Maintenance

New York City Aims to Save $71M in Fleet Costs

July 29, 2010

NEW YORK - A report from the New York City Mayor's Office of Operations includes recommendations estimated to save $71 million in fleet costs in four years by streamlining city fleet management, centralizing operations, cutting fuel use, and decreasing fleet size, among other measures. It is part of Mayor Michael Bloomberg's plan to save taxpayers over $500 million in the next four years by maximizing efficiency of the municipal government.

According to the report, "the city spends approximately $667 million annually on fleet operations — this includes $283 million on maintenance, $120 million for fuel, $14 million for fuel tank compliance, maintenance, and spill remediation, and approximately $250 million for vehicle and equipment procurement. Maintenance expenditures consist of salary, which includes overtime, differential and fringe benefits; overhead, which includes building maintenance and rent; and vendor expenditures, which include parts and maintenance services. Salary alone represents 70 percent of the City's expenditures for maintenance."

The administration also found a high degree of decentralization across the city's fleet operations. Nine agencies employ more than 1,500 employees who work on fleet management, and who repair vehicles at 126 shops, each with their own set of equipment, staff, and parts inventory.

The report found the following challenges in fleet administration:

  • There is limited attention to customer service and streamlined processes for fleet administration
  • Agencies use diverse and inconsistent performance metrics to track fleet operations
  • There is limited transparency and accountability for the cost of fleet operations
  • Redundant and decentralized resources exist across agencies (e.g. fueling, maintenance, and technology)
  • Agency fleets are not optimally right-sized
  • There are unclear or absent citywide standard operating procedures for maintenance parts management and fueling
  • The city maintains duplicative and outdated systems for vehicle tracking

A news release offered a condensed version of the report's recommendations:

  • Agency maintenance shops will be consolidated, utilizing a more centralized agency shop and/or transferring certain types of repair work to outside vendors.
  • Existing maintenance contracts will be consolidated into citywide requirements contracts.
  • The use of more car-share programs will be explored.
  • Fueling operations will be consolidated and some fueling stations will be eliminated.
  • Using commercial repair shops for passenger vehicles will be explored. A competitive market already exists and by introducing a level of competition within the city for the provision of maintenance services, agencies are encouraged to innovate and improve operations.
  • A Committee for Fleet Management will be responsible for developing and codifying citywide fleet policies and standard operating procedures.
  • Standard performance metrics for fleet maintenance and fueling operations will be created through a citywide database to improve accountability and transparency of fleet operations and help agency managers easily identify trends in their agency's vehicle use, reduce downtime, decrease the number of vehicles, reduce fuel use, and avoid expensive breakdowns by providing preventative maintenance on a regular basis.
  • The city will explore privatizing the auto auction in order to leverage nationwide buying power and online services of well-established auto retailers.
  • A pilot to outsource parts management will be evaluated.

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