VEHICLE REPLACEMENT PROGRAM FOR THE OLATHE FIRE DEPARTMENT

Transcription

1 VEHICLE REPLACEMENT PROGRAM FOR THE OLATHE FIRE DEPARTMENT EXECUTIVE LEADERSHIP BY: David M. Dock Olathe Fire Department Olathe, Kansas An applied research project submitted to the National Fire Academy as part of the Executive Fire Officer Program April 2002

2 2 ABSTRACT The Olathe Fire Department has an effective vehicle replacement program for all fire apparatus. However, the vehicle replacement program for staff vehicles has a consideration for replacement at five years, and actual replacement at 90,000 miles or 10 years. This has typically created a fleet of unreliable staff vehicles with high mileage, as well as excessive maintenance costs. The purpose of this research project is to identify guidelines for an economical but efficient means for staff vehicle replacement. It will provide management with the proper information required in making an informed decision regarding the department s staff vehicle replacement program. It is the hope of this researcher that this research will serve as our initial guideline in implementing a replacement program policy that is based on standards or guidelines that will benefit our community by providing a reliable and economical fleet of staff vehicles. In addition, this program will possibly provide other fire and EMS services the opportunity to purchase vehicles that are safe and well maintained at an affordable cost to their organization. The researcher utilized the descriptive research method to answer the following questions. 1. What is the rationale that should be used to determine when a vehicle should be replaced? 2. What are the financial implications for this program if implemented? 3. Would other local fire service agencies be interested in acquiring these vehicles at the end of our program? If so, what stipulations would they have to purchase the vehicle?

3 3 The procedure used to accomplish this research was to collect both current and past records to help determine the effectiveness of the program. In addition, the researcher reviewed current practices employed by the Olathe Fire Department as it related to the city s fleet management program. It also identified literary resources to help direct possible changes to the fleet management program The results of this research indicated: 1. The Olathe Fire Department s current vehicle replacement policy is to consider replacing a vehicle at 5 years of age, but actually replace the vehicles at 10 years or 90,000 miles. 2. The Olathe Fire Department does not have a designated person to monitor the above policy or fleet status and depends on a very back logged city service department to alert them to vehicle needs. Neither the fire department nor the service department has a data base to judge when a vehicle should be considered for replacement at the 5 year mark. 3. The fire department operates with several high mileage, high maintenance, high down time, unreliable vehicles. 4. The corporate world and the government world have very different views on when to replace fleet vehicles. The researcher compiled a list of recommendations that would most likely provide for a safer, more efficient, and economical fleet for the fire department. They included: 1. The fire department should designate a specific fleet manager to monitor and evaluate individual vehicle s condition and needs.

4 4 2. The fire department should develop a pilot program utilizing a replacement policy that considers replacement at 3 years by reviewing overall condition, mileage, out-of-warranty maintenance costs, and downtime. Actual replacement of good condition vehicles will be at 5 years or 70,000 miles. 3. The current practice of selling replaced vehicles should continue as long as the city is receiving fair market value. This researcher has recognized that if this plan is not implemented, there is a high probability that the fleet will have reliability problems and create unreasonable maintenance costs and vehicle downtime. Conversely, complete implementation would produce a significant department and community benefit by allowing the maintenance of a newer, safer, more efficient and reliable fleet of staff vehicles.

5 5 TABLE OF CONTENTS ABSTRACT.2 TABLE OF CONTENTS 5 INTRODUCTION....6 BACKGROUND AND SIGNIFICANCE.. 7 LITERATURE REVIEW 11 PROCEDURES RESULTS DISCUSSION.. 22 RECOMMENDATIONS REFERENCES...26 APPENDIX A SURVEY AND COVER LETTER... 27

6 6 INTRODUCTION The Olathe Fire Department has an effective vehicle replacement program for all fire apparatus. However, the vehicle replacement program for staff vehicles has a consideration for replacement at five years, and actual replacement at 90,000 miles or 10 years. This has typically created a fleet of unreliable staff vehicles with high mileage, as well as excessive maintenance costs. The purpose of this research project is to identify guidelines for an economical but efficient means for staff vehicle replacement. It will provide management with the proper information required in making an informed decision regarding the department s staff vehicle replacement program. It is the hope of this researcher that this research will serve as our initial guideline in implementing a replacement program policy that is based on standards or guidelines that will benefit our community by providing a reliable and economical fleet of staff vehicles. In addition, this program will possibly provide other fire and EMS services the opportunity to purchase vehicles that are safe and well maintained at an affordable cost to their organization. The researcher utilized the descriptive research method to answer the following questions. 1. What is the rationale that should be used to determine when a vehicle should be replaced? 2. What are the financial implications for this program if implemented? 3. Would other local fire service agencies be interested in acquiring these vehicles at the end of our program? If so, what stipulations would they have to purchase the vehicle?

