NAPLES, FL – The City of Naples’ city council is considering an informal proposal submitted by an outside vendor, First Vehicle Services (FVS), to outsource fleet maintenance services provided by the City’s Equipment Services Division. The proposal includes on-site fleet maintenance. City staff’s analysis of the informal proposal concluded potential savings are less than estimated by FVS and could in fact cost more.
According to analysis by the City in the report, the proposal from the outside vendor would actually cost $46,741 more than what the City is paying because data from the City’s Finance Department for the 2009-2010-FY show the Equipment Services Division operates under budget and reinvests money saved into improvements designed to further reduce costs.
FVS claims the City would save $272,877 or 18.82% compared to 2010 -2011 budgeted expenses. The vendor’s projected cost for service is $1,176,841, which the company is comparing to the City’s 2010 - 11 budgeted expenditures of $1,449,718.
Further City analysis of projected budgets shows actual expenditures for Equipment Services for the 2009 – 2010-FY came in at 99 percent of the budgeted amount. If this amount is projected to the 2010 – 2011-FY budget for Equipment Services, the vendor’s proposal would cost less than what the City is paying, though there are a number of caveats that could eliminate any potential savings from outsourcing.
First, the vendor’s proposal does not include Naples’ City Administration and Technology Services cost of $138,496, which reduces savings from the proposal to $120,326. In addition, the proposal excludes utility expenses, internal operating expenditures (which includes maintenance of City-owned tools), Faster Fleet software support, Trak (fuel dispensing) software support, wash rack and fuel site maintenance, maintenance of garage doors, fire systems, other infrastructure, and fire truck inspection.
Other costs not included in the proposal include self-insurance for this operation remaining on-site, additional employee time from other departments to monitor repair activities associated with their departmental equipment, and costs related to contractual supervision of the out-sourced service.
City staff recommended the Naples city council not formally request proposals for outsourcing unless the council has a strong commitment to outsourcing.
