Pasadena's City Fleet Proves to Be Model Operation

To most American, Pasadena means the shirt-sleeve temperatures seen via TV at the Rose Bowl on New Year's Day. Indeed, the Rose Bowl is one of the most widely known symbols of Pasadena, the community of 128,000 people, located about 15-minutes' drive east of Los Angeles. In fact, the city even has a Rose Bowl department, ranking alongside Police, Fire, Paramedic, Water and Power, Public Works, and Parks and Community Services.

When counted together, those departments run a total of 700 vehicles. Administering and maintaining those vehicles requires a staff of 48, including tow accounting clerks, one spec writer, one shop supervisor, four shop foremen, 20 mechanics and two apprentices, seven service attendants, one welder, one communications (radio) shop supervisor, five communications technicians, and three parts countermen.

If the Pasadena fleet operation runs smoothly and efficiently (and it does), it's the result of a team effort. While every team has its coach, the Pasadena fleet has someone who sets the personable tone for the operation and brings experience and knowledge sufficient to facilitate intelligent planning and smooth operation. That person is Bruce Williams.

The city's fleet of 700 vehicles is only about one-fifth cars. The remainder ranges from parking enforcement scooters to trash trucks, with a predominance of light-duty Class One and Two pickups. But a little more on those cars first.

The city owns about 100 subcompacts and compacts and compact administrative sedans-cars such as Chevettes, Pintos, and Escorts. Plus, there are 33 police pursuit Malibus and Impalas. Expect for the pursuit vehicles, Pasadena's cars come from Hertz and Avis. Williams finds buying used rentals attractive because of depreciation-about $1,500 off the top of the new price. And while most of the used daily-rental cars come with an average of 20,000 miles, some have as few as 12,000. Not only have the vehicles been excellently maintained, but Pasadena gets an additional $500 price break for purchasing more than 20.

Apparently, the arrangement has also proven advantageous to the daily rental firms, at least in terms of P.R. At the last Rose Bowl parade, Hertz had a number of their Fairmonts carrying signs saying "We sell to Pasadena." Other cars and trucks are acquired through the bid process, with a favorable eye turned to bids from local dealers.

Williams believes there are subtle differences between the manufacturers, "but I don't think it's worth making a battle over," he says. He has, however, come to appreciate the value of standardizing, regardless of manufacturer. "First," he says, "you realize a reduction in your parts inventory. And second, you realize an increase in mechanical efficiency with maintenance personnel who then work on only one manufacturer's products."

The 500-plus trucks in the city fleet fall into almost every possible category, with GVW ranging as high as 55,000 pounds. The van side of the fleet includes five ambulances, six half-ton vans, and 14 three-quarter-ton vans. The truck fleet includes 48 compact pickups, 38 three-quarter-tons with utility bodies, 30 one-tons with utility bodies, six open-box one-tons, 35 dunp trucks, 5 chipper trucks, 19 50-cubic-yard trucks, such as sewage and tank trucks. The remainder of the fleet is made up of vehicles and equipment such as scooters, motorcycles, golf-green maintenance equipment, and fire fighting vehicles.

Looking at the compact pickups, we find imports as well as domestics. Williams expresses a "buy American" preference, but notes that the imports are very price competitive. Additionally, Williams notes that the distinction between import and domestic certainly is blurring, "with sometimes as high as 35 percent of the parts on a 'domestic' compact being imported, and with Nissan building trucks in Tennessee."

As to utility bodies, the Pasadena fleet has a preference for steel. Williams is, of course, aware of the inherent savings because of the lighter weight of aluminum, but favors the durability of steel. "It seems that the aluminum ones we've tried didn't last as long, and we had problems with rivets popping. They seemed to be a little more susceptible to the vibration and torsional stress." But Williams doesn't dismiss aluminum bodies out of hand. "You can get around those problems with some pretty tight engineering - after all, they build airplanes out of aluminum.

When judging replacement time, the city doesn't use mileage as a first level criterion. "We use age-life expectancy in terms of months," Williams explains. "Our subcompacts, for example, have an 84-month life. During that period, the smaller sedans will typically log 60,000 miles, though some clock only around 40,000."

The emphasis on number of months stems from accounting considerations. Williams explains: "You're looking at the elements used to create a rental rate structure, which is how our fleet has been structured financially." Essentially, this means that the city's different departments use something similar to a rental rate for the use of a certain class of vehicles. The cost for a department to "rent" a subcompact, for example, is $164 per month including fuel.