7 7 In addition to the above research questions a survey was sent to area Kansas Fire and EMS agencies to help answer the other program questions. This researcher asked the following five questions. 1. How often do you replace your staff vehicles? 2. Prioritize what are the most important determining factors for purchasing used staff vehicles. 3. What type of staff vehicles would your organization be interested in purchasing? 4. Would your organization be interested in purchasing any of the above used staff vehicles? 5. What price range would your budget allow for the purchasing of a used staff vehicle? BACKGROUND AND SIGNIFICANCE The Olathe Fire Department is a full service emergency services organization, just south of the Kansas City metropolitan area. The department serves a 60 square mile area and approximately 102,000 citizens. The Olathe Fire Department is comprised of three organizational divisions which oversee various operations for the department. Within the Emergency Services Division, there are approximately 88 personnel and 6 stations. This division s fleet status consists of 7 front line apparatus comprised of 3 engines and 4 75 aerial ladders. The unstaffed fleet consists of one aerial platform and 5 engines (1986 being the oldest engine in the fleet). In addition, the organization has a 2001 Heavy Rescue and HazMat response unit, one front line 1999 Ford Expedition Battalion Chief s vehicle, and one unstaffed 1993 Chevrolet Suburban Battalion Chief s vehicle. This division is

8 8 comprised of the Assistant Chief of Emergency Services, who oversees all of the daily activities of the division. The Emergency Services Division consists of three battalions (A, B, and C shifts) which are comprised of a battalion chief, seven captains, seven fire apparatus operators, and 14 firefighters per shift. In association with the Emergency Services Division, the Olathe Fire Department has two other divisions: Life Safety and Prevention, and Administration and Support Services. These divisions handle the other vital functions of the fire service. The Life Safety and Prevention Division is made up of an Assistant Chief, four fire inspectors, and two public education specialists. This divisions fleet consists of a 1994 Crown Victoria for the fire marshal, three 1998 and one 2000 Ford Explorers for the fire inspectors as well as two 2000 Ford Windstar vans for the public education personnel. The division handles programs such as fire investigations, business inspections, plans review, explosives removal and detonations, and public education programs. The Administration and Support Services Division is comprised of the Deputy Fire Chief, the Chief of Training and Personnel Development, the Emergency Manager, and three administrative services personnel. The Administration and Support services fleet consists of three 1995 Ford Taurus, two 2000 Ford Explorer s for the Chief and Deputy Chief, one 2002 Ford Explorer for the Chief of Training, one 1994 Ford Bronco, one 2001 Ford Econoline van, and one 2000 Ford Windstar. This division oversees the entire department s administrative functions including budget management, departmental fire and EMS training, emergency management operations, planning, and coordinating the department s health and safety programs. Other administrative programs within this division include all support

9 9 services such as purchasing, information technology, and facilities maintenance. All three divisions are then directed and organized by the fire chief. After reviewing the current fleet status you can see that it appears the fleet is fairly new which is true but this is only within the past few years. The prior fleet was mainly comprised of old hand me down police vehicles and late model 1980 and early model 1990 sedans. It was only recently that our fleet has been upgraded to its current status. This is primarily because the economical conditions in our area had been very good. However, with the current economy and with budget cuts, the replacement of the fire department staff vehicles could fall behind again. The fire department s mission is to provide life and property protection from the risk of fire, hazardous materials incidents, emergency medical incidents, accidents and natural disasters. The mission of each division is accomplished through the achievement of the following goals (Olathe Fire Department, 1994): Continually improving the department s ability to be a full service emergency response organization. Maintaining an adequate level of personnel, facilities, and equipment to handle the expected number and types of emergency services. Providing the necessary amount of employee training to maintain the capability to provide a high level of emergency services. Managing the level of risk by emphasizing plan review, code enforcement, preemergency planning, fire investigation and public education. Preparing for major emergencies by emphasizing emergency preparedness planning, incident management, and coordination with county and state agencies and private industry resources. Performing evaluations and long-range planning to measure performance as well as forecasting changes that will affect the cost or level of services provided.

