTIONS Perhaps the biggest trend — and the most commonly suggested best practice — for remarketing used yellow metal is taking full advantage of online auctions. For one, online auctions reach a much wider audience, which can be critical, especially when selling highly specialized equipment. Appealing to a wider audience can also make for much higher resale values. “Last year we sold some obsolete (no longer manufactured) and high-enginehour used sweepers for approximately $45,000 a piece,” said Mitchell. “We also doubled our price of police motorcycles through the world wide web.” Schulte of Moline shared a similar suc-

cess story. “One of the most remarkable returns was on a John Deere model #401 tractor that we sold nearly five years ago. The City originally purchased it for $6,748 in 1981,” he said. “The department had changed its operation and needed a frontwheel assist tractor as a replacement for this unit. We marketed the 25-year-old unit on eBay with a video of the loader operating and the three-point hitch functioning properly. When the auction closed, the tractor sold for $9,400 — more than $2,600 higher than what the City had paid 25 years prior.” Although many online auctions sell units within the U.S., appealing to a global audience can also boost sales. Mitchell, for one, added a worldwide auction to increase exposure. “We have found this to be very lucrative, especially with certain specialized and construction equipment, as a result of the demand created by international disasters that have occurred in recent years,” he said. In addition to expanding the potential audience and increasing resale prices, online auctions can help avoid many of the costs associated with live auctions. “While on-site live auctions were the standard for years, it had its limitations. The Saturday auction days were very expensive to host; hidden costs such as overtime, administration costs, transporting equipment to the auction site, and security risks played a part in our decision to go to the online auctions,” Lykins of Jonesborough said. “In addition to expense, bad weather is apt to play a detrimental role at a live auction. During the best live auctions, we may have 30 potential bidders on the equipment; the online auctions offer hundreds, or at times thousands, of potential bidders. Online auctions have drastically reduced the expense of surplus asset disposal. The percentage of the sale is a fixed amount and very few hidden costs are associated.” Government Fleet

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OFF-ROAD THE BEST PRACTICES PANEL:

Appealing photos and accurate video of a new Holland 555 backhoe helped the Town of Jonesborough, Tenn., see major remarketing success.

For Tom Monarco, fleet manager, City of Colorado Springs, Colo., online auctions have eliminated restrictions on when units can be sold and done away with transportation costs. “We used to go through big auction companies such as Ritchie Brothers or vehicle auction companies,” Monarco said. “We decided to use Public Surplus or eBay because of not having the additional cost of hauling the equipment to the auction sites. We do not have to wait till the auction companies have their sales; we can sell anytime.” While online auctions have some very apparent benefits, it’s important for fleet managers to remember that they don’t run themselves — they require attention in order to get results. “Online auctions are a fleet manager’s dream. But it’s important to be involved, stay on top of the process, and be flexible; you are the decision-maker on a lot of the details of the process. Get your organization the best deal possible,” Lykins said. Schulte also offers a third option: combining live auctions with an online component. “We use the Internet in some fashion for all our auctions, even when we have a local auctioneer,” he said. “For example, we post videos online for the equipment that we are disposing so the local auctioneer can promote the item prior to the sale to potential bidders outside the local area. We have also used live auctions that allow Internet bidding simultaneously for our specialty items to broaden the scope of the audience.”

TAILOR SALES PITCH TO THE ONLINE ENVIRONMENT With online auctions gaining popularity, it’s critical for fleet managers who rely on them to also know the needs of 40

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Snohomish County, Wash., conducts research online and locally before selling equipment.

Delaware DOT provides prospective buyers access to equipment maintenance records.

marketing to these unique audiences. The sales pitch is simply not the same as it is in a live auction. The buyer can’t hear the engine run, walk around the vehicle, or accurately assess the condition. Photography and video can help. Lykins of Jonesborough offered valuable advice when approaching the photo and video task. “When photographing the equipment for online auctions, look at advertisements for new equipment. Pay attention to the camera angles in the glossy new ads and notice that most yellow metal ads have action: the loaders are loading, the rollers are rolling, and the trenchers are trenching,” Lykins said. “Most online auction sites have video available. Recruit an operator who is familiar with the asset and make a five-minute video of the asset. Show the unit doing its job, let the bidder hear the engine, and get footage of all the attachments. If the online auction site does not feature video, link your video via any popular video-sharing program on the Web.” Using appealing photos and accurate video helped Lykins and the Town of Jonesborough see major remarketing success. The Town’s fi rst taste of online auctions was with police-seized vehicles. It was such a success that the method of online auctions of the sur-

Gary Lykins, fleet manager for the Town of Jonesborough, Tenn., remarkets all of his surplus rolling assets. He relies on the www. GovDeals.com online auction website.

