Report to The Office of Finance and

Management

City-County Vehicle Fleet

Office of Audit and Performance

March 3, 2018

City-County Vehicle Fleet Report

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Table of Contents

EXECUTIVE SUMMARY ......................................................................................................................................................... 2

VEHICLE FLEET REPORT ........................................................................................................................................................ 4

BACKGROUND ..................................................................................................................................................................... 4

OBJECTIVES.......................................................................................................................................................................... 4

FLEET STUDY ........................................................................................................................................................................ 5

VEHICLE ASSET COUNT ........................................................................................................................................................ 5

FLEET COMPOSITION ........................................................................................................................................................... 5

FLEET CONDITION ................................................................................................................................................................ 6

TAKE HOME VEHICLE PROCESS ............................................................................................................................................ 9

OBSERVATIONS ................................................................................................................................................................. 10

RECOMMENDATIONS ........................................................................................................................................................ 11

VEHICLE LIFECYCLE ............................................................................................................................................................. 11

VEHICLE RETIREMENT AGE ........................................................................................................................................................... 11

STANDARD VEHICLE LIST .............................................................................................................................................................. 11

COMPREHENSIVE REPLACEMENT PLAN ........................................................................................................................................... 12

VEHICLE FINANCE PLAN ............................................................................................................................................................... 14

FLEET MANAGEMENT AND COMMUNICATION .................................................................................................................. 15

VEHICLE USE APPLICATION AND CONTRACT ..................................................................................................................................... 15

VEHICLE MANAGEMENT GROUP .................................................................................................................................................... 15

UNIFORM VEHICLE ASSET SYSTEM ................................................................................................................................................. 16

VEHICLE DATA DASHBOARDS ........................................................................................................................................................ 16

FLEET STRUCTURE AND PROCUREMENT ............................................................................................................................ 16

INDIANAPOLIS FLEET SERVICES ...................................................................................................................................................... 17

PROCUREMENT PROCESS ............................................................................................................................................................. 18

IMPLEMENTATION PROCESS.............................................................................................................................................. 19

GREEN INITIATIVES ............................................................................................................................................................ 20

ALTERNATIVE FUELS .................................................................................................................................................................... 20

EMISSIONS ................................................................................................................................................................................ 21

POWER OFFSETS ........................................................................................................................................................................ 21

INFRASTRUCTURE ....................................................................................................................................................................... 21

PROJECT TEAM .................................................................................................................................................................. 22

REFERENCE LIST ................................................................................................................................................................. 23

City-County Vehicle Fleet Report

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EXECUTIVE SUMMARY

BACKGROUND

The Office of Audit and Performance (OAP) was engaged by The Office of Finance and Management (OFM)

to provide consulting services regarding the City-County vehicle fleet.

The City-County fleet management is currently maintained with a centralized vehicle maintenance

function, performed by the Indianapolis Fleet Services Division (IFS) of the Department of Public Works

(DPW); and a decentralized operational function, managed separately by various City-County departments

and agencies. IFS uses M5, an industry standard software, for tracking vehicle assets and maintenance.

Departments have access to M5 to track their fleet assets, but each department chooses its method of

tracking vehicle data.

OBJECTIVES AND SCOPE

The primary objectives of this non-audit consulting engagement were to:

1. Assess the City-County vehicle fleet (count, composition, age and mileage) and evaluate fleet operations

with a focus on:

a. The take-home vehicle process; and,

b. Vehicle procurement and disposal life cycles.

2. Recommend improvements to fleet operations and administration regarding:

a. Best practice for fleet management;

b. Cost saving initiatives; and,

c. Green initiative options.

FLEET STUDY

The City-County vehicle fleet has an estimated value of $158 million and consists of 4,707 vehicle assets.

This report focuses on the rolling stock1 of 3,602 vehicles2. Approximately 92% of rolling stock are

assigned to five departments: Indianapolis Metropolitan Police Department, Department of Public Works,

Marion County Sheriff’s Office, Indianapolis Fire Department, and the Department of Business and

Neighborhood Services. The fleet is comprised of 2,010 police pursuit vehicles; 1,106 passenger vehicles;

402 special purpose vehicles (e.g. garbage trucks, fire trucks, etc.); and 84 motorcycles. This includes 204

plug-in hybrid and/or electric vehicles, obtained under the Vision Fleet contact. The average age of the

fleet is 8 years, which compares unfavorably to the 3.6 years stipulated by the City-County vehicle manual

policy, based on the fleet composition. The average mileage of the fleet is 222% greater than what the City-

County vehicle policy mandates based on the fleet composition.

1 All two-, four-, and multi-wheel, self-propelled vehicles 2 03/14/2017 vehicle count determined by a reconciliation of M5 vehicle count and various City-County department/agency counts. Final reconciliation

figures were provided to IFS and entered in M5.

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RECOMMENDATIONS 1. Extend the vehicle retirement age for SUVs and Police Pursuit Vehicles (PPV) from five years to six

years to better align the vehicles retirement mileage and age limits.

2. Institute a Standard Vehicle List to establish vehicle fleet standards, ensure fit for purpose of vehicle in

stock and expedite vehicle purchases.

3. Implement a Comprehensive Vehicle Replacement Plan to strategically purchase and dispose of

vehicles, optimizing fleet size, maturity and usage. A recommended five-year plan has been provided as

part of this report.

4. Explore the purchase of vehicles through the Indiana Bond Bank Hoosier Equipment Lease Purchase

(HELP) program for cost savings and expedited procurement option.

