Fleet Budgets Squeezed by Decreasing Tax Revenues

The U.S. economic woes have hit business and industry hard. For government agencies, these turbulent financial times mean significantly decreasing tax revenues and often drastically shrinking budgets. As the 2008 holiday season began last November, Government Fleet contacted public sector fleet managers to explore the impact of plummeting economic conditions on their professional responsibilities.

Lower Fuel Prices Bring Lee County, Fla., Little Relief

Marilyn Rawlings, fleet manager for Lee County, Fla., noted her fleet operations "haven't seen any relief in other areas yet as a result of the lowered fuel prices. That will take some time."

The reduced value of real estate in Lee County has diminished tax revenues and building inspections are down, said Rawlings. "That means budget cuts and reduction of services. So the County has had to lay off people and the fear of further reductions causes a trickle- down effect in fleet."

Employees are stressed, said Rawlings, "because they can't pay their bills or are 'upside down' in their homes." The fleet department's annual holiday donation drive was curtailed because employees couldn't contribute as they had in previous years. A food drive was held; however, contributions were given to a few fleet families in need instead of the local food pantry, Rawlings reported, noting, "The delicateness of doing that while maintaining people's dignity is tough."

Personally, Rawlings admitted, "I am still very grateful for my job. The economic crunch has made me look outward more (seeing the needs of others) and inward to the extent that I am much more appreciative of what I have." 

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Vehicle Replacement an Initial Budget Victim in Lynchburg, Va.

Up-and-down fuel prices present budgeting difficulties, said John McCorkhill, CAFM, director of fleet services for the City of Lynchburg, Va. "When prices are down, it is good news for all of us, but when they go through the roof, we end up robbing Peter to pay Paul to get by, which means some things in the budget become the sacrificial lambs," said McCorkhill, who has been feeling the stress of "dealing with more problems with fewer resources."

Falling city revenues initially have impacted the vehicle replacement budget dollars. "I've already been told we may not replace any vehicles at all next year [2009] and if any, only public safety vehicles will be approved. Delaying these purchases will only add additional maintenance burden to our budget, as well as keep customers in vehicles that are unreliable and in some cases to the point of being unsafe," reported McCorkhill. "The administration is also talking about employee cutbacks, which is not something I have heard in my 26 years of municipal fleet management here in Lynchburg and back in Indianapolis where I came from."

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Hillsborough County, Fla., Seizing Opportunities

In Hillsborough County, Fla., significantly dropping tax revenue has resulted in cuts of county personnel and the county fleet size, said Sharon Subadan, CAFM, director, fleet management. However, Subadan and her staff have used this opportunity to right-size the county fleet and re-engineer the fleet process, without incurring a cut in personnel. "The impact has not been all negative as it has made us scrutinize the way we do business in fleet management and make changes to reduce cost without reducing service," said Subadan.

She finds value in meeting the challenges facing fleets. "Personally, I think this is a great time to be a fleet manager. True leadership is being effective during a time of crisis, change, and challenge. Almost anyone can lead when times are good. I find myself being challenged, but also being innovative and able to move initiatives forward that I may not have been able to in a different economic climate."

Subadan noted the current economy "is also a great time to recruit extraordinary talent who would not otherwise be interested in a government job. My challenge is to make the workplace one that keeps this talent in the organization even when economic conditions change."

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City of Inglewood, Calif., Sees No Immediate Impact

According to Rick Longobart, fleet manager, City of Inglewood, Calif., the existing economic turmoil has not yet affected the city's fleet operation.

However, noted Longobart, "Inglewood fleet operation did reduce our budget by 3 percent in the current FY 08/09 budget, which consisted of over $100,000, and should the economy not show evidence of rebounding, may result in deeper cuts in the upcoming budget effective September 2009."

While other city departments may be experiencing budgetary challenges, Longobart has taken a "forward-thinking" approach, continuing to pursue ways of offsetting higher prices by using alternative energy, improved maintenance procedures, and effective productivity rates.

"Moreover, these challenges force one to network with other municipalities to determine new ways of thinking and conducting business to stay competitive," Longobart added.