Managing Today's Fleet Budgets: ‘A Tight-Knit Team’ in Pittsburgh

Like skillful jugglers working to keep all the balls in the air at once while one or two seem destined to fly totally out of control, public sector fleet managers are grappling with budgets assailed by a cascade of unexpected forces: fuel prices doubling, vehicle costs rising, parts and supplies scarcities and labor shortages.

Care to detail, innovative thinking, proactive steps, and networking with fleet colleagues, according to a group of seasoned fleet managers, can help keep those budget balls aloft as smoothly as possible.

In this four-part series, we hear guidance from fleet managers on managing their budgets amid uncertain times.

In the southeastern Pennsylvania city of Pittsburgh, home to nearly 300,000 residents, Fleet Services Manager Brandon Walton directs operations for a diverse 1,200-vehicle fleet, serving all city departments, including fire, police, emergency medical services, administration and public works. A 17-year fleet industry veteran, he previously managed fleet for the state’s National Guard and holds a bachelor’s degree in information technology and a master’s in business administration.

The Pittsburgh fleet department is staffed by Walton, a contract coordinator, and a budget control staff member. The department manages two maintenance centers: a primary facility for routine maintenance contracted to First Vehicle Services and another for heavy snow equipment and tractors.

Privatizing routine maintenance provides two benefits, Walton says. “First Vehicle Services employs 50 technicians. They can access a larger pool of prospective workers. And because it’s a large North American company, it has greater access to the supply chain for parts and supplies.”

The department’s budget covers four categories: fuel, vehicle purchasing, maintenance and repair. Of those, two present challenges.

“Our 2022 fuel budget — gas and diesel — was $3.8 million,” Walton says. However, fuel prices doubled this year, resulting in an unanticipated $1.4 million extra expense.

Repair costs also rose sharply: $600,000 above budget. Like many other fleets facing vehicle shortages, Walton has been unable to replace vehicles on time, “so we’re running them longer with more catastrophic failures that have to be fixed. We’ve been repairing and running vehicles today that, not so long ago, would have been taken out of service.”

For the first time in his career, Walton had to seek budget increases from the city council, which were approved.

Purchasing Tactics

The fleet’s $6.5 million vehicle purchase budget got a $12.5 million boost this year from the Bipartisan Infrastructure Law, primarily for clean-energy vehicles. The city’s grants office and sustainability team uncovers other funding opportunities and writes grant applications.

Walton employs two other tactics to boost this category’s purchasing power. “I take advantage of competitive bidding to get the best price,” he explains. He also capitalizes on manufacturer pre-pay discounts. “I can save as much as 20% by paying for the vehicle in advance.”

The process of managing his fleet budget in tight times has benefitted from the “tight-knit internal team” of city budget, finance, grants office and sustainability commission who “worked so well together and communicates well together.”

For new ideas or to help solve operational obstacles, Walton turns to industry colleagues, reaching out to his network of other fleet managers. He attends industry conferences whenever possible to learn as well as share his own experiences.

‘Hold Vendors Accountable’

Walton’s first piece of budget management advice is to “hold vendors accountable, particularly long-time vendors.” He has found these suppliers can get complacent — “slack off” — on their contractual obligations and the service they provide. Regular review ensures vendors maintain both. “This is the taxpayer’s money, and I want to be sure it’s used wisely and prudently.”

He is also firm about following his own approach to fleet operations, particularly purchasing. “Some city staffers like to work with salespeople they know at certain automotive dealerships,” he says. “But as I explain, all the vehicles come from the same manufacturers.” Having relationships with manufacturers, he can negotiate. “I can tell them, ‘Here’s what I want, and I want the best price.’”

Lastly, Walton strongly recommends maintaining enforcement of fleet policies, for example in accident reporting and idling. “I’m finding it increasingly important to monitor these areas and make sure drivers follow them to save fuel and vehicle wear and tear,” he says. “And consequently, save on expenses.”