5. Create a process of Vehicle Use Applications and Contracts to set requirements and expectations for

operating a vehicle.

6. Establish a Vehicle Management Group to oversee administration of fleet policies and management.

7. Integrate M5 and PeopleSoft to create a uniform vehicle asset system.

8. Establish a vehicle data dashboards for each department.

9. Centralize all fleet management functions under IFS to enhance efficiency and consistency, which is a

best practice for large fleets (greater than 500)3.

10. Adopt a streamlined process for vehicle procurement to align with recommendations.

11. Endorse “green” initiatives to reduce emissions, adopt alternative energies, and empower departments

to embrace eco-friendly options. Specifically,

a. Transition all passenger class vehicles to alternative fuels to move closer to the City-County

emission goals.

b. Convert all appropriate sedan pool vehicles to electric cars.

c. Conduct transmission tuning for increased fuel economy.

d. Offset electricity emissions by enrolling in green energy credit programs. e. Increase the number of City-County electric vehicle charging stations.

3 Marlin, J. (2016, July 13) Centralizing a Decentralized Fleet. Retrieved from http://www.themunicipal.com/2016/07/centralizing-a-decentralized-

fleet/)

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VEHICLE FLEET REPORT

BACKGROUND

Due to the decentralized nature of fleet operations and administration the Office of Finance and

Management (OFM) engaged the Office of Audit and Performance (OAP) to provide non-audit consulting

services to inventory and assess the fleet and identify opportunities for efficiencies within the fleet and

fleet administration.

The City-County fleet management is currently operated with a centralized vehicle maintenance function,

performed by the Indianapolis Fleet Services Division (IFS) of the Department of Public Works (DPW); and

a decentralized operational function, managed separately by various City-County departments and

agencies. IFS uses M5, an industry standard software, for tracking vehicle assets and maintenance.

Departments have access to M5 to track their fleet assets, but each department may choose any method of

vehicle tracking. Examples include Excel, PeopleSoft, and WISE.

The City-County vehicle fleet has an estimated value of $158 million and consists of 4,707 vehicle assets.

Approximately 92% of rolling stock are assigned to five departments: Indianapolis Metropolitan Police

Department (IMPD), Department of Public Works (DPW), Marion County Sheriff’s Office (MCSO),

Indianapolis Fire Department (IFD), and Business and Neighborhood Services (BNS). The fleet is comprised

of 2,010 police pursuit vehicles; 1,106 passenger vehicles; 402 special purpose vehicles (e.g. garbage

trucks, fire trucks, etc.); and 84 motorcycles. This includes 204 plug-in hybrid and/or electric vehicles,

obtained under the Vision Fleet contact. This report centers on the rolling stock4 of 3,602 vehicles5 (further

references to the vehicle fleet will be for the rolling stock only). The average age of the fleet is 8 years,

which compares unfavorably to the City-County vehicle manual policy, based on the fleet composition, of

3.6 years. The average mileage of the fleet is 222% greater than City-County manual dictates base on the

fleet composition. According to the National Association of Fleet Administrators the City-County fleet

condition would be described as critically old.

OBJECTIVES

The primary objectives of this non-audit consulting engagement were to:

1. Assess the City-County vehicle fleet (count, composition, age and mileage) and evaluate fleet operations

with a focus on:

a. The take-home vehicle process; and,

b. Vehicle procurement and disposal life cycles.

2. Recommend improvements to fleet operations and administration regarding:

a. Best practice for fleet management;

b. Cost saving initiatives; and,

c. Green initiative options.

4 All two-, four-, and multi-wheel, self-propelled vehicles. 5 03/14/2017 vehicle count determined by a reconciliation of M5 vehicle count and various City-County department/agency counts; Final reconciliation figures were provided to IFS and entered in M5.

City-County Vehicle Fleet Report

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FLEET STUDY

VEHICLE ASSET COUNT

A comprehensive list of current vehicle assets was created to ensure data accuracy. We started by

collecting department vehicle lists and M5 data. Inaccuracies were remedied in M5 to reflect the current

vehicle count. We requested IFS give OFM file access permissions in M5 to ensure OFM would have a clear

and accurate understanding of the City-County vehicle fleet.

The current state of the fleet, when considering rolling stock only, has 3,602 vehicles. As shown in the

following table, the five largest fleets in the City-County are assigned to the police, public works, business

and neighborhood services, fire departments and the Sheriff’s Office. This equates to 92% of the fleet in

aggregate.

FLEET COMPOSITION

The largest department fleet is IMPD with 2063 vehicles or 57% of the rolling stock. The following graphic

illustrates the distribution of the vehicle fleet by type.

The fleet is comprised of 2,010 police pursuit vehicles (PPVs) (1973 Sedans e.g. Ford Crown Vic and 37

SUVs e.g. Ford Escape); 1,106 passenger vehicles (455 Sedans e.g. Ford Focus, 324 Trucks e.g. Ford 150,

121 SUVs e.g. Ford Escape, and 206 Vans e.g. Chevy Uplander); 402 special purpose vehicles (254 Heavy

Duty e.g. Tow Truck, 107 IFD Specialty e.g. Ladder Truck, and 41 Refuse); and 84 motorcycles (e.g. Harley

FLHP).

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FLEET CONDITION

Several aspects of the City-County Fleet were analyzed in order to gain insight on its operating condition

(age and mileage). To create a relevant data set for each department we reviewed departmental counts,

type break downs, and average age and mileage for each. The following charts and graphs depict the

current condition of the City-County vehicle fleet; the size of the circles correlates to the number of vehicles

in each category.