The "rental" rate is a combination of replacement cost and maintenance and operating costs (M and O). Speaking of the relation between the two, Williams says that he likes to keep those costs within about a 20 percent margin of each other. Class 201 is compact pickups; Williams' current figures are a replacement cost of $103 and an M and O cost of $110, for a total of $213 per month. "If the replacement cost is considerably lower than the maintenance costs, it's going to cost you a few million dollars to replace your fleet, to come up with equal costs."

In terms of fleet management, the relation between replacement costs and M and O costs has given Williams an opportunity to check where the lines cross. "I' m preparing a report now, circling vehicle classes where the replacement costs exceeds M and O. I'll then go back and take a look at the age of all the equipment in class 220, for example, and calculate whether we are replacing those vehicles too soon."

Williams has been happy with this accounting system because the cost of each vehicle is easy to understand and can be budgeted by everyone involved. "It's really a good budget tool to work with, because the user departments know what their costs are going to be for the year."

But there is one flaw to this method-namely that costs are predicated on performance from the previous year. For this and other reasons, the Pasadena fleet will shortly be making the switch to direct billing.

Williams is looking forward to being "a little bit further ahead of the game. With direct billing, you're only a month behind, instead of a year," he says. But he doubts his department will ever get away from preparing an estimated cost per unit for his users. And he suspects he will still have to negotiate throughout the year on monthly bills in a manner similar to how an individual negotiates when he takes his vehicle into a shop.

The main advantage of direct billing will come in having more timely and accessible fleet information. "Our department heads should be able to pin down problems more readily, instead of having things lumped together."

As an example, Williams mentions how the rental rate system encompasses all the costs, including operator negligence, abuse, or accidents. For example: " If you are looking at 18 sedans in class 112," he says, "nine are assigned to the Water and Power Department and nine are assigned to the Police Department. The Police Department damages vehicles more frequently because of the nature of its work. When you group vehicles together by class ad average out the costs, one department ends up subsidizing the rough usage necessary in another department. the alternative is to break the costs down. As fleet manger, I can then go to the department head, discuss what it's costing to maintain his vehicles, and analyze the reasons."

The fleet department has been using a Digital 1124, with 56 megabytes of memory, but because of storage requirements, Williams is upgrading to a system with 406 megabytes. Software is Gelco's fleet maintenance information system. Williams has sent two members of his staff to Minneapolis for user training. The system offers a selection of 40 possible reports with nine main menus and about 12 submenus. Both hardware and software were acquired for $150,000 in '82, and Williams has scheduled to cover those costs by '86.

In the past, the fleet department has suffered because of the start-stop funding problems inherent with city government. But Williams' close working relationship with city management has developed a program through which fleet won't be locked into the fiscal calendar.

Although Williams won't be freed from the bid process, he will have a rotational program where he can purchase on a monthly basis, thus avoiding end-of-fiscal-year/beginning-of-fiscal-year lapses. "It's essentially a question of cash flow," Williams explains. "In the past, if the new fiscal year saw fleet being authorized $1.5 million to replace equipment, that money sat for three or four months before being used. Well, we could be earning some interest on the money. So the basic philosophy behind Fleet Float, which is what Pasadena management is calling the new fleet funding program, is this one of cash float."

Williams estimates that the average carryover in Fleet Float is about $800.000. "If we want to use it for something else, we'll go into a different float. I'll never see or feel any different with the cash flow, but the city will be making some money, about $500.000 by current estimates."

The Pasadena fleet operation brings into focus one important question-costs. Each fleet is guided by an overall philosophy, and that policy is an extension of how management views fleet in relation to overall business. Williams enunciates his overall philosophy as being the challenge of achieving the lowest operating cost. "We're not in business to make a profit," he says, "we're in the business to keep the costs are low." However, equal in his mind is the importance of providing his users with the service they require.

Williams believes there is a tradeoff in the levels of service that a fleet management operation can provide. "At one extreme is the question, 'Are we providing a Cadillac level of service on tax dollars? At the other extreme is the question, 'Are we sufficiently achieving customer satisfaction, risk management, and liability management? "Williams believes his job is to tread the fine line between the two. During his tenure as head of fleet operations, he has reduced the size of the city fleet by about 30 percent. Gone are the WWII Jeeps and vintage '29 International Harvester flatbeds that were still on the back lot. But in addition to reducing inventory, Williams brought fleet composition and condition to a higher quality level. Within four years, be reduced average downtime from 25 percent to 4 percent.