10 10 Utilization to maximum efficiency and effectiveness, all resources provided by the citizens of Olathe. The research conducted is a required component for the Executive Leadership program for the National Fire Academy s Executive Fire Officer Program. The topics covered in the Executive Leadership course directly related to this research project in several areas; however, the main topic that I utilized during this research project is in the area of networking. The definition of networking supplied in the student manual for Executive Leadership is the ability to create and maintain an effective, widely based system of resource that works to the mutual benefit of oneself and others (NFA, SM 10-7). This project helped me to expand my normal working relationship to those outside the fire department to include members of city staff, Kansas Fire and EMS leaders, as well as other community businesses to help identify various components of this program. Networking is a vital role each executive officer must realize early on in ones career or they will be doomed to fail. I realized this even more during our classroom discussions and watching the various presentations from other students and from the video programs. Leaders must rely on the experiences and expertise of others through the various networks of professions so each of us can make the most accurate and informed decisions. This module has helped me to identify my networking skills inventory, which indicated my skills for networking is fairly balanced on the three sides of the triangle. My strength is being in the working relations area of the triangle. This includes building and maintaining positive relationships and working to get the job done.

11 11 LITERATURE REVIEW An analysis of literature on the subject of fleet replacement plans was conducted through a search of journals and books at the National Fire Academy learning resource center as well as area public libraries. Additional research was conducted through resources available on the Internet and by conducting various interviews. In an effort to ensure that the Olathe Fire Department provides an economical and effective fleet of staff vehicles, the researcher felt it was necessary to re-evaluate our organization s vehicle replacement program s policies and implementation. After reviewing our department s mission statement and goals of performing evaluations and long-range planning to measure performance as well as forecasting changes that will affect the cost or level of services provided, the researcher felt it was necessary to proceed with this project. Currently, the City of Olathe has set up a funding plan to replace staff vehicles every five years (City of Olathe, 2001). The money to replace all existing fleet vehicles is available at 5 years; however, the policy is only for consideration at 5 years with replacement primarily occurring at 10 years or 90,000 miles. While researching this topic, it was discovered that several programs, in various government municipalities, identified a wide variety of programs. These programs ranged from replacing vehicles after they reach a certain mileage, on average 70,000, or age of the vehicle. Most of the programs that use age of vehicle, utilized 7-10 years as their replacement benchmark. For example, the state of Texas uses the following criteria to replace vehicle in their fleet: Sedan and wagons are replaced at six years or 90,000 miles.

12 12 Light trucks and Sport utility vehicles are replaced at six years or 100,000 miles (State of Texas, 2000). The city of Redondo Beach, CA utilizes 7 years or 70,000 miles for all SUV type vehicles (City of Redondo Beach, 2001). Our city s replacement policy appears appropriate considering the research. However, this researcher is not convinced that this policy is economical and efficient? With the variety of range that was discovered, it seemed to beg for more investigation. In the city of Coral Springs, Florida they developed similar criteria but went one step further. They developed a multi step check list and reviewed each vehicle annually so they could project vehicle replacement costs each year. The first step in this check list is to look at the vehicles physical appearance and the operating condition. Next, they review the driving conditions that the vehicle sustains on a daily basis and compare it to the department s needs. Finally and most importantly, they determine the total cost of ownership. This includes purchase price or replacement cost, maintenance costs life to date, current and depreciated value, or residual value at the time of replacement (Saunders & Morando, 1999). Another variable to consider is that as the fleet gets older replacement parts are harder to locate and are typically more expensive leading to longer down time (Peterson, 1994). During a review of the Olathe Fire Department s fleet, this researcher identified the life safety and prevention division s vehicles as the staff vehicles that were due for the next replacement cycle. The fire marshal s and the inspector s vehicles were specifically the oldest in the fleet. The fire marshal is driving a 1994 Ford Crown Victoria which is being replaced in June of The fire inspector s vehicles consist of