On average the vehicles types are closing in on retirement limits set by the Indianapolis Fleet Manual

subsection 6.1. Each vehicle type except for IFD, Motorcycle, and Refuse6 have a mileage limit of 100,000

miles. Age limits for vehicle types vary with Refuse at 4 years, SUVs, Motorcycles, and PPVs set at 5 years

Sedans, Trucks, and Vans at 8 years, , and Heavy Duty, and IFD Specialty set at 15 years.

6 IFD and Refuse have no mileage limits and Motorcycles are set to 50,000

Heavy Duty

IFD Specialty

Motorcycle

RefuseSedan

Sedan - PPVSUV

SUV - PPV

Truck

Van

0

20,000

40,000

60,000

80,000

100,000

120,000

0 2 4 6 8 10 12 14 16

Ave

rage

Mile

age

Average Age (Years)

Age and Mileage by Vehicle Type

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The graphs below show vehicles across the City-County fleet are older and have more mileage than what is

considered optimal. The industry standard defines optimal age and mileage as half the average retirement

limits. The retirement limit for each vehicle type is set by subsection 6.1 of the Indianapolis Fleet Manual.

The fleet manual was developed by City-County leadership and IFS. The overall City-County average

retirement limit was calculated using the weighted average of the entire vehicle fleet. Departments’

retirements are based on their vehicle composition. For the purpose of the chart below, the average

optimal age for the City-County is four years. The optimal mileage band for the City-County is constant at

50,000 miles. The optimal age for departments varies from two years for DPW – Solid Waste, to five years

for IFD.

The chart below depicts the difference between the mandated retirement age and the fleet’s current age

and respective mileage. Departmental average retirement mileage is 100,000.

Animal Care

Assessor

Auditor

BNS

Community Corrections

Coroner

Crime Lab

Department of Metro Development

DPW

DPW - Solid Waste

Homeland Security

IFDIFS

IMPD

Indiana Task Force 1

OFM

Parks

ProsecutorPublic Defender

Public Saftey

MCSO

Superior Court

Surveyor

Treasurers

0

20,000

40,000

60,000

80,000

100,000

120,000

0 2 4 6 8 10 12 14 16

Mile

age

Age in Years

Average Age and Mileage by Department

Retirement band (City County Average)

Optimal band(City County Average)

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The following table compares the average age and mileage of each department’s vehicle fleet to the vehicle

retirement limits established in the City-County vehicle manual. Departments whose fleets have an average

age or mileage that is less than the retirement limit are shown in green. Departments whose vehicle fleet is

higher than the retirement limits are shown in red.

The fleet has more mileage and is older than what is optimal based on

what the fleet manual dictates. The maintenance will be

disproportionally higher for vehicles above mandated limits. Increased

maintenance equates to increased cost for the City-County. The increased maintenance will disrupt normal

operations beyond routine maintenance as departments have to adjust to a vehicle being out of operation.

Department Vehicle

Count

Average

Age

Average

Retire Age

Difference Between

Retirement and

Average Age

Average Mileage Per

Department

Superior Court 16 4.50 7.81 -3.31 50,650

Coroner 12 5.08 8.00 -2.92 57,597

BNS 114 5.11 7.27 -2.16 43,484

Community

Corrections

14 6.29 8.00 -1.71 52,276

Public Defender 1 7.00 8.00 -1.00 110,267

Surveyor 5 6.20 6.80 -0.60 44,688

Indiana Task Force 1 14 8.71 9.14 -0.43 14,602

Department of

Metropolitan

Development

2 8.00 8.00 0.00 51,636

Assessor 2 8.50 8.00 0.50 96,095

IFD 294 10.77 10.18 0.59 61,300

IMPD 2062 6.07 5.37 0.69 81,890

Crime Lab 13 8.77 8.00 0.77 40,053

MCSO 362 7.07 5.77 1.30 94,533

Public Safety 7 9.14 7.57 1.57 44,422

DPW 485 11.50 9.78 1.72 71,400

OFM 1 10.00 8.00 2.00 38,964

Animal Care Services 33 10.15 7.64 2.52 98,455

DPW - Solid Waste 41 6.95 4.00 2.95 55,837

Auditor 1 11.00 8.00 3.00 74,736

Treasurers 1 11.00 8.00 3.00 81,445

Parks and Recreation 46 11.15 7.87 3.28 66,579

Prosecutor 16 11.38 8.00 3.38 115,021

IFS 42 13.24 8.86 4.38 56,594

Homeland Security 18 11.56 7.11 4.44 82,529

Total 3602 8 6.64 1.36 77,000

Average is less than retirement limit

Average is greater than retirement limit

Five largest departments

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TAKE HOME VEHICLE PROCESS

According to the Take Home Vehicle Manual, non-exempt7 City-County employees who take vehicles to

their residences are required to file a Take Home Vehicle contract with the IFS. There are only 75 vehicle

use contracts8 on file. To obtain and keep a Take Home Vehicle, non-exempt employees are required to:

1. File a Usage of Vehicle for Commuting application.

2. Obtain approval from the Director of IFS.

3. Maintain a monthly Vehicle Mileage Log.

4. Submit logs to Supervisors.

5. Re-submit applications on an annual basis.

6. Drive more than one-hundred (100) hours or two-thousand (2,000) miles9 within a twelve (12) month

period or they may become ineligible for take-home status and are placed in a car pool.

