PITTSBURGH - City officials say a proposed five-year, $36 million deal to manage and maintain Pittsburgh's fleet of 1,000 vehicles won't save money, but opens the door for a city-county merger of such services, according to the Pittsburgh Tribune-Review.

"This is the first step in the process in joining forces with Allegheny County," said Chet Malesky, the city's deputy finance director. "The first step here is that we're on the same page in terms of contractual obligations. Now, we're going through the administrative process."

The contract, introduced to City Council on Tuesday, would allow Cincinnati-based First Vehicle Services to spend $5.5 million a year on scheduled maintenance and repairs and $1.7 million a year on emergency repairs. Both types of upkeep would increase 2.9 percent yearly, with an optional 2-year extension.

Although costs increased annually since the city's previous contract in 2005, Malesky said the contract requires First Vehicle keep at least 97 percent of the city's fleet operable. The previous contract required 95 percent. This contract triples penalties First Vehicle could face for not abiding by the deal's terms, he said.

The city and county jointly requested proposals for a fleet maintenance provider in March, and in June a six-member evaluation committee voted to accept First Vehicle's proposal. First Vehicle is responsible for maintaining city and Pittsburgh Water and Sewer Authority vehicles and operating the city motor pool.

"This is a very good thing for the residents of Pittsburgh," said mayoral spokeswoman Joanna Doven. "It will put us one step closer to a full contract with the county, which could then provide much-needed cost savings."

If approved by council, First Vehicle Services would be the same provider for the city and county over the same length of time. A joint city-county garage would be the next step, but Malesky couldn't say how much the city or county might save by operating under the same contract, reported the Pittsburgh Tribune-Review.