13 13 four 1998 Ford Explorers. The following chart shows the comparison of each vehicles fleet history from the city s fleet manager. The chart includes some of the variables that should be considered when determining the vehicles replacement, according to this researcher s findings during the literature review. YR/Make/Model Initial cost Current value As indicated by Edmunds (Fair Market) 1998 Ford $24, $12, Explorer w/48,903 miles 1998 Ford $24, $13, Explorer w/40,208 miles 1998 Ford $24, $12, Explorer 2000 Ford Explorer w/55,209 miles $22, $14, w/47,990 miles Depreciated Difference Total Life to date cost of the vehicle $11, $3, $11, $2, $12, $1, $ 8, $ Total down hours According to Automotive Fleet magazine 2000, the total cost to operate a SUV during 2000 cost approximately $ per month for the plains region. This includes fixed costs such as depreciation, insurance, and license fees. This price is the standing expense for vehicles whether or not the vehicle is used daily or not. This additional costs adds about $5,400 to the vehicles cost per year. This researcher interviewed Mike McGavran the regional manager of Enterprise Rental Car Company. He provided the following information which leads to the best practices followed by a national rental car company. There is no doubt that they rely on their fleet management program to provide them with the highest return on their investments. It was interesting to see the difference in government and corporate thinking.

14 14 1. Q. What factors do you use to determine when vehicles should be replaced i.e. years, mileage or a company formula? A. Enterprise uses mileage as there primary determining factor on when a vehicle should be resold. Typically, at around 20,000 to 30,000 miles, vehicles are auctioned or returned to the dealer depending on how the vehicle was purchased. The mileage determination is arrived at due to two factors, the vehicle warranty is still in affect, and the vehicle depreciation is such that the company can still make money off of the vehicle if it is still in good condition. 2. Q. How do you price your vehicles for resale? A. It depends on the way the vehicle was purchased or leased. Usually, our resale department will sell the vehicle on our own lots at a fair price according to blue book values. We try to avoid auctioning vehicles in good condition. Auctions typically bring a lower value and we may lose money. 3. Q. What are your best practices when it comes to purchasing and reselling vehicles in your fleet? A. Primarily, we base our resale off of the vehicles mileage. However, we also know that the vehicle costs us approximately 2% per month to operate and maintain. A $24,000 vehicle will cost us around $ per month. Again, this is another reason we try and release the vehicles around 20,000 to 30,000 miles, which is around one year for most of the Enterprise offices. An advantage that the City of Olathe and Enterprise share is that both organizations get fleet price breaks on all vehicle purchases. The City of Olathe purchases all of their vehicles with state or metro wide bids, depending on the vehicle being purchased and who has the best pricing. As Mr. McGavran stated in his

15 15 interview, by getting vehicles at a lower price, depending on the vehicle, you should be able to operate slightly longer and still be able to resale the vehicle at a profit or break even. A good program for procuring the appropriate vehicles, including training, maintenance, and replacing it before it becomes unreliable is vital to the protection of your community (Peterson, 1994). PROCEDURES This research utilized the descriptive research methodology to systematically examine the Olathe Fire Department s staff vehicle program in order to assist in the decision making process regarding the effectiveness of the program. The process was to collect current and past vehicle maintenance records and purchasing records which were used to help determine the status of our current program. In addition, the researcher reviewed current practices employed by the Olathe Fire Department as it related to this program. In order to assess our department s potential to resale our vehicles as part of this program, a survey was mailed to 60 Kansas Fire Chiefs and EMS administrators of departments ranging from 5,000 to 10,000 citizen in there communities. The population was used to help narrow the survey size. This was also determined a prospective group for purchasing used vehicles due to their limited budgets. They were asked five basic questions (appendix A) that helped to identify issues for possible participation in the program as well as what they felt were valuable factors when considering purchasing a used vehicle. The research also identified literary resources and various governmental publications. These helped identify possible changes to for our current program. For example, reviewing this information

16 16 increased the researcher s knowledge about what was occurring with fleet acquisitions throughout the public and private sectors across the country. This was reemphasized during the interview with Mike McGavran the regional manager of Enterprise Rental Car. This allowed a more informed decision concerning adjustments that may be needed in our program. The purpose of this project is to decide if the current staff vehicle program is sufficient, and if not, to determine the feasibility of the resale of our current vehicles earlier to maintain a newer and more economical fleet. The research used in this report began with a literature review of materials gathered from the Learning Resource Center at the National Emergency Training Center, the media resource center of the Olathe Fire Department, city fleet maintenance and purchasing records, as well as information gathered at local libraries and the Internet. The literature review primarily focused on the various fleet management programs implemented throughout the fire service and in the private sector. This review process was also limited to organizations that were comparable to our community and had policies in place regarding vehicle replacement programs. Additional information was gathered by this researcher by reviewing computer files and survey results. This information was helpful in identifying various trends within our fleet. Limitations The following limitations were identified by this research. The possibility of not receiving a significant and beneficial return on the survey questions that would enabled this researcher to answer some of the research questions. Another possible limitation for this researcher would be if the inability to locate sufficient maintenance records or