Our review of the documentation on file indicates these steps are not consistently being completed, and as

a result take home vehicles are not properly documented and tracked. The inconsistency is due to a lack of

controls in and enforcement of the take home vehicle process10.

IFS has 221 take home vehicles registered. Out of those vehicles, 123 did not meet the minimum mileage

requirement for 2017. 74 drivers did not complete a mileage log for IFS.

7 Exempt employees include: IMPD Sworn Officers, IFD/BNS Sworn Officers, MCSO Sworn Officers, and Elected Officials. 8 Vehicle use contracts are contractual agreements between employees and the City-County that define the rules and regulation governing

employees’ use of assigned City-County fleet vehicles. 9 These criteria can be amended by IFS with approval from OFM. IFS may establish other suitable minimum use criteria with specific personel. 10 OFM has drafted a revision of the Take Home Vehicle Manual, which is currently under review. The potential changes were considered when

creating the recommendations made in this report. If the report recommendations are adopted, OAP recommends the final revisions be

approved by the Vehicle Management Group, discussed later in this report.

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OBSERVATIONS

1. The decentralized nature of the current fleet operation structure and procurement structure limits the

ability to implement and ensure consistency, efficiency, transparency of vehicle use, and data

inaccuracies. The structure does not provide for a comprehensive method of tracking, maintaining and

monitoring the vehicle fleet.

2. To assemble the vehicle inventory, it was necessary to reconcile M5 information with individual datasets from various City-County departments and agencies. Reconciled information was

subsequently entered into M5; however, there is no mechanism in place to monitor synchronization of

multiple systems, so inaccurate, misaligned vehicle inventory may occur again.

3. The City-County vehicle fleet is aged beyond industry recommended levels11. The industry standard

recommended average age and mileage based on the City-County fleet composition (optimal age and

mileage) is determined by half of the City-County mandated retirement age and mileage. One-third of

departments have an average fleet mileage greater that level; while, no department has an average fleet

age less than the optimal level. The following table summarizes the fleet age and mileage by

department.

4. The City-County Take-home Vehicle Policy requires all non-exempt employees with take home vehicles

to execute a Usage of Vehicle for Commuting application. There are 22112 take home vehicles, yet only

75 forms on file. The files are maintained by IFS and the department/agency to which vehicles are

assigned.

5. The City-County does not realize economies of scale, ensure the proper fleet size, or maximize revenue

from the disposal of vehicles due to the disaggregated fleet management process in place. For example,

on average, the City-County receives $500 from the sale of non-police pursuit sedans (with an average

age of 12 years). By selling younger vehicles at an increased value and using more favorable disposal

processes, the City-County could realize an additional $2,000 per vehicle sold.

6. Maintenance of police pursuit vehicles does not always occur within manufacturer-recommended

intervals.

7. SUVs and Police Response Vehicles (PPV) on average cross the threshold of 100,000 miles at six years

old, indicating that the City County retirement age is shorter than optimal.

11 Limit is based on half of an entity’s desired maximum age. 12 This number is derived from IFS’ Take Home Vehicle Master List

Department Vehicle

Count

Average

Age

Average

Retirement

Age

Difference Between

Retirement and

Average Age

Average Mileage

Per Department

BNS 114 5.11 7.27 -2.16 43,484

IFD 294 10.77 10.18 0.59 61,300

IMPD 2062 6.07 5.37 0.69 81,890

MCSO 362 7.07 5.77 1.30 94,533

DPW 485 11.50 9.78 1.72 71,400

All Others 285 9.48 7.44 2.04 64,553

Total 3602 8 6.64 1.36 77,000

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RECOMMENDATIONS

The following components are building blocks to optimize the current state of the fleet. Recommendations

are meant to improve efficiency and effectiveness while addressing observations made during the fleet

study.

VEHICLE LIFECYCLE The procurement and disposal process also warrants a review and improvement. There is no set list of

vehicles departments can purchase from nor is bulk purchasing common practice for the City-County fleet.

The bulk of City-County vehicles are purchased outright using bond proceeds, rather than a traditional

lending agreement. The City-County’s primary means of vehicle disposal is quarterly auctions held by

Kesler-Schaefer Auto Auction (KSA). KSA charges a minimum of $50 per vehicle sold. The average auction

is attended by 30-50 buyers. The bulk of vehicles sold are Police Pursuit Vehicles (PPV) Sedans, followed by

Sedans. IFS scavenges PPV Sedans for usable parts and sells the rest as scrap in the auction. The average

profit from PPV Sedan sales is less than $500. The minimum $50 fee from KSA is approximately 10% of all

PPV and Sedan vehicles sales. These inefficiencies can be remedied with the following recommendations.

Vehicle Retirement Age

The current City-County retirement age of PPV Sedans and all SUVs is five years. To better reflect the

lifespan of these vehicles, their retirement age should be increased to six years. Six years is the

approximate age when these vehicle classes cross 100,000 miles.

Standard Vehicle List

Implement the Standard Vehicle List (SVL) drafted by the City-County’s Purchasing Department. The

advantages are as follows:

1. Streamlined purchasing process by eliminating approval steps for vehicle selection

2. Increased bargaining power for purchasing

3. Reduced maintenance cost due to fleet uniformity

The chart below depicts the proposed SVL.

