Bright Ideas: Replacement

Some bright ideas include a replacement plan based on priority, annual calculations of replacement points, and a cash-only plan.

June 2010, Government Fleet - Feature

by Staff

Cedar Rapids Replaces Based on Priority

The City of Cedar Rapids, Iowa, has implemented a replacement plan that controls its capital resource management. The plan looks at actual data to determine what vehicles and equipment are most costly and need to be replaced first for the greatest impact on budgets and operating costs. "Now we have a credible process that focuses on data and assists us in making decisions that are in the best interest of our city," said Dennis Hogan, fleet services manager.

Minnesota Manages Lifecycles

Before a vehicle is acquired for the Minnesota Department of Natural Resources, an annual use expectation and replacement plan (lifecycle) is established. Rates are set to ensure all annual operating costs are funded and replacement dollars in place at the end of its expected use. According to Dave Schiller, CAFM, department fleet, safety and materials manager, "A basic premise is that managing lifecycles to successfully time replacement is key to achieving our core values of safety, cost efficiency, and environmental responsibility." Every new unit provides a performance improvement opportunity, according to Schiller. Fleet reduced downtime, accidents, number of spares, and overall costs. Challenges of wide annual-use ranges are overcome by formulas pairing age/use parameters.

San Bernardino County Assigns Points

Vehicle replacement-point analysis (lowest average annual lifecycle cost by class) and customer charge rate calculations are performed annually in San Bernardino County, Calif. The goal is  balancing the most cost-effective vehicle age to funds required to purchase a new vehicle, according to Roger Weaver, CAFM, CPFP, CPM, director of fleet management. "We charge customers a monthly replacement fee to build those funds. The fund is currently fully funded at $7.7 million," said Weaver. "Our current calculated replacement point for full-size sedans, for example, is 5.5 years and the average age is 4.5 years, slightly better than ideal due to recent early turn-ins and selling the oldest vehicles in the class."

San Diego Uses Cash-Only Replacement System

In 2009, the City of San Diego Fleet Services Division, led by John Alley, CAFM, deputy director and Government Fleet's 2010 Public Sector Fleet Manager of the Year, implemented an approved cash-only vehicle replacement and financial plan for FY10 of 476 vehicles and $34 million.

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