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HomeMy WebLinkAbout2024-05-07; City Council; ; City Fleet UpdateCA Review GH Meeting Date: May 7, 2024 To: Mayor and City Council From: Scott Chadwick, City Manager Staff Contact: Bradley Northup, Public Works Superintendent bradley.northup@carlsbadca.gov, 442-339-5193 Subject: City Fleet Update Districts: All Recommended Action Receive a report on the state of the city’s fleet, economic and operational impacts, and next steps for the Fleet Division in fiscal year 2024-25. Executive Summary The Fleet Division provides asset management, replacement planning, acquisition, maintenance, repairs and fueling services to the city’s 490 vehicles and equipment. This report provides the City Council with an overview of the city’s fleet, its ongoing operations and projects, challenges and the strategies and plans for fiscal year 2024-25. Explanation & Analysis The Fleet Division operates a single 10,000 square feet, eight-bay maintenance and repair facility located at 2480 Impala Drive, adjacent to the city’s Police and Fire Headquarters and Safety Training Center buildings. The city’s fleet currently includes 490 vehicles and equipment. The variety of vehicles and equipment operated to complete maintenance operations and execute missions are typical of a municipality that provides law enforcement, fire, street, water and wastewater services but does not provide solid waste or street sweeping services with city staff. Since 2018, the city’s fleet of vehicles and equipment has grown from a previous total of 400 to its current total of 490 vehicles and equipment. This 22.5% increase in vehicles and equipment in the last six years can be attributed to various authorized expansions of city services or new programs where additional vehicles or equipment are added as new purchases or where aged assets are retained from auction sale. The city’s Fleet Division utilizes a number of best management practices to manage the city’s fleet. These essential mechanisms have been established in Administrative Order No.3 – Fleet Management Policy. May 7, 2024 Item #8 Page 1 of 52 The Fleet Division, similar to other government fleets, has been challenged by inflationary and supply chain issues that have resulted in increased costs and extended lead times to receive new vehicles. Additionally, the cost of fuel continues to increase each year. State regulatory changes have also created challenges in the city’s ability to procure vehicles.. The city recently hired an outside consulting firm, Matrix Consulting Group, to evaluate its fleet operations and provide recommendations for potential cost-saving options. The report, attached as Exhibit 1 shows the city has: • A fleet size comparative to a passenger vehicle fleet of more than 1,000 vehicles • Vehicles with an average age of 6.8 years o This is within recommended industry parameters for age and respects the optimal lifecycles for vehicle replacement, which minimizes the total cost of ownership • Strong policies in place to manage and implement fleet best practices • Customer satisfaction scores greater than the industry standard of 80% o The customers, the city’s staff and departments, reported that they are satisfied with Fleet Services • Moved steadily toward electrification o The city has plans in place to continue achieving more greenhouse gas emissions reductions by electrifying the fleet • Outgrown the current fleet maintenance facility and staff’s ability to fully support repair work, necessitating possible increased outsourcing • Implemented operational efficiencies and has adequate funding to support sustained fleet operations The report also examined potential cost-saving opportunities for the city’s fleet, including leasing. While some cities have chosen to lease rather than purchase their fleet vehicles, the report concluded that leasing vehicles will not provide significant cost savings compared to the city’s current fleet operations. Fiscal Analysis No city funding is requested as part of this informational report. Next Steps Fleet staff will continue to work with city departments to proactively identify, verify and validate vehicle utilization, vehicle assignments and methods of operation to ensure city vehicles are optimized to reduce costs and managed in a way that supports the city’s sustainability goals. Environmental Evaluation This action does not require environmental review because it does not constitute a project within the meaning of the California Environmental Quality Act under California Public Resources Code Section 21065 in that it has no potential to cause either a direct physical change or a reasonably foreseeable indirect physical change in the environment. Exhibit 1. Draft Options Analysis – Fleet Financing (Matrix Consulting Group) May 7, 2024 Item #8 Page 2 of 52 Options Analysis - Fleet Financing CARLSBAD, CALIFORNIA April 28, 2024 Exhibit 1 May 7, 2024 Item #8 Page 3 of 52 Table of Contents 1 Executive Summary 1 2 Introduction and Fleet Overview 4 3 Staffing Analysis 13 4 Customer Service Survey 16 5 Options 19 6 Cost Benefit Analysis 23 7 Recommendations 29 Appendix A – Job Descriptions 30 Appendix B – Customer Service 34 Appendix C – VEU Calculator 35 May 7, 2024 Item #8 Page 4 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 1 1. Executive Summary The City of Carlsbad has a fleet of 431 vehicles with a replacement value of $37.7 million. The fleet budget for 2022-23 was approximately $8.8 million, of which $5.3 was for capital outlay. The City wishes to explore whether cost savings are possible by changing the financing method or operations of the Fleet Services Division. Matrix Consulting Group was engaged for this purpose. Fleet size and composition changes almost daily. The analysis is based on data provided by the City in August 2023. We first prepared a Fleet Profile, showing the current state of the fleet. The fleet has an average age of 6.8 years which is within industry standards. The City operates a maintenance and repair shop staffed as outlined in section 2.4 of this report. Our analysis concluded that in order to maintain the desired service levels at the lowest cost, two additional mechanics are needed for a fleet of this size. Although plans are in place for shop modifications, the current plan may not completely address the workspace deficiencies discussed. If the shop cannot expand to accommodate workload, increased outsourced repairs are the only option. As service levels are important to the City, we conducted a customer satisfaction survey. The results were higher than the industry threshold of 80% satisfaction, with customers expressing a high level of satisfaction with the strengths in knowledge and experience of the fleet team. The weakness commonly noted was staff availability which impacted repair times. A summary of the survey can be found in section 4 of this report. A neighboring City with a smaller fleet has adopted the Enterprise leasing model with a fixed price maintenance plan. The person responsible for implementing the program was interviewed and indicated that the City has not done a cost analysis of this option but is very satisfied with vehicle availability. Carlsbad is interested in exploring the costs and benefits of