Make Model Type Price

Chevy Malibu Hybrid Sedan $26,468.00

Chevy Silverado 1500 Truck $33,214.00

Chevy Colorado Regular Truck $31,479.00

Chevy Bolt e Sedan $34,401.00

Ford C max se Sedan $23,417.00

Ford C Max Titanium Sedan $26,221.00

Ford Fusion Hybrid Sedan $23,719.00

Ford Escape SUV $23,061.00

Ford f150 Reg Cab 8ft Truck $26,153.00

Ford Focus e Sedan $28,349.00

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Comprehensive Replacement Plan

The creation of a comprehensive vehicle replacement plan (CVRP) would improve vehicle sustainability

and budget consistency. A CVRP creates a road map for vehicle replacement i.e. what vehicles are

purchased, how frequently vehicles are purchased, what percentage of the fleet is replaced, etc. OFM,

IFS, and the liaisons from the five largest departments should collaboratively draft a CVRP. In the CVRP,

each vehicle type has a unique replacement cycle based on the average retirement. For example, by

targeting the five largest departments with replacement intervals of one-third every twenty months,

the five largest departments’ sedan rolling stock would be refreshed within a five-year period. The

remaining departments would receive replaced vehicles from the five largest departments. To

determine the vehicle that should be cascaded and the vehicles that should be sold, we have developed

a scoring system based on the American Public Works Association vehicle replacement guide13. The

advantages are as follows:

1. Ensure the fleet remains within the optimal range of vehicle age and mileage.

2. Reduce maintenance costs by focusing on routine upkeep rather than costly repairs and fixing

vehicle breakdowns.

3. An average increase of 4 mpg per interval would realize a $537,916 per year savings in the first

interval14 (see graph “Fuel Savings by Replacement Level”) with the savings multiplying with each

interval. The City-County can realize a savings of $1,290,998 when a cycle has completed.

13 Roselynne Reyes (2017) Catching up on Vehicle Replacement Retrieved from government-fleet.com 14 Assumptions of the current fleet’s miles per gallon were based on the City-County Office of Sustainability 2016 Fleet Vehicle Emissions Factors.

Assumptions for potential vehicles were based on the manufacture’s claims for vehicles listed on the Standard Vehicle List.

$537,916.80

$956,296.00

$1,290,998.40

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

Savings

Fuel

Sav

ings

Annual Fuel Savings by Replacement Interval

1/3 replaced 2/3 replaced All replaced

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4. By replacing vehicles sooner, there would be an increase in the resell value by approximately

$2,000 per vehicle. The increased resale value would raise profits from vehicle reselling by

approximately $375,000 per year. Further savings could be found if the City-County sold vehicles

on Govdeals.com to avoid the $50 fee per vehicle at KSA and to increase the amount of bidders for

each vehicle. (see graph “Potential Resale Value Increase Based on Kelley Blue Book Value”15)

15 https://www.kbb.com/whats-my-car-worth/. Kelley Blue Book does not have estimates for Heavy Duty and IFD Specialty class vehicles.

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Vehicle Finance Plan

The Hoosier Equipment Lease Purchase (HELP) Program16 is offered by the State of Indiana Bond Bank

to provide cities and counties a method to streamline their finance bidding process. Cities and counties

complete an application and the HELP Program conducts the bidding process, which returns

approximately five lenders for the entities. The HELP Program can provide the following benefits to the

City-County:

1. Streamline the purchasing process by reducing the amount of bids for vehicles and creating a

steady pool of funds for vehicle purchases.

2. Potential Savings of $1,340,014 when replacing passenger class vehicles (Non-heavy/ PPV/ vans)

over a five-year period or an average savings of $1,394 per vehicle. If applied to the PPV vehicles

and utility vans the potential savings jumps to $3,130,92417. 18

16 http://inbondbank.com/help-program/

17 Calculations were based on comparing interest rates from the HELP Program and the Indianapolis Bond Bank.

18 Savings were not calculated for Heavy Duty vehicles and IFD Specialties because they are not included in the SVL.

$5,237,142 $5,073,054

$5,090,880 $4,940,280

$11,569,736 $11,209,082

$7,785,120$7,546,560

$8,422,680$8,119,608

$3,006,080$2,883,040

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

$45,000,000

Co

st

Bonding Issuance HELP Program

Bonding vs HELP Program35

Ford Escape Ford C max se Ford Fusion Hybrid

Ford f150 Reg Cab 8ft Chevy Silverado 1500 Ford Focus e

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FLEET MANAGEMENT AND COMMUNICATION

Our assessment of the City-County vehicle management indicated a lack of a central administration and

City-County wide procedures has led to inconsistent vehicle management. Communication between

departments and IFS is inconsistent and has led to inaccuracies in all levels of vehicle data tracking. A lack

of communication between departments has led to unnecessary vehicle purchases. The following

recommendations address these issues.

1. Implement the use of Vehicle Use Applications and Contracts

2. Establish a Vehicle Management Group

3. Use a uniform vehicle asset system

4. Create a vehicle asset dashboard

Vehicle Use Application and Contract

An annual Vehicle Use Application and Contract (VUAC) would state the policies and procedures for

operating a vehicle and establish the responsibilities of employees when operating a City-County

owned vehicle. The form addresses maintenance and repair requirements, documents an employee’s

eligibility to drive a City-County vehicle (including having driver’s license), includes justification of

assignment of the vehicle, and documents the employees who are granted permission to drive a City-

County vehicle.

Departments, through their current fleet liaisons, would use the VUAC application to discretely list a

desired vehicle, intended purpose, specifications, the vehicle’s accessories, and all intended drivers. The

departments would provide the drivers’ proof of eligibility and responsibilities that require a vehicle.

