Maintenance

City of Napa, Calif., Forms Insourcing Agreement With Ambulance Company

May 14, 2012

The City of Napa, Calif., has formed an insourcing agreement with ambulance service provider American Medical Resources (AMR).
The City of Napa, Calif., has formed an insourcing agreement with ambulance service provider American Medical Resources (AMR).

NAPA, CA – The City of Napa, Calif., has formed an insourcing agreement with ambulance service provider American Medical Resources (AMR), according to the City’s Fleet Manager Chris Burgeson. Government Fleet magazine spoke with Burgeson about the agreement and the overall process involved in crafting it.

Burgeson said the City’s fleet services division will handle maintenance, repairs, and related service for AMR’s fleet in and around Napa, which consists of 21 vehicles, including ambulances, inter-facility transport units, and support vehicles. Insourcing will provide fleet services with another revenue source, help solidify its current staffing levels, and reduce the potential for future staff cuts. The contract will bring in $20,000 annually, though Burgeson said that’s a conservative estimate. Fleet Services in Napa operates as an internal service fund, so the revenue would go to the department rather than to other City funds.

The opportunity to bid for the fleet maintenance contract came up when AMR became the City’s local ambulance provider. Burgeson said applying to provide fleet-related services involved meeting with that company’s representatives. After that meeting, Fleet Services became a contender for the contract, at least in part due to its experience maintaining Napa’s fire and police vehicles.

“I believe what gave us the edge was our certified level of quality and our experience with public safety vehicles,” Burgeson said. “Our division has attained the ASE Blue Seal of Excellence certification for three years running. This tells all our customers that all our technicians are certified and have shown a dedication to their trade. As the City’s Fleet Manager, I also hold a CAFM certification, further validating our division’s level of professionalism.”

Taking on an insourcing agreement was new territory for Napa’s Fleet Services. They wanted to be sure they could provide a high level of service and expertise before taking on the agreement, so Burgeson said he and his team evaluated the equipment to determine AMR’s requirements.

“When the first few AMR units started to arrive (before the equipment was in service and the agreement was even in place), we were able to get one delivered to our shop,” Burgeson said. “My technicians poured over the unit, to the point of even doing a mock service to make sure we were bidding accurate and competitive rates. We went over every inspection item, carefully clarifying where you draw the line of maintenance responsibilities.”

The contract Fleet Services and AMR signed off on details what the City’s department will be responsible for and what it will leave to AMR. For example, Burgeson’s team is responsible for inspecting and maintaining the Stryker gurneys in each vehicle in addition to typical vehicle maintenance responsibilities. He said this is the only item in the patient transport area of the vehicle that Fleet Services is responsible for. His technicians went through factory training provided by Stryker to get up to speed on what’s involved in gurney inspection and maintenance.

Napa’s Fleet Services’ approach to this process required a high level of cooperation between the Fleet team and the client.

“From the onset, I involved my entire staff in the process,” Burgeson said. “Everybody had input into the agreement, and now having completed the deal, everyone takes a certain degree of ownership in making this a success. We must be successful and competitive to keep this agreement going year-to-year.”

When it came to negotiating the actual contract, rates were a sticking point. Burgeson said the City and AMR eventually arrived at a fixed cost, rather than billing time and materials, for preventive maintenance.

“We did our homework,” Burgeson said. “We evaluated what we thought it would take to do a PM and arrived at a rate that would cover our costs and be fair to them. It’s a lot easier to budget for PM when you know what it will cost. It will make their budgets easier to forecast.”

Getting the actual contract written took much longer than Burgeson had expected. He said he re-wrote the entire agreement after it had already been through eight iterations.

“After that major re-write, things started to fall into place, and we finally had an agreement everybody felt good about,” he said. “After all this effort, our approval by Napa’s City Council was a huge relief and a proud moment for Fleet.”

Insourcing is becoming more common as municipalities look for ways to become more competitive and secure revenue. Burgeson said that although this was a new process for Fleet Services, his advice is the same he would give for any process in fleet.

“Do your homework, study the issue, know your own capabilities, involve your staff in your decision making, and factor-in as many ‘what if’s’ that you can think of,” Burgeson said. “This is a process that involves Finance, the City Attorney, and senior City management, so give the process plenty of time to work.”

Although insourcing can occasionally be a political challenge for municipalities, it isn’t in this case. Burgeson explained that after even before the City and AMR signed the contract, he spoke with the City manager, who said this agreement will lay the groundwork for all in areas, not just related to fleet.

“This is one that couldn’t have happened at a better time,” Burgeson said. “All this does is open the door to many more opportunities.”

By Greg Basich

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