LYKINS

Allen Mitchell, CPFP, fleet manager at Snohomish County, Wash., primarily uses two auction services to remarket a broad scope of equipment MITCHELL ranging from motorized tools, to attachments, to construction equipment, to over-theroad trucks. The County also occasionally includes trade-in clauses with its truck and equipment bids and sells to local municipalities when there’s an interest.

J.D. Schulte, fleet manager, City of Moline, Ill., sells nearly all of the City’s surplus items on eBay or through Public Surplus, but also supplements local live auctions SCHULTE when they are used by using YouTube to post promotional videos prior to the auction. In some cases, the City has used live auctions that allow simultaneous Internet bidding. Curt Cole, business manager, maintenance and operations for Delaware Department of Transportation (DOT), remarkets off-road equipment that is small in COLE nature, such as mowing, loading, and some construction equipment. Most of it is sold at auction and occasionally online. Tom Monarco, fleet manager, City of Colorado Springs, Colo., sells all of the City’s off-road equipment, which includes loaders, backhoes, dozers, etc., through Public Surplus or eBay.

MONARCO

June 2011

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OFF-ROAD plus equipment was quickly approved by Town leadership. Using both video and still photography of a new Holland 555 backhoe, the Town recently fetched a $9,400 price tag at auction — even though previous auctions of a similar backhoe only brought $6,500. A similar approach has yielded improved results for Monarco and the City of Colorado Springs, too. Video of a running engine and photos of the equipment while running have increased unit resale values by 10-12 percent. When using the Internet to remarket, Schulte of Moline put it best: “The unknown is a huge obstacle with online auctions. If a potential bidder can hear an engine, or see an item operate, it takes a lot of the uncertainty out of his or her decision to bid. Give your potential bidders every opportunity to ‘feel’ the unit even if they are 1,000 miles away,” he said.

BE THE BUYER & BE HONEST Knowing your market is key. Who will likely buy this equipment? What will they want out of it? Putting yourself in the shoes of your buyer can help you take action to truly appeal to their needs — and their purchasing sensibilities. Cole of Delaware DOT put it simply: “Get in contact with the customer base that uses this equipment and you get better pricing.” Being the buyer starts with an accurate and detailed description of the equipment. “Above all, be honest and accurately represent the condition of the equipment. Condition is subjective, and expectations are shaped by your description of the equipment,” Lykins of Jonesborough suggested. “Don’t give opinion in the description; stick to the facts. Try to imagine a prospective market for the surplus asset: a logging company, a farmer, a tree removal service, perhaps. Then decide, ‘What does a prospective buyer want to know?’ ” Schulte of Moline agreed, and recommended paying attention to which extras to include, particularly with off-road equipment. “Knowing what is important to the next owner is key. Including all the service and parts manuals with the auctions seem to make a difference,” he said. “Equipment can be very unique and require special tools, procedures, and parts 42

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The City of Moline, Ill., sells nearly all of its surplus items online and also promotes local live auctions using YouTube. “If a potential bidder can hear an engine, or see an item operate, it takes a lot of uncertainty out of his or her decision to bid,” said Fleet Manager J.D. Schulte.

to keep them maintained (unlike cars and trucks) so the manuals can make a huge difference to the next owner.” Once you’ve appealed to the particular sense of your buyers, Lykins suggested inviting them to see the equipment as the final hook to make a sale. “Inviting potential bidders to view the equipment during the auction period helps get a bidder invested,” he said. “If a bidder is willing to come down and view the asset during an online auction, that means he or she has invested some time and energy into the purchase and usually means that person will be one of the final bidders.” When having bidders on-site, Cole recommended having maintenance records available for inspection, too, as well as having the equipment section on hand to talk to prospective buyers about the condition of the equipment. “We typically maintain equipment well over its life to have it perform when needed. Showing our maintenance records demonstrates our care for the equipment.”