this, and other, leasing models. After gathering the information for the current state profile and assessment, we identified and analyzed the options available against the City’s selected decision criteria. These options were: • Maintain status quo. • Delay replacement. • Expand shop capacity. • Adopt the Enterprise lease model with maintenance. • Adopt a traditional lease model with or without maintenance. May 7, 2024 Item #8 Page 5 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 2 Each option was evaluated using the weighted decision criteria shown in the table below. Criterion Weight Service Levels 3 Costs 2 Electrification 2 Vehicle Availability 1 Business Continuity 1 Data 1 A full discussion of each option appears in the main body of this report. Our summary of each option found: Status Quo Delay Replacement Expand Shop Enterprise Lease Model Traditional Lease Model Service Levels 82% but decreasing due to long repair times. Longer lifecycles will result in increased downtime and lower customer satisfaction. Service levels will increase once expansion is complete. Service levels should increase if long delays associated with in-house repair are avoided. Service levels should increase if long delays associated with in-house repair are avoided. Costs $5.3 capital $3.5 operating including inhouse main of $700K and outsourcing of $890K. Extending lifecycles results in higher Total Cost of Ownership (TCO). More than $2.2 M for expansion. $220K for 2 mechanics. Save over $500K of outsourced repair. Costs exceed fleet purchase costs. Costs exceed fleet purchase costs. Electrification The City is on track to meet goals in the Strategic Plan and Climate Action Plan. The City may not meet electrification targets. This option would not impact the City’s ability to meet electrification targets. Leasing may enhance access to EVs. Leasing may enhance access to EVs. Vehicle Availability Over 90% due to skill of staff. Older vehicles are less reliable so availability will decrease. Availability will increase. Vehicle availability will likely increase. Vehicle availability will likely increase. Business Continuity No disruption No disruption. Largest disruption during shop expansion. Medium disruption while internal processes are adjusted. Medium disruption while internal processes are adjusted. May 7, 2024 Item #8 Page 6 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 3 Status Quo Delay Replacement Expand Shop Enterprise Lease Model Traditional Lease Model Data Asset Works is the system of record. Asset Works is the system of record. Asset Works is the system of record. Will need to integrate Leaser system. Will need to integrate Leaser system. We therefore recommend that the City increase shop capacity and staffing as the best option to maintain and increase service levels while ensuring efficiencies in fleet acquisition and maintenance. Although there are advantages to leasing, it does not address the main priorities of the City which are service levels and costs. May 7, 2024 Item #8 Page 7 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 4 2. Introduction and Fleet Overview 2.1 Introduction This descriptive fleet profile of the City of Carlsbad’s fleet summarizes the organizational structure, and primary operations of the fleet. It includes an overview of the current fleet makeup, the operating and capital budgets, a summary of staffing, an overview of the policy framework and an inventory of the primary technological tools utilized to manage the fleet. The descriptive profile does not attempt to include every organizational and operational facet related to the fleet. Instead, it provides an overview of the current state that will be useful as recommendations are developed during the study. This profile will be used as a starting point to show how specific recommendations will impact the organization’s approach – whether in organizational structure, operational practices, or in the makeup and management of the fleet. 2.2 Fleet Overview The fleet organization, known as the Fleet Services Division, manages 431 assets with a total estimated replacement value of $37.7 million. The following table shows the number of assets assigned to each Department as well as the total estimated value of those assets. Department Count Estimated Value Administrative 1 $33,000 Community Services 71 $2,900,000 Fire 53 $17,011,348 Police 152 $9,241,500 Public Works 154 $8,489,029 Total 431 $37,674,877 The vehicle and equipment assets are a variety of types needed to support the operations of a city. The next table show assets by classification and accumulated mileage/hours of use. May 7, 2024 Item #8 Page 8 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 5 Classification Count Avg. Age Cart/ATV 5 8.0 Equipment HD 17 10.2 Equipment MD 8 12.8 Fire Apparatus 13 12.3 Fire Aerial 2 9.5 Fire Ambulance 9 4.9 Generator/Pump/Motor 7 4.6 Motorcycle 14 4.3 Patrol Pickup 3 4.0 Patrol SUV 55 3.3 PD Armored Vehicle 1 11.0 PD Command Center 2 5.0 Sedan 31 7.8 Sign / Barrier 12 5.7 SUV 84 6.6 Sweeper 2 11.5 Trailer 18 9.2 Truck HD 9 7.0 Truck LD 92 6.7 Truck MD 30 6.7 Van 14 9.6 Watercraft 3 3.3 Total 431 6.8 The fleet is also categorized by model year and displayed in graphical form. This graph demonstrates the number of assets in the active fleet by year of acquisition. The peaks and valleys in the graph reflect fluctuations in acquisitions (as shown in the 2018 decline, for example) and also illustrates the effect of the City’s disposal practices (as shown by the few active vehicles acquired before 2014). These acquisition and disposal timelines are linked to the City’s replacement strategy. May 7, 2024 Item #8 Page 9 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 6 Fleet by Model Year The average age of vehicles as well as their utilization levels and annual maintenance costs are important factors in replacement decisions. The following table provides the current average hour and mileage readings by equipment classification. Classification Hours Miles Cart/ATV 411 1,919 Equipment HD 819 496 Equipment MD 517 613 Fire Apparatus 73,620 Fire Aerial 73,595 Fire Ambulance 96,865 Generator/Pump/Motor 215 Motorcycle 26,619 Patrol Pickup 37,064 Patrol SUV 59,556 PD Armored Vehicle 11,239 PD Command Center 15 4,433 Sedan 60,501 SUV 48,388 Sweeper 89 Trailer 132 5 Truck HD 26,925 Truck LD 44,757 Truck MD 33,877 Van 47,591 Watercraft 300 0 10 20 30 40 50 60 70 80 May 7, 2024 Item #8 Page 10 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 7 2.3 Budget The City of Carlsbad fiscal year (FY) runs from July 1st to June 30th. Vehicle and equipment replacement are funded through monies collected from Departments. The following table shows actual expenditures for FY 2019-2020 and 2020-2021 and FY2021- 2022 as well as the FY2022-2023 budget. Budget Item 2019-2020 Actuals 2020-2021 Actuals 2021-2022 Actuals 2022-2023 Budget Personnel Services: Salaries and Wages $666,389 $788,752 $772,136 $845,915 Retirement Benefits $146,326 $266,093 $233,283 $200,165 Health Benefits $106,408 $153,023 $165,871 $188,345 Other Personnel Benefits $65,738 ($31,517) ($160,425) $36,383 Sub-total $984,861 $1,176,351 $1.010,865 $1,270,808 Operating Expenses: Professional and Contract $54,364 $52,591 $30,430 $39,343 Supplies and