SAN FRANCISCO, CA – California’s State Compensation Insurance Fund (SCIF) has dramatically reduced the size of its fleet from a total of 2,300 vehicles at the end of 2010 to a small pool of 150 leased vehicles (a reduction in fleet size of more than 93 percent). Government Fleet spoke with Jennifer Vargen, Sr. VP marketing/communications for SCIF about the change and how SCIF made this major change. Vargen said that no SCIF jobs are being eliminated, and that no facilities are closing, as a result of this reduction.

The SCIF implemented this major change in policy for a number of reasons, though the overarching reason was to simplify vehicle use for business purposes for employees. Now, with only 150 vehicles, leased from Toyota, according to Vargen, the SCIF has a much smaller fleet to manage.

“Prior to this we had purchased our fleet vehicles and allowed the fleet to age significantly,” Vargen said. “We decided to go with reimbursement in order to make IRS compliance easier, to provide a greater line of sight for expenses, and to free staff from the significant work of fleet management.”

Going forward SCIF plans to reimburse employees for business miles using an IRS-approved program. In addition, this means a major change to the SCIF’s personal use policy.

“Once fully implemented there will be no provisions for personal vehicle use,” Vargen said. “To use a private vehicle and be reimbursed for business miles, we do require employees carry the State-minimum level of insurance and employees cannot drive motorcycles. We believe that over time our decision to limit reimbursement to business miles only is appropriate and will result in long term savings.”

The organization began major changes to its fleet policy in the spring and worked to get its employees on board with the policy changes.

“It has been evolutionary process,” Vargen said. “The fundamental changes to our fleet policy, however, began in April 2010.  We were careful at each stage to provide employees with ample time to plan for the change and actively engaged in discussions with the unions who represent our employees.”

By Greg Basich