AVOID PITFALLS UNIQUE TO ‘YELLOW METAL’ While many traditional remarketing techniques apply to off-road equipment, Lykins of Jonesborough and Schulte of Moline offer a few pitfalls to avoid that are unique to these assets. For instance, unlike typical fleet units, used “yellow metal” buyers will have a greater interest in the accessories — and that means those should be highlighted in the resale process. “Unlike cars that are

usually used for transportation, nearly all equipment is doing some type of ‘work’ for the owner,” Schulte. “PTO-driven accessories, functioning attachments, etc., are important to the next potential owner.” Documentation can also be a key component requiring a little extra attention. “Yellow metal traditionally does not have a title, so be sure to document everything from the authority that sent the asset to surplus, to the serial number and engine numbers, all the way to the check number of the purchaser,” Lykins advised.

MASTERING THE ART While many methods of remarketing have proven results, ultimately the success of the task is up to the fleet manager. Tailoring remarketing to the specific type of equipment, the right market, and budgetary considerations are key to successful remarketing of off-road equipment. “Like so much else in fleet, there are no pat answers to equipment disposal,” Mitchell of Snohomish County said. “Obviously we would always like to buy the equipment for the lowest cost and sell it at the highest price at the end of its economic life. I think it is at least as much art as science.” SOURCES • Curt Cole, business manager, maintenance and operations, Delaware Department of Transportation. E-mail: curt.cole@state.de.us • Gary Lykins, fleet manager, Town of Jonesborough, Tenn. E-mail: g_lykins@embarqmail.com • Allen Mitchell, CPFP, fleet manager, Snohomish County, Wash. E-mail: allen.mitchell@co.snohomish.wa.us • Tom Monarco, fleet manager, City of Colorado Springs, Colo. E-mail: tmonarco@springsgov.com • J.D. Schulte, fleet manager, City of Moline, Ill. E-mail: jschulte@moline.il.us

June 2011

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NEW PRODUCTS COLE HERSEE VOLTAGE SENSING RELAY & TIMER OEM DATA DELIVERY MULTI-PUMP OEM Data Delivery’s Multi-Pump allows fleet management to precisely track and document the use of every fluid, including fuel, engine oil, and transmission and hydraulic fluid for each fleet unit. The wireless, paperless, The Multi-Pump installs on any fuel, lube, or pickup and “hands-free” technol- truck, or on fuel stations or remote bulk tanks and ogy identifies each vehicle, features security options for employee or equipment its location, and the fluids approval. dispensed to it using GPS technology and a radio antenna. Captured information can be accessed via e-mail or password-protected Web reports. The Multi-Pump also generates custom service alerts, maintains individual vehicle histories, and facilitates important calculations and analyses. WWW.OEMDD.COM

Cole Hersee’s Voltage Sensing Relay & Timer (VSRT) conserves the starting power of a vehicle battery by shutting off auxiliary loads when starting voltage drops to a low level or a pre-set timer times out. The FlexMod VSRT’s service life exceeds 1 million on/off cycles, according to the company. The device can handle many loads directly or drive a relay or solenoid for higher amperages. Overvoltage and overcurrent protective measures are also included. The VSRT is weather-resistant, waterproof, and dustproof, and can be mounted anywhere on the vehicle with minimal wiring and a snap-in connector. WWW.COLEHERSEE.COM

ADAMSON INDUSTRIES CORP. DURO-FLASH Adamson Industries Corp.’s Duro-Flash, a product used to replace an incendiary flare, is used by first responders, highway crews, and other departments that need to be able to mark vehicles, close a lane, direct traffic, or make a place more visible. The Duro-Flash has no switches or moving parts and has an incorporated on/off switch — plug it in to turn it off and charge it, and unplug it to turn it on and use. The Duro-Flash is waterproof and weatherproof and features a lithium battery that lasts for hours between charges, according to the company. WWW.ADAMSONINDUSTRIES.COM

The Duro-Flash kit consists of an aluminum alloy unit enclosure with six hermetically sealed flash units and one rechargeable polymer lithium-ion battery.