Materials $1,378,856 $1,497,606 $1,725,898 $1,538,793 Repair and Maintenance $381,804 $341,016 $432,499 $410,094 Interdepartmental Charges $124,639 $161,686 $201,372 $228,549 Other Operating Expenses $30,124 $30,347 $235,405 $18,553 Capital Outlay $3,594,743 $1,709,482 $3,641,548 $5,293,745 Sub-total $5,564,530 $3,792,728 $6,267,152 $7,529,077 Total $6,549,391 $4,969,079 $7,278,017 $8,799,885 The annual budget summary provided the following pertinent information: • The fleet maintenance program is funded through charges based on vehicle type and utilization. • The fleet vehicle replacement program is funded through a replacement charge for each vehicle or equipment in service, determined by actual costs of vehicle procurement divided by the expected life of the vehicle. Adjustments to fund contributions are reviewed annually and adjusted for inflation. • The replacement fund covers asset replacement and vehicle outfitting. • Cost-effective vehicle procurement is achieved through cooperative purchasing agreements and bidding processes. • Revenue is collected from the sale of retired city fleet assets at auction and returned to the fleet replacement fund May 7, 2024 Item #8 Page 11 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 8 Although capital replacement is included in this view of the overall fleet budget, the capital fund is distinct from the operating and maintenance fund. 2.4 Organization The organizational chart of the City’s fleet section appears below. The Fleet Services Division is led by the Fleet Public Works Superintendent who reports to the Public Works Manager. Deputy City Manager - Public Works Public Works Manager Fleet Public Works Superintendent Public Works Supervisor Lead Equipment Technician Equipment Technician II (2) Equipment Technician I (2) Warehouse Technician Maintenance Assistant (PT) Accounting Tech Office Assistant (PT) Management Analyst May 7, 2024 Item #8 Page 12 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 9 2.5 Job Descriptions In general, job descriptions were thorough and described typical duties associated with the positions. The Management Analyst is a generic description and does not have specific fleet responsibilities. The Maintenance Assistant description is not a full job description, only bullets provided in a summary document that includes all hourly positions. Part time positions are allocated to all City Departments and do not have a specific fleet role definition. A complete listing of positions with a summary of key responsibilities appears as Appendix A. 2.6 Policies The City has a strong policy foundation with a Strategic Plan, Climate Action Plan, Fleet Policy Manual and Driver’s Handbook (in draft). A summary of the content found in each document is included in the table below. Policy Description Strategic Plan • The City of Carlsbad’s Strategic Plan (2023 – 2027) contains Goal 3: Sustainability and the Natural Environment. • Two Key Performance Indicators (KPIs) directly related to fleet are Greenhouse Gas (GHG) emissions and the percentage of the city fleet powered by hybrid or electric vehicle technology. • Objectives include: – Increase citywide electric vehicle charging infrastructure and transition all passenger fleet vehicle purchases after FY 2022- 23 to be electric vehicles, with the exception of public safety vehicle purchases, which will be electric where feasible. – Develop partnerships with nonprofit, academic and other non- governmental organizations to leverage environmental sustainability efforts and programs. Climate Action Plan • The original plan was drafted in 2015 and it was updated in 2020. An additional update is underway. • Covers the reasons for emissions reduction as well as the legislative environment. • The City tracks key data such as fuel consumed and Vehicle Miles Travelled (VMT) to calculate carbon dioxide (CO2) emissions and nitrogen dioxide (NO2) and methane (CH4) emissions. • The City must comply with the State of California’s Executive Orders to reduce its GHG emissions to 1990 levels by 2020, to 40 percent below 1990 by 2030, and to 80 percent below 1990 levels by 2050. May 7, 2024 Item #8 Page 13 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 10 Policy Description Administrative Order 03 • The Order was updated in 2021 and covers a full range of fleet and related topics including: – Defining official use of City vehicles. – Outlining responsibilities of the Fleet Services Division and Department liaisons. – Acquiring, funding and replacing vehicles. – Complying with the Climate Action Plan. – Utilizing vehicles efficiently. – Maintaining fleet vehicles. – Preventing and managing accidents. – Providing fuel for fleet vehicles. Operator’s Handbook • Fleet Services Division is currently working on this document. The Fleet Services Division does not use Service Level Agreements (SLAs) with any customers. They are considering, however, the benefits of establishing SLAs with police and fire. 2.7 Technology The following table provides a summary of the technology utilized in fleet operations. Each tool or application is accompanied by a description of its functionality and the primary ways it is used. Telematics, which includes mobile tracking and communication of vehicle operating status, fuel levels, location, and acceleration/deceleration with a fleet management system are not used. Technology Description AssetWorks FA • Fleet management information system used to create work orders, PM scheduling, labor tracking, and parts and inventory tracking. • Contains parts inventory function for tracking the purchase and use of parts to work orders. • Accounting Technician and IT representative attended Asset Work Academy for training. Fuel Focus • Fuel Focus is used to monitor all fuel dispensing activities at the City’s fuel location. • Each vehicle is assigned a fuel fob that is swiped at the kiosk to authorize the dispersing of fuel. The fuel yard kiosk requires the driver to input an employee pin number, mileage, and fuel type before dispensing is authorized. May 7, 2024 Item #8 Page 14 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 11 Technology Description Voyager Fuel Cards • There is a fuel credit card, Voyager Fleet Fuel, used by departments when fuel yard locations are not easily accessible. Telematics • The City is conducting a pilot for telematics. 