A Colorado Springs, Colo., outsourced fleet maintenance contract was estimated to save $2 million in three years, but numbers from the first year of the contract show costs are higher than projected due to a new utility service center. A financial audit by the city auditor of the first year of outsourcing the city and utility fleets shows that fleet costs in 2014 were $112,199 higher than planned.

On Jan. 1, 2014, the city began outsourcing its city and utility fleet maintenance to Serco Inc., in order to reduce costs. Many city and utility employees applied for their old jobs through Serco.

The total estimated cost for outsourced fleet services is $9.5 million. The audit shows that in calendar-year 2014, city fleet costs were $43,100 below estimates while Colorado Springs Utilities costs were $155,299 above estimates.

The main reason for the fleet cost increase at the utility is its new service center, which opened in April 2014. The utility decided to add the fleet maintenance operation after the Serco bid award but before the contract was signed, so the addition was not included in the $2 million savings estimate. The utility added the facility to reduce time and fuel needed to transport vehicles to other fleet maintenance sites. The audit stated this new facility will increase utility fleet operating costs by more than $150,000 annually and reduce future estimated savings.

Ryan Trujillo, contract compliance manager, told The Colorado Springs Independent, he’s still confident the city will save $4.2 million within five years. However, City Auditor Denny Nester thinks the cost of operating the new service station will put a dent in that savings total.

The Office of the City Auditor will include an audit of actual three-year results in its 2017 audit plan.

To read the full audit released in August, visit the Colorado Springs website.