Vehicle Management Group

Create a Vehicle Management Group (VMG) comprised of representatives from: DPW’s Fleet Services

Division, Office of Finance and Management, Office of Audit and Performance, and a representative

from each of the five largest department fleets.

Primary functions of the VMG would be to oversee IFS’s centralized administration of the City-County

vehicle fleet for such matters as:

1. Establishing City-Countywide standard operating procedures for vehicle use

2. Determining the appropriate number and type of vehicles assigned to each department or agency

3. Transferring vehicles between departments (cascading) as determined by vehicle utilization

4. Approving Vehicle Use Contracts

5. Creating the Standard Vehicle List (SVL)

6. Devising a Comprehensive Vehicle Replacement Plan (VRP)

7. Developing Vehicle Use Applications and Contracts

8. Considering the optimal organizational placement of IFS and changes to the Municipal Code as

appropriate

Current departmental fleet liaisons would be responsible for assisting IFS and OFM in the creation of an

updated standard operating procedure, VSL, and VRP.

Other advantages of the VMG are as follows:

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1. Increase cross-department institutional knowledge of the City-County fleet

2. Safeguard against M5 and departmental vehicle data inaccuracies with oversight

3. Reduce risk of redundant or wasteful vehicle purchases

4. Increase interdepartmental communication

The Vehicle Management Group would approve or deny the VUAC. When an application is approved

and the vehicle is not in stock, IFS and OFM would follow procurement processes. If the vehicle is in

stock or can be cascaded19, the drivers would then sign the VUAC contract.20

The Vehicle Management Group can use the VUAC to hold drivers and departments accountable to

proper vehicle management practices and controls. By enforcing the VUAC and denying unnecessary

vehicle purchases, the Vehicle Management Group can reduce non-essential vehicle use, commonly

referred to as “right-sizing” the fleet.

Uniform Vehicle Asset System

IFS has requested M5 be integrated into PeopleSoft. We recommend IFS’ request be fulfilled to see the

following potential benefits:

1. Increase transparency by lowering the barrier of access to vehicle data as there is currently no

means for a department to quickly reference a vehicle maintenance status.

2. Integrate vehicle data with the City-County asset management system

3. Provide departments greater ownership over their fleet data

Vehicle Data Dashboards

An information dashboard for departments could give insight into their fleet maintenance and costs.

Possible data panels for the dashboard could be maintenance schedule, repair details, and telematics

information.

FLEET STRUCTURE AND PROCUREMENT

We examined the structure of the fleet and compared it to industry recommended practices to find

efficiency improvements, introduce possible cost savings, and seek sustainability options for the fleet.

The City-County has a decentralized fleet structure comprised of a central maintenance department, but no

central administrative department. The following sources were chosen due to their focus on governmental

fleets and their recognition as primary sources in the field. The consensus from the sources below is that

larger fleets need more centralized administration. This is to capitalize on economy of scale and to ensure

the fleets can be held accountable to appropriate leadership. The City-County’s method of procurement

fails to align with industry recommendations. The enterprise has eclipsed the point where our current

decentralized structure is advisable.

19 The process of transferring a vehicle from one department to another. 20 See attachment “Proposed Lifecycle: Vehicle Use Applications and Contracts”

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Best Practice Matrix Mangement Procurement Method

Source Centralized Decentralized Lease Bonding Finance

GAO 21 X

X

Fleet Certification 22 X

X

Fleetio 23 X

X

Washington State 24 X

X

Automotive Fleet 25 X

X

Gov Fleet 26 X

X

The Municipal - Centralizing 27 X

N/A

N/A

The Municipal - Buy or Lease 28 N/A N/A

X

X

Chatham Consulting 29 X

X

X

The City-County has a decentralized fleet structure comprised of a central maintenance department, but no

central administrative oversight. Indianapolis Fleet Services runs fleet maintenance and fuel card usage,

while control over vehicle procurement and operations lies with separate City-County departments. The

decentralized structure has led to a disorganized fleet and significant breakdowns in communication

resulting in misreporting of vehicle data and an inability to realize economy of scale in the procurement

process.

The current fleet structure has led to several systemic issues which are discussed in the course of this

report. For example, vehicle mileage misreporting is prevalent. IFS tracks mileage through fuel cards

reports. These reports are generated by drivers manually entering vehicle data. IFS audits those reports

when vehicles are presented for routine maintenance. Due to the breakdown in communication, the

mileage between the report and audit often do not match.

Indianapolis Fleet Services

Recommendations to the structure of IFS go beyond its current maintenance duties and extends its

responsibilities to an administrative role that includes the following:

1. Consolidate purchasing vehicles under IFS. IFS would be the primary asset holder of City-County

vehicles. IFS would utilize a charge back system to cover the vehicle payments and maintenance

costs.

21 (2013, August 15) GAO Report Retried from government-fleet.com

22 Disciplines of Fleet Managers. Retrieved from fleetcertification.org

23 Chapman, M. (2017, March 14) 7 Habits of Highly Effective Fleet Managers Retrieved from fleetio.com

24 Washington State (2017) Fleet Management Best Practice. Retrieved from des.wa.gov

25 Utzinger, D. (1990 September) How to Manage a Government Fleet. Retrieved from automotive-fleet.com

26 (2017) Retrieved from government-fleet.com 27 Marlin, J. (2016, July 13) Centralizing a Decentralized Fleet. Retrieved from themunicipal.com 28 Wright, S. (2017, February 21) Buy or Leasing. Retrieved from themunicipal.com 29 Chatham Consulting (2015) Government Fleets. Retrieved from chathamconsulting.com

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2. Manage and coordinate in the creation of the Standard Vehicle List, Vehicle Use Application and

Contracts, standard operating procedures for fleet, and the Comprehensive Vehicle Replacement

Plan30.