2.8 Sustainability In terms of pursuing advanced fuel technologies, the City has purchased the following on-road electric vehicles: • 5 EVs • 22 PHEV • 63 Hybrids These purchases include a variety of models such as Bolt, Leaf, Transit, Lightning, Prius, Escape, Rav 4, Niro and Explorer. In addition to the assets listed, the City plans to acquire five to ten EVs each year until 2027. For supporting infrastructure, the City has, or is building, the significant capabilities shown below. May 7, 2024 Item #8 Page 15 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 12 Station Location Service Type Number of Ports Charge Level Oak Ave PW Yard Fleet Only 2 Level 1 Carlsbad Municipal Water District Fleet Only 1 Level 1 Dove Library Fleet/Staff 10 Level 2 Faraday Fleet/Staff 10 Level 2 Fleet Yard Fleet Only 4 Level 2 Fleet Yard Fleet Only 2 Level 3 Safety Center Fleet/Staff 5 Level 2 Orion Center Fleet/Staff 22 Level 2 Fleet Yard Fleet Only 26 Level 3 Active In Construction / Planned May 7, 2024 Item #8 Page 16 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 13 3. Staffing Analysis The number of technicians and related positions required for a maintenance operation to operate effectively is primarily driven by the size and composition of the fleet it serves. A process known as Vehicle Equivalent Unit (VEU) calculation is used to equate the level of effort required to maintain dissimilar types of vehicles to a passenger car, which is given a baseline VEU of 1.0. Work with other fleet organizations has shown that a VEU of 1.0 is equal to between 10 and 15 annual maintenance labor hours, depending upon a number of factors unique to each organization. All other types of vehicles are allocated a VEU value based on their relationship to a passenger car. For example, a Patrol SUV is assigned a VEU of 3.0. This means that a vehicle of this type on average requires about 3 times the annual maintenance hours of a passenger car or between 30 and 45 hours per year. For this project, a VEU was assigned for each classification of vehicles or equipment. The 431 vehicles and equipment pieces in the fleet total 1,061.25 VEUs. Therefore, the Department’s fleet maintenance responsibilities are equivalent to those of maintaining a fleet of almost 1,061 passenger cars. The following table summarizes the VEU calculations: Classification Count VEU/asset Total VEU Cart/ATV 5 0.5 2.5 Equipment MD 8 3 24 Equipment HD 17 5 85 Fire Aerial 2 8 16 Fire Apparatus 13 7 91 Fire Ambulance 9 6 54 Generator/Pump/Motor 7 0.25 1.75 Motorcycle 14 1 14 Patrol Pickup 3 3 9 Patrol SUV 55 3 165 PD - Armoured Vehicles 1 5 5 PD - Control Center 2 5 10 Sedan 31 1 31 Sign / Barrier 12 0.25 3 SUV 84 2 168 Sweeper 2 10 20 Trailer 18 0.5 9 Truck LD 92 2 184 May 7, 2024 Item #8 Page 17 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 14 Classification Count VEU/asset Total VEU Truck MD 30 3 90 Truck HD 9 5 45 Van 14 2 28 Watercraft 3 2 6 Total 431 1,061.25 The next step in our analysis was to determine the number of labor hours required to maintain one VEU. The baseline is 10 hours per year, but adverse or challenging conditions can increase this, while unusually good conditions can drive labor demand down. In determining the number of hours per VEU for an organization, a number of factors that are unique to each fleet are considered. These factors include fleet age and condition, usage levels, degree of outsourcing, and overall operating environment. For Carlsbad, the labor factor required to properly maintain the fleet is calculated at 10.5 hours per VEU. Our calculation is shown in the following table: Hours per VEU 10 Baseline Hours per VEU 0 Adjustment for fleet age 0 Adjustment for utilization levels 0 Adjustment for operating environment 0 Adjustment for facility and tools 0 Adjustment for parts support 0.5 Adjustment for systems integration 10.5 Total Hours per VEU With 10.5 labor hours per VEU expected, the annual maintenance and repair workload is calculated to be 11,143 hours (1,61.25 VEUs x 10.5 hours/VEU). While a fleet mechanic’s salary is based on 2,080 hours per year (52 weeks x 40 hours per week), only 70% or 1,456 labor hours per year are available to perform actual maintenance work. The remaining payroll hours are lost to vacation, sick time, holidays and indirect time such as training and meetings. When the 11,143 mechanic hours required to maintain the fleet are divided by the 1,456 annual labor hours available per mechanic, the result is a need for 7.7 mechanic Full-Time Equivalent (FTE) positions. Not all of this workload will be necessarily handled in-house. Depending on the fleet composition, the availability of warranties and favorable vendor contracts, and the strategy and approach of the City, a portion of these hours may be outsourced. Best May 7, 2024 Item #8 Page 18 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 15 practice is to outsource 10-15% of maintenance, with a focus on warranty work, time- consuming repairs, or work that requires special training or tools to deal with a high degree of complexity. Outsourcing 15% of work would result in a reduction in the FTE positions required from 7.7 to 6.5. Carlsbad currently employs a lead technician and four technicians for a total of 4.5 FTE. This leaves a shortage of two technicians when outsourcing 15% of the workload. The VEU Calculator has been provided as Appendix C. May 7, 2024 Item #8 Page 19 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 16 4. Customer Service Survey An annual customer survey is an efficient way to gather information that can improve fleet service levels. A simple five-point scale can be used to gauge satisfaction with key fleet functions. The results can be used to measure progress over time. The City does not have a formal process in place to measure customer satisfaction. We conducted interviews with the five main user Departments who were asked to rate the Fleet Services Division in eleven areas of customer service. The categories were defined as shown below. Customer Satisfaction Categories Communication. Fleet communicates about the status of items in the shop and gives timely updates of work completion. Customer Service. Vehicle drop-off and pick-up is convenient, organized and handled in a professional manner. Preventive Maintenance (PM). Fleet has a PM plan and ensures PMs are up to date on all vehicles. Vehicle Availability. Vehicles are available to meet operational requirements. The target is 95% availability. Timeliness of repairs. Vehicles are repaired in a timely fashion (major repairs 7 days, minor within 48 hours) Quality of repairs. Comebacks for the same issue should be very rare. Parts. When vehicles go for PM, the regular parts are on hand. Adequate and correct parts kept in inventory. A system is in place to get parts as needed. Technicians. Shop has adequate, trained technicians for the volume of work. Acquisition Process. Customers are consulted throughout the process and the outcome meets their operational needs. Facility. The location of the shop and operating hours meet customer needs. Fuel. The location of fuel is convenient and good control measures are in place. Each Department was independently interviewed and asked to rate their satisfaction with Fleet Services on a scale of 1 to 5 with five being the highest rating. The results of this survey appear in the next table. Criteria/Customer A B C D E Av g . Communication 2.00 4.00 5.00 4.50 4.00 3.90 Customer Service 3.00 4.25 5.00 5.00 5.00 4.45 Preventive Maintenance 3.75 3.00 5.00 5.00 4.00 4.15 May 7, 2024 Item #8 Page 20 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 17 Vehicle Availability DNR DNR 5.00 5.00 5.00 5.00 Timeliness of repairs 2.00 3.00 5.00 4.50 4.00 3.70 Quality of repairs 4.25 4.50 5.00 5.00 4.00 4.55 Parts 4.00 3.50 5.00 DNR 5.00 4.38 Technicians (sufficiency) 4.00 4.00 5.00 4.50 2.00 3.90 Acquisition Process 5.00 4.20 5.00 4.00 4.00 4.44 Facility 5.00 3.70 5.00 3.50 3.00 4.04 Fuel 5.00 2.00 5.00 5.00 5.00 4.40 Overall Average 3.80 3.62 5.00 4.60 4.09 4.23 In addition to these ratings, fleet customers were asked to state what they felt the Fleet Service Department’s main strengths were. Their comments