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The FlexMod VSRT, measuring 4x3x1 inches, alerts a vehicle operator when starting voltage is low and temporarily cuts off any non-essential electrical loads, thus conserving power.

NETWORKFLEET AT-1400 ASSET TRACKER Networkfleet’s AT-1400 Asset Tracker is a battery-powered tracking device for fixed and movable assets without a constant source of power. Property and equipment such as trailers or generators can be tracked along with vehicles in Networkfleet’s existing online system. The AT-1400 uses wireless communication an and GPS technology to report location and movem movement for field assets, including heavy-duty equipme equipment and other valuable property. The AT1400 features fea a battery life lasting up to six years, offers co configurable location update rates, and is programm programmable over the air. The device comes with a three-year warranty. WWW.NE WWW.NETWORKFLEET.COM The AT-1400 features hardened, sealed enclosures to alfunctionality in extreme environlow for maximum maxi mental conditions, according to Networkfleet. me

June 2011

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BF0511greenflt_conf.in

OCTOBER 3-4, 2011 Gaylord Texan â&#x20AC;˘ Grapevine, TX The Green Fleet Conference & Expo is the only event which focuses exclusively on environmental sustainability for car and truck fleets. Others may touch on the subject but Green Fleet Conference & Expo specializes in it, offering two intense, concentrated days of education, enterprising dialogue and engaging exhibits. If you are a fleet manager in either the corporate or government arena, make room in your calendar for this must-attend event!

For more information, please visit us at

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REMARKETING WEBSITES PROPERTYROOM Through PropertyRoom’s subcontracting relationship with Copart.com and specialized pricing and benefits for government clients, the company has negotiated PropertyRoom.com was founded as a combination of a technological solution with knowledge competitive pricing options of vehicle disposition. for fleet managers to receive the highest return on their investment. PropertyRoom.com was founded in 1999 for the purpose of combining a technological solution with a comprehensive knowledge of the disposition of police and municipal property. PropertyRoom.com maintains more than 2,600 contracts and focuses on new business and expanding existing business through such ventures as its vehicle Platinum and Titanium Services with Copart.com. WWW.PROPERTYROOM.COM/FLEET

GOVDEALS GovDeals is an online auction marketplace helping government agencies and municipalities generate revenue without any capital expenditure. With more than a decade of experience, GovDeals can expose government surplus GovDeals has more than property to a worldwide bidder 3,700 clients from across base of 1.3 million. It is non- the U.S. and Canada. exclusive, and customers can try it with just an MOU (memo of understanding) and a variety of program options. GovDeals assists fleet managers in the vehicle remarketing process by providing individualized service to maximize the profit on vehicles that have reached the end of their lifecycles. WWW.GOVDEALS.COM

ActionAssets.com’s guarantee makes asset liquidation fast and worry-free, the company stated.

ACTIONASSETS.COM ActionAssets.com is an online marketplace dedicated to creating a best-in-class experience for both buyers and sellers. The company provides a guarantee on all titled vehicles and most bill of sale on-road equipment. It allows asset managers to offer their units with “no reserve” to the buyer base, a valuable feature for buyers. The company does not charge a sale fee to sellers, and there are no contracts to sign. ActionAssets.com was formed by the principals of its parent company Fleet Lease Disposal, Inc. (FLD), a 30-year veteran remarketing company. WWW.ACTIONASSETS.COM

eBAY MOTORS eBay Motors, a unit of eBay Inc., offers new and used vehicles, motorcycles, equipment, and the parts and accesMore than 4 million new and used vehicles sories to go with them. have been sold on eBay Motors. Selling on eBay Motors is similar to selling on eBay.com. There are several ways to list, including auction and fixed price formats, and fleet managers can open their listings to either a local or national audience. Sellers can upload an unlimited amount of images. eBay Motors also offers free vehicle history reports, third party inspections, vehicle purchase protection, and seller feedback. WWW.EBAYMOTORS.COM

IRONPLANET IronPlanet focuses specifically on auction of used construction and agricultural equipment.