17 17 enough literary sources to effectively identify the answers to the research questions. The literature review produced very few comparable communities with replacement programs. One final limitation to the implementation of this program would be the city not accepting the results and therefore failing to implement the recommendations from this research. Research Methodology The research methodology that was used was a descriptive review of the Olathe Fire Department s records, survey results, and current practices along with a review of various literary sources and interviews. A content validity test was performed to validate the survey questions for their appropriateness to this research project. The validity test returned an 89% validation on the survey questions with five outside the department personnel. The initial procedure was the use of a survey instrument to determine the various factors that individuals would use to purchase a used vehicle. The survey was mailed to 60 Fire and EMS leaders across the state of Kansas with a cover letter of explanation and a stamped, self addressed return envelope (see Appendix A for a copy of the survey and cover letter). The survey questions were designed to provide information in an attempt to answer the research questions. Sixty percent, 36 out of 60, surveys were returned. This statically validated the results for this survey. A literature review was conducted to study the various bodies of information available regarding fleet management programs. Due to a lack of information on fire department fleet management of staff vehicles, most of the information was obtained from local government policies and private corporations. The literature review also included a review of fire service articles written for fire apparatus fleet management in

18 18 hopes that some of the information regarding fire apparatus could be utilized to justify changes in staff vehicle management programs. Additionally, the city s fleet manager was contacted to obtain vehicle maintenance records to identify initial cost factors and yearly maintenance costs for each of the vehicles surveyed. The vehicles selected for this analysis were the vehicles from the life safety and prevention division. They were selected for the following two reasons. They are out of the office and on the road conducting building and fire alarm system inspections throughout the city. It is felt that this group of vehicles would have a higher tendency to incur higher mileage. This group of vehicles was also purchased approximately 5 years ago and is due to be considered for replacement under the city s current program. The last procedure utilized as part of the research project was to conduct an interview with an area rental car company. This was done because fleet management is essential to their company s success. Rental car companies are in business to make as much money as possible from every vehicle in its fleet. This is a great philosophy to have when it comes to fleet management. Definition of Terms Vehicle life- how long the vehicle is retained before it is replaced. The vehicle life is determined by how the vehicle is used and for what purpose. Total Cost to Life of the Vehicle- calculated by totaling all the expenses to keep the vehicle operational. This doesn t include fuel, oil, depreciation, licensing or insurance costs. Depreciated difference- the calculated difference between the purchase price and the wholesale price including the current mileage of the vehicle and the vehicle qualifying for the good condition category in Edmunds pricing system.

19 19 Total Down Hours- the total number of hours the vehicle was out of service for repairs according to our fleet records management system. RESULTS Research Question # 1 1. What is the rationale that should be used to determine when a vehicle should be replaced? According to the research that was discovered as part of this project, the overwhelming consensus outside of the fire service and or government is to use mileage rather than years. This is due primarily to the fact that individual vehicles with lower mileage are still entitled to a manufacture s warranty. However, according to the local survey results gathered, 80% of the respondents indicated that they replace their staff type vehicles after ten or more years. According to Enterprise manager Mike McGavran, the most effective way to resale a used vehicle is to have low mileage with a manufacture s warranty or to have the ability to purchase an extended warranty. The vehicle also needs to be in good condition. As we approach the year to consider replacement of our inspector s vehicles, it is obvious this fleet incurs high mileage. This shows that the vehicles are obviously out of the manufacture s standard warranty and that the resale value has been affected due to the high mileage. Again the new owner is looking for value for there money which was proven as a result of the survey which was sent. The two most important reasons for considering the purchase of a used vehicle is the price with 70% of the 36 respondents agreeing and 100% of the 36 respondents stated that condition and warranty of the vehicle were equally important.