included: • “The Fleet Manager has great interpersonal skills and has built trust between Fleet and their customers.” • “Technicians are helpful, responsive and creative.” • “Fleet Services focuses on meeting operational needs.” • “Fleet Services is increasingly a data-driven organization.” In terms of areas for improvement, customers suggested the following: • “Increase the number of technicians and shop personnel to reduce repair time.” • “Communicate on the status of vehicles while in the shop, not just when repairs are complete.” • “Create a reception area with customer service staff so drivers dropping off vehicles do not continually disturb technicians.” • “Have loaner vehicles available to use while repairs are being done.” The detailed comments by Department (Appendix 2) were provided to the City and steps are already underway to address the areas for improvement. May 7, 2024 Item #8 Page 21 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 18 5. Options 5.1 Option Descriptions After review of the fleet and interviews with stakeholders several key findings were evident: • The fleet is currently within recommended industry parameters for age and respects optimal lifecycles for vehicle replacement which are set to minimize Total Cost of Ownership (TCO). • The fleet has outgrown the current maintenance facility and the staff’s ability to fully support repair work, necessitating increased outsourcing. • The organization has moved towards electrification and intends to continue to pursue Greenhouse Gas (GHG) emissions reductions by electrifying the fleet. • Customers are satisfied with Fleet Services and believe under-staffing is the cause of repair delays. • A neighbouring City (San Marcos) is leasing their vehicles using the Enterprise full- maintenance package option. San Marcos has a fleet of approximately 300 vehicles, of which 100 come under Enterprise for financing, maintenance, and disposal. The staffing report, dated February 24, 2015, that led to their decision to lease was reviewed as part of this study. The report noted that deferring fleet replacement had contributed to a situation where 43% of light- duty vehicles were past their useful life and needed to be replaced immediately “to mitigate the escalating repair and maintenance costs.” Of the 100 vehicles leased, most vehicles are light-duty but there are approximately 30 that are specialized. All assets in the leasing program have a five-year lifecycle except for one water truck. The arrangement has been in place since 2015 and has no expiration date. The advantages of the current program include that the full maintenance program provided relieves workload on City mechanics, the turnkey solution requires little effort from City staff who are regularly turning over, the maintenance program is convenient to drivers who have access to an extensive network, and Enterprise’s buying power has ensured that no orders for vehicles have been cancelled. May 7, 2024 Item #8 Page 22 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 19 On the other hand, the City does not have a single repository of fleet data and has not compared costs between an Enterprise maintenance lease and inhouse repair. For San Marcos, costs are not the driving factor. They see value in not having to actively manage the 100 vehicles that are leased, and current staffing prevents resuming this workload. These observations led to consideration of several options. These options were identified by the consulting team and/or suggested for exploration by the City. • Maintain Status Quo. Is the current method of owning vehicles and maintaining them through a mix of inhouse and outsourced maintenance the best option? • Increase maintenance facility size and staff. Can the shop capacity be increased whether vehicles are purchased or leased? • Delay fleet replacement. Will extending the lifecycles of fleet vehicles result in a lower TCO? • Lease a portion of the fleet. Can a leasing program, with or without maintenance included, save money? In exploring these options, the City expressed a desire to ensure fleet condition and age remain consistent, the increasing maintenance workload is met, electrification goals continue to evolve and service levels remain constant or improve. Before exploring each option, the decision criteria that will be used in making final recommendations will be described. 5.2 Decision Criteria In order to make a recommendation that aligns with the strategic goals of the City, interviews were held with stakeholders to fully understand priorities. City personnel assessed the key factors as service levels, costs, vehicle availability, electrification, business continuity and provision of data for performance measurement. Each criterion is explained in detail: Service Levels. The recommended solution must ensure that service levels remain at the current standard or improve. This will be measured through the customer satisfaction survey and several industry Key Performance Indicators (KPIs). • Customer Satisfaction. This KPI measures the level of satisfaction that fleet customers have with the services provided by fleet. A satisfaction level of 80% or higher on the Customer Satisfaction Survey is desired. • Availability. This KPI measures the percentage of assets available for operational support on a given day. The industry standard is 95%. May 7, 2024 Item #8 Page 23 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 20 • Preventive Maintenance (PM) Compliance. This KPI measures the percentage of PMs that are completed by their due date. The industry standard is 95%. • Repair Times. This KPI measures the amount of time a vehicle spends in the shop for major and minor repairs. The industry standard is less than seven days for a major repair and 48 hours for a minor one. Costs. The recommended option must ensure that the TCO is acceptable and affordable for the City. Factors that must be considered include: • The role of interest rates. • The spiralling capital costs of vehicles. • Short- and long-term costs of leasing. The costs of operating in the current model are known. We obtained pricing from two leasing companies as points of comparison. Electrification targets. The City’s Strategic Plan calls for all passenger vehicles purchased after 2022-23 to be electric and the Climate Action Plan describes GHG emissions targets that Fleet Services needs to meet. Vehicle availability. Supply chain issues continue to impact the availability of certain vehicles and the order times needed to acquire them. In some cases, this leads to selecting vehicles according to what is available now, rather than what is best for the job. Business continuity. Change (even temporary) can be a challenge and has a cost. This could include allowing time for systems integration or temporary relocation to a different facility. Provision of meaningful data. Fleet Management is a data-driven business, and any recommendation must ensure the necessary data will be available to make operating and replacement decisions. A single system of record needs to be in place for effective decision making to happen. May 7, 2024 Item #8 Page 24 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 21 5.3 Decision Matrix The City was asked to weight the six decision criteria and selected the following values: Criterion Weight Service Levels 3 Costs 2 Electrification 2 Vehicle Availability 1 Business Continuity 1 Data 1 The costs and benefits of each option considered these criteria, and the final recommendation is based in the relative importance of each. May 7, 2024 Item #8 Page 25 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 22 6. Cost Benefit Analysis Each of the options are presented with a discussion of the decision criteria and how they relate to that option. 