3. Through the Vehicle Management Group, IFS would enforce the Vehicle Use Applications and

Contracts31. As all vehicle assets would be owned by IFS. IFS would reserve the right to withhold

any asset or service from non-compliant drivers. Possible employees exempt from IFS’s

withholding could include IMPD, IFD, and BNS Sworn Officers. Accountability measures to be

decided by IFS with departmental input to ensure limited impact on sworn officer missions.

4. Implement use of telematics in all City-County vehicles with IFS maintaining vehicle data.

Telematics is a system to track real-time vehicle data such as location, mileage, and on/off time.

Vehicle metrics are vital to understanding the state of the fleet. Depending on service use,

telematics varies in cost from approximately $20-100 per vehicle. The appropriate level of

telematics systems would be determined by the VAG, IFS, and OFM. According to Auto-

MotiveFleet.com the average time to recoup costs from Telematics is less than a year. This is due to

the following benefits from Telematics systems:

a. Improve management of fleet resources

b. Reduce fleet fuel costs by reducing vehicle idling

c. Capture of useful information for proactive maintenance

d. Reduce fleet costs by making vehicles last longer through safety and maintenance improvement

e. Validate incidents and accidents reported to ensure accuracy

f. Improve routing and appropriate vehicle use

Procurement Process

The new procurement process32 would be as follows:

1. IFS and the VMG create the vehicle replacement plan as described above.

2. Vehicle replacement interval plans are created

3. Procurement goes according to the plan made in step 2

4. If a department requires a vehicle outside of the vehicle replacement plan or interval plan it or

IFS would make a change request.

5. The VMG convenes to determine if the change request is appropriate

6. The VMG would approve or deny the change request

7. If appropriate the VMG would see if cascading would fill the need

8. If the change request is approved and cascading would not fill the request, IFS would begin the

procurement process with OFM-Purchasing

30 See section “Vehicle Lifecycle” 31 See section “Fleet Management and Communication” 32 See Attachment “Proposed Procurement Process”

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IMPLEMENTATION PROCESS

To implement these recommendations, we suggest the following flow chart as a starting point. The first

step, right sizing, would be to eliminate the assignment of non-exempt vehicles that do not meet the

minimum mileage requirements33. Second, convert Take Home vehicles that do not meet minimum mileage

requirements to pool vehicles. Third, the VMG would implement an approval process starting with the five

largest fleets in the following order: IMPD, BNS, IFD, DPW, and MCSO34. The VMG would then establish the

replacement intervals for the Comprehensive Vehicle Replacement Plan to determine how many vehicles

would be replaced35. Redundant and unnecessary vehicles would be flagged for removal36 as part of the

VMG approval process. The removal and cascading would complete the second right sizing. From this point

the replacement cycle can begin with vehicle procurement.

33 2,000 miles per year. 34 Order decided by the size and state of departmental fleets. 35 OAP has made a preliminary list of vehicles to be removed based on their condition. 36 Replaced and removed vehicles should be cascaded if their condition is better than a smaller fleet’s vehicle.

Right sizeConvert Take

Home vehicles to pool cars

VMG begins approval process

Decide on replacement

Interval

Mark vehicles for replacement

Right size

Begin cycle

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GREEN INITIATIVES

Under the emission goals mandate37, the City-County is required to reduce carbon emissions to zero by

2050. To accomplish this, the City-County must take aggressive steps towards building a tuned and

alternatively-fueled fleet.

Alternative Fuels

Alternative fuels represent the most direct way to control the City-County fleet emissions38. The City-

County can capitalize on alternative fuels by replacing all non-PPV Sedans and SUVs with alternative

fuel vehicles, i.e., hybrid and all-electric vehicles. The all-electric Ford Focus E would become the

default pool vehicle.

The current standard non-PPV sedan is the Ford Fusion with a $39,374 five-year cost to own, using the

HELP program. While the hybrid Fusion purchase cost is $2,725 greater, the five-year cost is only

$1,092 greater than the standard Fusion five-year cost. The initial cost is offset by fuel savings. A five-

year cost savings of $3,336 can be realized from the Ford Focus E over the standard Fusion. The Chevy

Bolt E has a five-year increase of $434 over the standard Fusion.39 The increase in cost per vehicle

would be offset by fuel savings and increased resale value.

The graph above indicates every Ford Fusion the City-County replaces with a Ford Focus E, the City-County would realize a savings of $3,336 over five years. The graph also illustrates the City-County can offset the $2,725 increase in price from the Ford Fusion to the Fusion Hybrid to $1,092 over a five-year period. If compared to current City-County processes the 455 sedans could be replaced with Hybrid at an increased cost of $496,860. This increase in price is eclipse by the savings from the HELP Program.