In terms of achieving goals, Williams counts himself lucky to work with a supportive city board that recognizes the financial elements involved in managing the fleet. "We have an aggressive city manger," Williams notes. "He has taken an active interest in fleet and supports anything that we can do to cut the costs down." But Williams believes that fleet manger is responsible to a large extent for the type of relationship he has with management.

One way that fleet mangers traditionally trim cost is by focusing energy on obtaining the highest disposal dollars possible. But, as Williams well knows, "you have to have some incentive if you want to play an active role in vehicle disposal. Of course, the best incentive is that the money you make from disposals goes back into your replacement fund." But Williams notes that he's worked for other municipalities where the money simply went back into a general fund that others dipped into.

Pasadena's vehicles are disposed of locally through Ken Porter Auction Co. for 10 percent of the sale price. Included in that figure is pickup, any necessary vehicle preparation, and handling. "We cancel the pink slips on the registrations that's it," Williams says. From his experience working with the fleet of Los Angeles county, he projects the cost of running an in-house auction ranges between 7 and 8 percent. So the time saved by working with an auction more than makes up for the 2 percent difference.

There's another benefit of auction sales-"no relatives." Williams explains: "There have been documented cases where employees who were responsible for preparing the equipment for auction did more repairs than were necessary, then had their neighbors come and bid. A contracted auctioneer at least adds another level of difficulty to discourage this."

Many truck-operations fleets report that their vehicles are pretty beat up by the time they're ready for recycling. And although detailing policies differ from department to department, Williams feels the city's truck fleet is in better than average shape, "One example of good equipment care is the Water and Power department; they're top notch about keeping their vehicles in a good state of repair. They have a long-standing policy that employees don't just stand around leaning on their shovels if they can be doing something, even polishing their truck. That policy affects attitude which has an eventual positive impact on the condition of the equipment."

Williams' department recently developed a new reporting procedure for vehicle misuse, but he believes misuse is not so much deliberate and malicious as it is a question of operator training. "That is the avenue we are choosing to travel first-making sure that people know how to operate some of the highly specialized equipment before they take it out."

Most maintenance is performed in-house. "We don't do transmissions, body, paint, glass, upholstery, and front end alignments. We have that work done at local shops, or we let the departments contract it out more cheaply," he says. As to in-house maintenance billing, the fleet shop rate is $30 and hour. The shop maintains a parts inventory of 315,000 pieces, reflecting a stock of some 6,100 parts numbers. Thanks to computerization, the fleet department is able to project just how many oil filters, for example, they're using per year. They then get bids from contract vendors based purely on their consumption. Contracts are awarded to approximately 100 vendors generally for a year's term, though Original Parts Supply, the city's major supplier, has a two-year contract totaling $360,000. "A regional retailer can't buy parts as cheaply as I get them," Williams boasts. "They don't like to hear that, but still..."

An inventory is performed annually, but parts are ordered nightly, based on low-inventory log sheets added to periodically during the day. As soon as a part is dispensed, the parts man logs the transaction onto a computer. Not only does the computer provide price per item and all the data necessary for billing, but it registers how many of that part should still be in inventory.

The fleet has what Williams likes to call a fuel farm and an emergency fuel allocation program. In the event of a fuel shortage, the city would still be able to operate essential services such as health, sanitation, and police for six months without taking delivery of fuel. Williams does spot bidding for fuel, and has a contract vendor as a backup. "When we fill the 40,000 gallon remote fuel site, I usually make the contract bidder go about 10 cents less a gallon," Williams explains. "Then it costs me about four cents a gallon after it is pumped into that tank to call a hauler to drop it off at my other fuel sites. So I still save money. Plus, every three months, I am rotating my reserve fuel supply."

In managing the Pasadena fleet, Williams sets an example of how an energetic approach can create a harmonious system that functions to the satisfaction of everyone involved. Sometimes fleet administrators say that their management views fleet as a "necessary evil." But that "necessary evil" can be transformed into something else. The Pasadena city fleet isn't a business, because it doesn't operate at a profit. Neither is it a lackadaisical free-ride. Instead, it's a combination of thoughtful planning and personal arbitration, achieving both economy and service.