6.1 Retain Status Quo Status quo means that the fleet budget, facility, staffing and fleet size would remain the same, allowing for increases due to inflation. The immediate problem with this option is that it fails to meet one of the goals of the study which is to find savings in the provision of fleet support while not compromising service levels. A discussion of the decision criteria follows. Service Levels. Currently, the Fleet Services Department is meeting the benchmark of 80% in customer satisfaction as demonstrated in the survey conducted. Vehicle availability is high. Preventive maintenance compliance is falling behind, and repair times are often extended. This is not due to customer delinquency, rather to the facility size and shop manning. Therefore, the Status Quo option is seeing a decrease in service levels which is expected to continue over time. Criterion Benchmark Meets Standard Customer Survey 80% Yes Vehicle Availability 95% Yes PM Compliance 95% No Repair Times Minor - 2 days Yes Major - 7 days No Cost. The costs associated with the Status Quo option in 2022-23 were $8,799,885 which includes capital outlay of $5,293,745. In-house maintenance costs were $697,350.33 and outsourced maintenance (labor and parts) was $887,036.55. Electrification. Status quo would see the City following electrification and emissions targets. Electric vehicle availability is a risk in meeting those targets. Vehicle Availability. The dedication of the staff and judicious (and increasing) use of outsourcing have ensured a vehicle availability that meets industry standards. Business Continuity. In terms of continuity, the Status Quo option involves the least amount of interruption. May 7, 2024 Item #8 Page 26 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 23 Data. The City uses AssetWorks FA and the integrated Fuel Focus system. The Fleet Manager has training and experience and is able to use the data generated to make informed fleet management decisions. 6.2 Expand Shop The City has approved an initial design to increase the capacity of the shop by allowing for additional workspace. There are several options available that would allow space for additional mechanics which would decrease the time of repairs and ensure outsourcing (and related costs do not increase). Service Levels. Since the major complaints on service levels related to timeliness of repair, increasing the shop capacity and number of mechanics would result in an improvement in this area. Inhouse repair is almost always faster than outsourcing due to the ability of Fleet to decide priorities and no requirement to transport vehicles offsite. Cost. There is a one-time cost associated with the facility improvement that has yet to be fully quantified. The 2017 estimate was $2.2 million. An additional two mechanics would cost approximately $300,000 annually (using the City’s $73 per hour burdened rate time 2,080 hours per year) but be offset by a decrease in outsourcing of approximately 3,000 hours’ worth of work each year. These 3,000 hours of work costs approximately $600,000.00 to outsource at an average labor rate of $200 per hour. This rate reflects the average of rates provided by six local automotive repair shops. In addition, fleet would save some labor costs required to transport vehicles to and from vendors. Although Fleet has an arrangement with Ford to provide this service for free, Fleet personnel are used for this transportation to other vendor locations. Electrification. The acquisition of EVs is not impacted by shop expansion except that new bays could be specifically outfitted for EV needs. Vehicle Availability. Availability of vehicles will increase with additional in-house maintenance staff. Business Continuity. The expansion plan of the maintenance facility will have to be phased to allow uninterrupted work to continue in the main bays. Two options to avoid disruption – deployment of technicians to customer sites or short-term lease of facility adjacent to the current one. Despite this, some interruption to work would be expected. May 7, 2024 Item #8 Page 27 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 24 Data. As per the Status Quo option, The City uses AssetWorks FA and the integrated Fuel Focus system. The Fleet Manager has training and experience and is able to use the data generated to make informed fleet management decisions. 6.3 Delay Vehicle Replacement Many organizations are discussing the option of delaying vehicle replacement, either due to extended order cycles for vehicles or due to a shortage of capital funds. The economics of fleet replacement suggest that this is almost always a more expensive option than replacing vehicles according to their optimum lifecycle. Equipment capital costs tend to decline over time, while operating and maintenance costs increase. The combination of these two basic curves gives the total cost curve. The economic theory of vehicle replacement says that vehicles should be replaced when the Total Cost of Ownership (TCO) is the lowest, which is during the flat portion of the curve. This chart, from APWA’s “Managing Public Equipment”, shows this concept. The total cost curve can vary significantly for different types of equipment. Factors that impact total costs and lifecycle timing include purchase price, operating environment, utilization levels, and maintenance practices. It is, however, important to note that the optimum replacement point in the total cost curve is not a single point. The flat bottom of the curve indicates that vehicles should be replaced during that window of time (often a 1-2 year range), before maintenance costs spike. Delaying replacement past the optimum point can postpone the capital spend but will cost significantly more over the life of the fleet. Service Levels. Delaying replacement will increase maintenance time and spend as demonstrated by the graph pictured above. More time in the shop will result in a decrease to customer satisfaction. Cost. Delayed replacement is an attractive short-term option as it defers spend. The Economics of Fleet, however, will demonstrate that the TCO or lifecycle costs (capital costs, fuel and maintenance) for a fleet replaced beyond optimum lifecycles will increase. In the example below, the total lifecycle costs reflect the purchase price less residual value of the asset plus the operating costs (fuel and maintenance). This is divided by the years in service for the annual lifecycle cost and by the miles travelled for the cost per May 7, 2024 Item #8 Page 28 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 25 mile. The cost over least expensive is the additional cost of not replacing this vehicle in year 5. Fleetwide costs reflect that there are 132 of these vehicles in the