37 http://cms.indygov.org/proposals/2017/PROP17-021.PDF

38 Union of Concerned Scientists (2017) Why Fuel Efficiency Retrieved from ucsusa.org

39 Five-year cost to own calculations are based on Kelly Blue Book five-year cost to own.

$(1,092.00)

$(434.00)

$48.00

$3,336.00

$(2,000.00)

$(1,000.00)

$-

$1,000.00

$2,000.00

$3,000.00

$4,000.00

$5,000.00

$6,000.00

Five

-yea

r C

ost

Sav

ings

Difference in 5 Year Cost to Own from Ford Fusion

Fusion Hybrid; Ford Bolt e; Chevy C max se; Ford Focus e; Ford

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Emissions

The following recommendations are additional ways to reduce the City-County’s vehicle emissions.

1. Incease fuel efficiency by fine tuning vehicle transmissions. Systems like Derive40 optimally

calibrates each vehicle’s transmission specifically to its daily driving habits. By optimizing the

transmission parameters, there can be up to 12% annual reduction in fuel consumption. The City-

County could garner a savings of approximately $1,864,486 based on unleaded fuel price of $1.80

per gallon.

2. Reduction in fuel usage can possibly be found in a route analysis of daily drives e.g. BNS and DPW –

Solid Waste.

Power Offsets

Replacing the City-County pool car fleet with all electric vehicles increase electrical demand. To stay in line with the emission goals, the increased demand would need to be offset. Power offsetting means reducing the environmental impact of an entity’s electrical usage. Indiana Power and Light (IPL) has the green energy credit program for entities to offset their energy emissions. IPL’s has enrollment levels for its green energy credit program. Depending on the level, the rate would increase. The rate at 100% is a 1.7% increase in electricity costs, at 50% it is a 0.8% increase, and at 25% it is a 0.4% increase. The VAG would determine the appropriate level of enrollment based on the number of electric vehicles. A possible additional offset would be if the City-County converted it’s brown spaces41 to Solar Farms42. Infrastructure

To accommodate increase in electric vehicle volume the City-County would need to increase the

Electric Vehicle charging stations in pool car locations. On average charging stations cost $1,100-

$1,20043. This expansion can be paid in part with the cost savings found with the purchase of the Ford

Focus E.

CONCLUSION

The vehicle fleet is too old, has too many miles and is in disrepair. It has come to this critical point due to a lack of central planning and a disregard for best practice. The City-County vehicle fleet does not align with best practices with it’s aging fleet, decentralized management, inefficient procurement and disposal and its sustainability. Implementing these recommendations would move the City-County towards sustainable and lean fleet which reduces waste and decreases spending with a projected minimum savings of $5 million.

40 derivesystems.com Derive system cost ~$400 per vehicle

41 EPA (2017, November 17) Overview of Brownfields Programs. Retrieved from www.epa.gov

42 Solar Trade Explainer: Solar Farms Retrieved from solar-trade.org.uk

43 Fixr (2016, January 12) Home Electric Vehicle Charging Station fixr.com

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PROJECT TEAM

Lisa Crum, IT Data Analyst, Indianapolis Fleet Services

Jamaal Diaby, Purchasing Buyer, Office and Finance and Management

Walter Hughes, Senior Consultant, Office of Audit and Performance

Isaac Hughley, Consultant, Office of Audit and Performance

Barry Logan, Deputy Director, Office of Audit and Performance

Kendra McClain, Project Manager, Indianapolis Fleet Services

Jeff Meek, Project Manager, Office of Sustainability

Matt Mosier, Compliance Manager, Office of Sustainability

Jack O’Tain, Performance Manager, Office of Audit and Performance

Fady Qaddoura, Controller, Office of Finance and Management

Bill Rodgers, Administrator, Indianapolis Fleet Services

Wendy Thanisch, Procurement Manager, Office of Finance and Management

Hope Tribble, Director, Office of Audit and Performance

Michael Tucker (Author) Project Lead, Consultant, Office of Audit and Performance

Kevin Wethington, Commander, Indianapolis Metropolitan Police Department

Brett Wineinger, Deputy Controller, Office of Finance and Management

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REFERENCE LIST

Marlin, J. (2016, July 13) Centralizing a Decentralized Fleet. Retrieved from www.themunicipal.com)

Roselynne Reyes (2017) Catching up on Vehicle Replacement Retrieved from government-fleet.com

(2013, August 15) GAO Report Retried from government-fleet.com

Disciplines of Fleet Managers. Retrieved from fleetcertification.org

Chapman, M. (2017, March 14) 7 Habits of Highly Effective Fleet Managers Retrieved from fleetio.com

Washington State (2017) Fleet Management Best Practice. Retrieved from des.wa.gov

Utzinger, D. (1990 September) How to Manage a Government Fleet. Retrieved from automotive-fleet.com

(2017) Retrieved from government-fleet.com

Marlin, J. (2016, July 13) Centralizing a Decentralized Fleet. Retrieved from themunicipal.com

Wright, S. (2017, February 21) Buy or Leasing. Retrieved from themunicipal.com

Chatham Consulting (2015) Government Fleets. Retrieved from chathamconsulting.com

http://cms.indygov.org/proposals/2017/PROP17-021.PDF

Union of Concerned Scientists (2017) Why Fuel Efficiency Retrieved from ucsusa.org

EPA (2017, November 17) Overview of Brownfields Programs. Retrieved from www.epa.gov

Solar Trade Explainer: Solar Farms Retrieved from solar-trade.org.uk

Fixr (2016, January 12) Home Electric Vehicle Charging Station fixr.com

Sal Bibona (2017) How to Calculate Optimal Months in Service and Replacement Cycle Retrieved from www.fleetfinancials.com

Indiana Bond Bank (2017) HELP program Retrieved from inbondbank.com