20 20 Due to the wide range of variables found in the research, this researcher was forced to try to adapt the best and most logical ideas from several different sources. A proposal that makes the most sense to this researcher is to consider replacement of a vehicle at 3 years. A record of each vehicles overall condition, mileage, out-of-warranty maintenance costs, and downtime should be considered at 3 years. If this vehicle has excessive mileage for age (>45,000), unusual out-of-warranty maintenance costs and/or downtime, or is in poor overall condition, this vehicle should be replaced. If at 3 years the vehicle is within normal mileage, has had only general maintenance needs, and is in overall good condition, the vehicle should remain within the fleet to 5 years or 70,000 miles, at which time it will be replaced. Research Question # 2 2. What are the financial implications for this program if implemented? The current process used for funding fire department fleet replacement within the City of Olathe is as follows. The city purchases a vehicle for the fire department. The fire department then makes a monthly payment of 1/60 th of the total vehicle price to a vehicle replacement fund. In five years, the money to replace that vehicle is waiting in that fund. All vehicles are fiscally replaceable at 5 years. In theory, the problem vehicles that should be replaced at 3 years will cost more and bring less in resale. Therefore, it should also be fiscally responsible to replace these vehicles at 3 years. This will provide a safer, more efficient and reliable fleet. The current city s purchasing manager stated that the city purchases vehicles at dealer cost due to our current purchasing agreement with the state and the metro area purchasing agents for local government. He also states that, at this time, the city is

21 21 making a fair market value at auction when reselling the replaced vehicles. Therefore, the city is not suffering the initial off-the-lot depreciation and is still getting fair market value at resale. He believes that if these conditions hold true, this proposed replacement policy change is feasible. The current funding structure works as long as it is followed as described by the purchasing manager and the profits are returned to the vehicle replacement fund as required in the city s administrative policy (2001). Another consideration for financial implications of this proposal involves the City Service Department. The City Service Department does all of the general maintenance and out-of-warranty maintenance on most city fleet vehicles. In reality, this department is very back logged and has a difficult time keeping up with the demands of fleet maintenance. The new proposal will create a fleet of vehicles that have a higher likelihood of being under a manufacture s warranty. This should reduce maintenance costs and workload on the City Service Department. Due to the decrease in workload, it should also improve efficiency of general maintenance throughout the city s fleet and decrease vehicle downtime. This should create a safer, well maintained fleet of vehicles. Research Question # 3 3. Would other local fire service agencies be interested in acquiring these vehicles at the end of our program? If so, what stipulations would they have to purchase the vehicle? According to the survey results 45.45% of the 36 respondents stated that they would be interested in purchasing used vehicles. Seventy percent of the respondents regarded some type of sport utility vehicle as the most desired. Sixty percent of the

22 22 respondents also stated that they would be interested in purchasing some type of 4X4 pick up. Again, the major stipulation to purchasing a vehicle was price with 37.5% of the respondents saying that they would purchase a used vehicle as long as the price was below $12,000. However, 25% of the respondents did advise they would spend up to $15,000 if the warranty and the condition of the vehicle was worthy of that price. It would appear that there may be some interest in area fire and EMS agencies willingness to purchase used vehicles from our agency. However, the survey shows that it would be unlikely that area agencies would be willing or capable of purchasing the vehicles at a market price. The vehicles that are kept for 5 years may have a desirable market price, but they would not have a manufacture s warranty and the mileage would be higher. A solution to this issue would be for the city to purchase an extended bumper-to-bumper warranty for each vehicle. This would increase the sales price, but it would help in the resale value of the vehicles making them more attractive to other local government agencies or fire and EMS departments in Kansas. DISCUSSION This research was conducted under the premise that the Olathe Fire Department needed to improve its vehicle replacement program. Nothing in the research indicated that such a program would be anything but a benefit if designed and implemented carefully and correctly. After researching the various components for this program change, it appeared that the most appropriate change would be to decrease our years of service for our vehicles based on corporate and some government industry standard. According to the City of Santa Monica California, since the inception of their vehicle replacement program, the fleet has been modernized, fuel efficiencies have improved,