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IronPlanet is an online marketplace for used heavy equipment. Sellers achieve more profitable sales through low transaction costs and better price realizations through a global audience of buyers, according to the company. IronPlanet’s guaranteed inspection reports and IronClad Assurance enable buyers to bid with confidence. IronPlanet is backed by Accel Partners, Kleiner Perkins Caufield and Byers, Caterpillar, Komatsu, and Volvo. WWW.IRONPLANET.COM

June 2011

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A fleet managerâ&#x20AC;&#x2122;s best friend is a well-informed maintenance staff

Bobit Business Media, the authority on fleet vehicle management for 50 years has launched a new publication designed to help you in your maintenance and repair needs. Auto Service Professional (ASP) is designed to provide you and your maintenance team with easy-to-read content on: t 5SBJOJOH SFTPVSDFT t )PX UP BSUJDMFT PO SFQBJS NBJOUFOBODF t 5PPM BOE TIPQ FRVJQNFOU SFWJFXT t 54#T BOE '4#T t 4BGFUZ BOE DPNQMJBODF JTTVFT t "OE NVDI NPSF UP LFFQ ZPVS Ã¾ FFU QSPQFSMZ NBJOUBJOFE ASP T XFCTJUF XXX BVUPTFSWJDFQSPGFTTJPOBM DPN IBT VTFS GSJFOEMZ TFSWJDF CVMMFUJOT UFDIOJDBM JOGPSNBUJPO BOE UIF MBUFTU JO UPPMT BOE FRVJQNFOU TVQQMJFS JODFOUJWFT BOE USBJOJOH PQQPSUVOJUJFT 5P IFMQ ZPV GVSUIFS XF SF QSPEVDJOH B XFFLMZ F OFXTMFUUFS TP ZPV XPO U NJTT PVU PO BOZ JOGPSNBUJPO 8F WF NBEF JU RVJDL BOE FBTZ UP TJHO VQ GPS CPUI ASP NBHB[JOF BOE F OFXTMFUUFS +VTU HP UP XXX BVUPTFSWJDFQSPGFTTJPOBM DPN TVCTDSJCF Other Bobit Business Media Automotive Magazines

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for your free Auto Service Professional subscription and free weekly e-newsletter online at: autoserviceprofessional.com/subscribe

3515 Massillon Road, Suite 350 Uniontown, OH 44685-6217 (330) 899-2200, fax (330) 899-2209 Web site: www.autoserviceprofessional.com 5/18/11 3:36:04 PM

By Mike Antich

PUBLIC FORUM

MEASURING FLUID COST PER MILE TO CALCULATE TCO FOR SCR-DIESEL ASSETS

ifecycle costing is the process of estimating the total cost of ownership (TCO) for an on-road or off-road asset for the length of its anticipated service life. This cost is determined by calculating the asset’s lifetime holding costs and lifetime operating costs. Holding costs (or fixed costs) are comprised of the initial acquisition expense and projected depreciation. Operating costs (or running costs) are those expenses directly related to operating a piece of equipment, such as the actual dollars spent on fuel, scheduled and unscheduled maintenance, tire replacement, and oil changes. By combining the projected holding costs and operating costs, a fleet can quantify an asset’s anticipated TCO. However, the 2010 diesel emissions standard and the resulting changes in diesel emission technology have prompted discussion on whether to modify how operating costs for diesel-powered equipment are calculated, in particular fuel cost per mile. Approximately 85 percent of 2010-compliant diesel engines are manufactured using selective catalytic reduction (SCR) technology. SCR technology uses a urea-based diesel exhaust fluid (DEF) and a catalytic converter to significantly reduce oxides of nitrogen (NOx) emissions. However, the use of DEF has created a new expense com-

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ponent during an asset’s service life. How should DEF expense be incorporated in lifecycle cost methodology? “Instead of only measuring fuel miles per gallon (or a fuel cost per mile), a trend is occurring in fleet management to measure ‘fluid cost per mile’ or ‘fluid gallons per mile,’ where the cost of DEF and the cost of fuel are combined. This view believes DEF is more closely associated with fuel versus a maintenance expense,” said Ken Gillies, manager, truck operations for GE Capital Fleet Services.

METHODOLOGY USED BY EUROPEAN FLEETS DEF is a 32.5-percent solution of ultra-pure urea, a chemical used in a variety of industries, including agriculture, which uses it as a fertilizer. Urea is a compound of nitrogen, oxygen, and hydrogen made from natural gas. When heated, urea turns to ammonia. In the aftertreatment equipment of an SCR engine, the ammonia combines with NOx to form harmless nitrogen and water vapor. Although being used for the fi rst time in the U.S., SCR technology has been in extensive and widespread use in Europe, Japan, and Australia for many years. Some of these fleets have adopted a fluid-cost-per-mile mindset when calculating lifecycle expenses for diesel-powered assets. However, this mind-

set has been slow to catch on with U.S. fleet managers, with many fleets not including the cost of DEF in lifecycle cost analyses. “In the 2011 model-year, few U.S. fleets were using a fluid-cost-per-mile methodology when calculating total cost of ownership,” said Gillies. “Unless you include your DEF cost, you are not truly calculating the total cost of ownership since you are missing an operating expense.” (In addition to incorporating DEF expenses in TCO, it is also important to include diesel particulate filter [DPF] costs.)

CALCULATING DEF CONSUMPTION Average DEF consumption per truck is approximately 2 percent of fuel consumption, depending on application, duty cycle, geography, and load ratings. This works out to one gallon of DEF required for every 300 miles traveled (assuming a fuel economy of 6 mpg). Another way to calculate usage is that DEF will be consumed at a 50 to 1 ratio with diesel. (For example, for every 50 gallons of diesel fuel burned, one gallon of DEF will be used.) Only very small amounts of DEF are required to reduce a diesel engine’s NOx emissions. The actual amounts of DEF required vary depending on the demands on the engine and the amount

of NOx it is producing, but experience in Europe and Japan shows that dosing will be about 2 percent of the diesel consumption. You can easily calculate the amount of DEF that will be used during an asset’s service life if you know its average fuel consumption. To calculate projected DEF usage, divide the average annual miles driven by the asset’s mpg to determine the number of gallons of diesel consumed per year. Let’s say this equates to 2,500 gallons of diesel fuel per year. With DEF usage at 2 percent of fuel consumption, this would equate to 50 gallons of DEF per year. Just as with the cost of diesel, DEF prices can fluctuate. Higher prices for natural gas, as well as ammonia prices, have a direct impact on urea prices. Urea prices are driven by global supply and demand. The retail price for a two-gallon container of DEF varies from $10 to $15 depending upon the region and location. Gillies believes it will be more commonplace to adopt a fluid-cost-per-mile methodology and include DEF in lifecycle costing calculations. “It is an integral part of calculating your true cost of ownership in operating SCRequipped diesel-powered vehicles.” Let me know what you think. mike.antich@bobit.com

June 2011

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THE CHALLENGE: SAVING MONEY OVER THE LONG RUN OUR SOLUTION: AWARD-WINNING LIFECYCLE COSTS

| 2011 CHEVROLET EXPRESS

| 2011 CHEVROLET SILVERADO 3500HD

Nine GM models have been awarded Vincentric’s 2011 Best Fleet Value in America,™ with Chevrolet sweeping the full-size pickup and full-size van categories. The awards honor vehicles with the lowest lifecycle costs in their segment, determined by measuring eight cost factors. For outstanding savings over time, put our award-winning vehicles to work. For more solutions, visit gmﬂeet.com.

OUR VINCENTRIC 2011 BEST FLEET VALUE IN AMERICA™ WINNERS: Cadillac SRX Base FWD – Premium Mid Size Crossover • Chevrolet Tahoe Commercial 2WD – Large SUV • Cadillac Escalade ESV Platinum 2WD – Prestige • Chevrolet Avalanche LS 2WD – Sport Utility Truck • Chevrolet Silverado 1500 Work Truck Regular Cab 2WD 119 – 1/2 Ton Full Size Pickup • Chevrolet Silverado 2500HD LT Regular Cab 2WD – Heavy Duty 3/4 Ton Full Size Pickup • Chevrolet Silverado 3500HD LT Regular Cab 2WD SRW – Heavy Duty 1 Ton Full Size Pickup • Chevrolet Express Cargo G1500 SWB – Full Size Cargo Van • Chevrolet Express Passenger G1500 SWB – Full Size Passenger Van Vincentric awards based on 2011 model year analysis. ©2011 General Motors LLC

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