23 23 and vehicle emissions have been reduced. They also reported the following changes by replacing city vehicles sooner. City employee morale and pride improved, productivity increased, and employee and public safety was enhanced (City of Santa Monica, 2001). The Enterprise representative stated that they saw an increase in there ability to resale there vehicle when they made a point to release them after 20,000 to 30,000 miles. Several important components enabled them to set this best practice for their industry. They were able to provide a used vehicle to a high demand market. Mr. McGavran stated that most of the used car buying market was looking for high quality vehicles with low mileage and a factory warranty still in place. He also identified with the quicker turn around, they were able to reduce there company s overhead by reducing the amount of capital outlay they had to incur on each vehicle. One of the main drawbacks to this proposed change in the city s vehicle replacement program is the unknown variables. If funding is reduced due to budget cuts or the city has to cease new vehicle purchases for a time due to financial reasons, the aggressiveness of this plan may not continue to be feasible. A pilot program will help provide actual cost/benefit analysis to prove whether this program is as economically feasible as the current program. There is no doubt; however, that this program would provide a more efficient and reliable fleet than the current program. After conducting the survey, it helped to reinforce the same components from the earlier research. It verified that the main items required by the fire service and EMS departments in Kansas were warranty, condition of the vehicle, and low prices. It also indicated that our local market is looking for SUV s and 4x4 pick-up type vehicles.

24 24 However, the survey indicated split decision on purchasing our used vehicles. The city s current program of reselling the vehicles at auctions is the most economical at this time. Reselling the vehicles to other governmental agencies may not be a current solution, since they are looking for cheaper vehicles. If we turn our vehicles over quicker they will be worth more money than the respondents to this survey are willing to pay. RECOMMENDATIONS Based on the previous research, the Olathe Fire Department may benefit by completing the following recommendations: 1. The Olathe Fire department should designate a fleet manager to maintain a data base on each staff vehicle s age, general condition, mileage, maintenance costs/needs, and downtime. 2. The Olathe Fire Department should conduct a pilot program that would follow the replacement guidelines that each vehicle will be considered for replacement at 3 years after reviewing the data base information. A decision will be made based on that information, if the vehicles will remain in the fleet or be replaced. All vehicles will be replaced at 5 years or 70,000 miles. 3. The current practice of selling vehicles at auction will continue, as long as the city receives fair market value. A pilot program will help provide actual cost/benefit analysis to prove whether this program is as economically feasible as the current program. There is no doubt; however, that this program will provide a more efficient and reliable fleet than the current program. The research shows that the value of a vehicle is based on much more than age. A program that looks at all of the variables that create the value of a

25 25 vehicle should be more efficient than the current program. Designating employees responsible for tracking these variables will guarantee a smoother running program. Maintaining a newer fleet will decrease the workload on the City Service Department improving its efficiency also. The community will be better protected by the employees of the Olathe Fire Department in reliable, economical, and safer staff vehicles.

26 26 REFERENCES Automotive Fleet. (2002) Fleet Operating Costs by Region. (pp. 50). City of Olathe. (2001). Administrative Regulation F-06. City of Redondo Beach. (2001). Fleet Service Guide. Edmunds. (May 2002). Edmunds' Used Cars & Trucks Prices Olathe Fire Department. (1994). Fire Department Mission Statement. Perkins, C. (2001). Memo to Mayor and City Council Agenda Item. Peterson, C. (1994). When should apparatus be replaced? Minnesota Fire Chief. (pp. 13 &28). Saunders D., & Morando, N. (1999). How to improve fleet replacement programs. Better Roads. Texas Department of Transportation. (2000). Vehicle Replacement Program for the State of Texas.

27 27 APPENDIX A SURVEY & COVER LETTER

28 28 Vehicle Replacement Survey 1. How often do you replace your staff vehicles? a) 1-3 years b) 4-6 years c) 7-9 years d) 10 years or older 2. Please prioritize (1-5) what is the most important determining factors for purchasing used staff vehicles. Price Mileage Warranty Condition Other factors (please specify) 3. What type of staff vehicles would your organization be interested in purchasing? (circle all that apply) a) Sedan b) Sedan with police package c) SUV 4X4 i.e. Explorer d) Pick up e) Pick up 4X4 f) Mini Van 4. Would your organization be interested in purchasing any of the above used staff vehicles? a) Yes b) No 5. What price range would your budget allow for the purchasing of a used staff vehicle? a) $ 7,000 to $ 9,000 b) $10,000 to $12,000 c) $13,000 to $15,000 d) $16,000 to $18,000

29 29 February 20, 2002 Kansas Fire Chief, Kansas Chief, I am currently working on the development and possible implementation of a vehicle replacement program for the Olathe Fire Department. This process is being documented as an Applied Research Project for the Executive Fire Officer s Program at the National Fire Academy. I would ask that you or a member of your staff take a few minutes to assist us. Please fill out the short and simple survey and return it by March 10, Your input will be extremely helpful. You can mail the survey back in the enclosed envelope or fax it to (913) Thank you in advance for your help. Training Chief David Dock