fleet. Costs Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Lifecycle Total Cost $19,197 $29,609 $39,560 $49,883 $61,490 $75,466 $93,188 $116,476 Lifecycle Annual Cost $19,197 $14,804 $13,186 $12,470 $12,298 $12,577 $13,312 $14,559 Lifecycle Cost per Mile $1.72 $1.33 $1.18 $1.12 $1.10 $1.13 $1.19 $1.31 Costs over Least Exp $6,899 $2,506 $888 $172 0 $279 $1,014 $2,261 Fleetwide costs $910,668 $330,792 $117,216 $22,704 0 $36,828 $133,848 $298,452 The optimum replacement point for this vehicle is year 5. Keeping the 132 vehicles of the class for three additional vehicles (eight years) will increase the TCO by almost $300,000. Some other considerations include: • Vehicle costs, especially for heavy-duty and specialty vehicles are increasing at an unprecedented pace. Delayed replacement is therefore very costly. • There is a growing disconnect between budget cycles and replacement cycles due to delays in vehicle availability. Fleets may have to plan to place vehicle orders years in advance of the optimum replacement point. • Regulations regarding sustainable vehicle purchases are constantly evolving. Delaying replacement may force compliance purchases which will cost more. The average age of the City’s fleet is 6.8 years which is within best practice parameters, ensuring TCO is minimized. Electrification. Delaying vehicle replacement will likely postpone the adoption of EVs and meeting emissions targets, both of which are contrary to the City’s Strategic Plan and CAP. Vehicle Availability. Typically, an older fleet has higher downtime and lower vehicle availability. Business Continuity. Similar to the Status Quo option, there is little impact on operations in shifting to a longer lifecycle. Data. As per the Status Quo option, The City uses AssetWorks FA and the integrated Fuel Focus system. The Fleet Manager has training and experience and is able to use the data generated to make informed fleet management decisions. May 7, 2024 Item #8 Page 29 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 26 6.4 Lease Fleet Vehicles Two leasing options were explored: • a full service (maintenance lease) offered by Enterprise Fleet Management. • a finance lease offered by Holman Fleet Management. Fleet Management Companies (FMCs) may offer maintenance services. In the Enterprise model, the client can continue to maintain or coordinate their own outsourced maintenance, or Enterprise will provide this service for a flat monthly rate. That monthly rate includes one tire change and all necessary Preventative Maintenance inspections and work. Other FMCs, such as Holman (formerly ARI) will coordinate outsourced maintenance, if desired, but offer no fixed monthly rate. Note that where the FMC coordinates maintenance, they normally use national accounts which will be similar in price to rates the City receives from their outsourced providers. In order to have a specific sample to request pricing from leasing companies, we identified the number of VEUs that are beyond the capacity of current staff to repair. We then created a list of vehicles by number and type that equates to that number of VEUs. We requested quotes for full-service and finance-only leases on this sample. The total sample was 130 vehicles which totaled 253 VEUs. It included eight vans, nine sedans, 52 SUVs and 61 pick-up trucks. Service Level. Since only a portion of the fleet would be under a lease, service levels would be consistent with Status Quo. Cost. The cost of leasing is almost always more expensive than purchasing the vehicles. In order to make like comparisons, we asked two FMCs for financing information on five common fleet vehicles. The data received is indicative of the many factors that go into lease pricing and the fact that quotes are refined between the client and the Lessor. The prices reflected do not constitute an offer and are reflective of market conditions in October/November 2023. May 7, 2024 Item #8 Page 30 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 27 Holman vs. Enterprise Cost Comparison: Selected Light-Duty Classifications The key differences in the pricing offered by the two FMCs are the following: • Capitalized costs (cap costs) upon which monthly lease payments are based are significantly higher for Enterprise. • The Enterprise pricing is based on 10% down while the Holman pricing is for the entire cap cost. • Both examples are for 60 months. • The Holman pricing assumes no residual or resale value after 60 months while the Enterprise lease includes residual values which can be applied to replacements. • The lowest lease cost for each vehicle type is highlighted in green. Overall, in terms of capital costs (excluding maintenance), the City would pay the invoice price less incentives if purchasing these assets with cash. The least expensive option for each of the vehicle types is highlighted in green: Purchase vs. Managed Cost Comparison: Selected Light-Duty Classifications Vehicle Purchase Holman Enterprise 2024 F-150 XL $ 35,919 $42,900 $ 39,705 2024 Ford Maverick XL $ 25,681 $30,720 Not Avail 2024 Kia Niro PHEV EX $ 34,928 $41,760 $ 46,889 2024 Chevrolet Colorado WT $ 29,351 $35,100 $ 33,978 2024 Toyota RAV 4 LE $ 27,574 $33,000 $ 26,660 In almost every case, leasing is more expensive than purchasing. As interest rates increase, the difference between purchase and lease financing increases further. The other component of cost is the maintenance of vehicles repaired in-house compared to those maintained under a full maintenance lease with the Enterprise solution. Hohlman Vehicle MSRP Invoice Cost OEM Incentive Lessor Credit Lease activation Cap cost Down pmnt (10%) Monthly lease fee Full Maint fee Equity at 60 months Total Paid less Equity 2024 F-150 XL 38,565$ 36,419$ 500-$ 718$ 100$ 35,301$ 715$ NA 42,900$ 2024 Ford Maverick XL 27,215$ 26,136$ 455-$ 514$ 100$ 25,267$ 512$ NA 30,720$ 2024 Kia Niro PHEV EX 35,615$ 34,928$ TBD 699$ 100$ 34,329$ 696$ NA 41,760$ 2024 Chevrolet Colorado WT 30,695$ 29,351$ TBD 587$ 100$ 28,864$ 585$ NA 35,100$ 2024 Toyota RAV 4 LE 29,825$ 27,974$ 400-$ 551$ 100$ 27,123$ 550$ NA 33,000$ Enterprise with 10% down 2024 F-150 XL 41,072$ 4,107$ 898$ 108$ 18,282$ 39,705$ 2024 Kia Niro PHEV EX 41,396$ 4,140$ 905$ 61$ 11,551$ 46,889$ 2024 Chevrolet Colorado WT 29,851$ 2,985$ 657$ 108$ 8,427$ 33,978$ 2024 Toyota RAV 4 LE 28,474$ 2,847$ 627$ 112$ 13,807$ 26,660$ May 7, 2024 Item #8 Page 31 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 28 The Enterprise maintenance fee structure includes regular maintenance inspections, oil changes, and wear items, as well as the parts and labor associated with those tasks. However, this fee will only include one brake replacement and no tires. Maintenance Fees specifically exclude repairs due to neglect, abuse or collisions, repairs to aftermarket equipment, glass related repairs and body damage. Outsourced maintenance and repair parts and labor that are not included in the maintenance fee and would be charged as a direct ‘pass-through’ cost to the City with no mark-up. Fleet’s existing In-House services include all PMs, repairs, inhouse and outsourced maintenance, repairs, and all parts and labor regardless of reasons like neglect, abuse, or collision. Service Type In-House Enterprise Maintenance PM Inspection X X Oil Change & Filter X X Air Filter X X Wiper Blades X X Brakes X One Time Tires X Repairs Glass Repair X Body Repair X Parts X Labor X Aftermarket Equipment X Commercial Sublet X Symptom Diagnosis X The table below shows the per vehicle maintenance costs for a five-year period by vehicle type. In-house costs shown are actual average costs from the fleet data provided by the City. May 7, 2024 Item #8 Page 32 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 29 Five-Year Maintenance Cost Comparison (Per Vehicle) Vehicle In-House Enterprise* F-150 $9475 $6,480 Kia Niro PHEV $1905 $3660 Chevrolet Colorado $7,055 $6480 Toyota RAV 4 $4,310 $6720 *Five-year costs include only one brake job and no tires The annual maintenance costs of the F-150 are approximately $600 more if maintained by the City, and the Colorado is $115 more before accounting for tire changes, additional brake work and body work. On the other hand, savings of $1,755 are evident over the five- year life of a Kia Niro and $2,410 for a RAV 4 without accounting for additional savings for brakes and tires. The Maverick is not included as it is not currently available through Enterprise. If the sample of 130 vehicles is considered, the following table reflects the approximate costs to maintain these vehicles inhouse or through the Enterprise lease. Note that the eight vans are excluded as we have no pricing information for that vehicle class from Enterprise. The costs of the pick-up trucks show the actual distribution of F-150 (70%) and Colorado trucks (30%). Five-Year Maintenance Cost Comparison (Per Sample) Vehicle Count In-House Enterprise Pick-up Truck 61 $533,689 $395,280 Sedan 9 $ 17,145 $ 32,940 SUV 52 $224,120 $349,440 Total 122 $774,954 $777,660 The total of the five-year maintenance costs for the sample shows that the Enterprise model is slightly more expensive across the fleet sample and provides for less services than the in-house option. Electrification. The buying power of FMCs may ensure access to EVs that the City may not have been able to get. Also, with the increased capital cost outlay required to purchase an EV, leasing may be the only option to pursue electrification in a timely fashion. May 7, 2024 Item #8 Page 33 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 30 Vehicle Availability. The availability of vehicles would increase. If this was strictly a finance lease, vehicles would be replaced at optimum lifecycles, ensuring the average age of the fleet styed within recommended lifecycles and minimizing downtime. Business Continuity. Some adjustment would be needed to incorporate the leased vehicles and corresponding maintenance arrangements, but these adjustments would be minimal. Data. Arrangements with the leasing company can be made to ensure all data on leased vehicles in integrated into the City’s AssetWorks system. May 7, 2024 Item #8 Page 34 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 31 7. Recommendations The criterion and weights approved by the City were used to evaluate the options. This resulted in the decision matrix shown below. Each option is ranked per criterion from 1 to 4 with 4 being the best. That rank is multiplied by the criteria weights to get a total score. Finally, each option’s scores are totaled. Status Quo Build Delay Lease Weight Rank Total Rank Total Rank Total Rank Total Service Levels 3 2 6 4 12 1 3 3 9 Costs 2 4 8 3 6 2 4 1 2 Electrification 2 3 6 3 6 1 2 4 8 Vehicle Availability 1 2 2 4 4 1 1 3 3 Business Continuity 1 4 4 2 2 3 3 4 4 Data 1 4 4 4 4 3 3 2 2 TOTAL 30 34 16 28 The scores show that the City should invest in increasing the capacity of their shop. It is not the lowest cost option in the short term but will ensure service levels are maintained or enhanced, and vehicle availability is sustained. May 7, 2024 Item #8 Page 35 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 32 Appendix A – Job Descriptions A summary of the job descriptions for all fleet positions in Public Works appears below. Position Title Key Roles and Responsibilities Fleet Public Works Superintendent • Plan, direct and administer assigned functional and operational management, administration, maintenance and/or inspection programs. • Direct maintenance, repair, remodeling and replacement in assigned functional areas. • Respond to citizen and/or agencies or commissions complaints and inquiries. • Develop and implement goals and objectives for operations. • Ensure inspection programs of functional areas to determine work programs that meet maintenance standards. • Develop, direct and monitor preventive maintenance program(s) and associated maintenance schedules. • Evaluate work schedules against performance and customer service standards. • Ensure efficient systems for procurement of supplies, materials and inventories. • Authorize equipment purchases. • Participate in budget preparation, capital improvement projects and administration of budgets and exploration of alternative funding sources. • Serve in the capacity of assigned Manager as directed. Public Works Supervisor • Plan, organize and supervise personnel in the maintenance of fleet. • Oversee the accuracy and maintenance of time, material and equipment use records. • prepare job estimates and establish priorities for technicians. • Recommend the purchase of equipment and assist in the development of specifications. • Ensure the maintenance of various records and prepare reports as required. • Ensure the adherence of safe work practices by field maintenance personnel. • Coordinate field services maintenance activities with other city departments, divisions, and sections, and with outside agencies. Management Analyst • Prepare budgets and provide ongoing analysis, recommendations and monitoring. • Conduct surveys and perform research and statistical analysis on administrative, fiscal, human resources and operational problems and issues and make recommendations as appropriate. • Prepare and provide staff support on agenda bills. • Contract administration: prepare RFP’s, aid in analysis, negotiation and vendor selection, administer contract. May 7, 2024 Item #8 Page 36 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 33 Position Title Key Roles and Responsibilities Lead Equipment Technician • Lead, assign and inspect the work of equipment technicians and participate in all associated work. • Coordinate equipment maintenance activities with other city departments, divisions and outside agencies. • Inspect, diagnose and locate technical and electrical malfunctions on city automobiles, trucks, fire apparatus, water utility pumps, grounds maintenance equipment, and a variety of maintenance and construction equipment and their component systems. • Determine extent of necessary repairs for further repair work and scheduling; estimate parts and materials costs; recommend contract work as necessary. • Overhaul, repair, maintain and adjust a wide variety of gas and diesel powered automotive, truck and heavy equipment and their component and computerized systems. • Operate and maintain a complete set of hand, power, and shop tools and computerized diagnostic and test equipment used in the automotive and truck repair trade. • Maintain work, time, material and equipment maintenance logs and records; enter data into and retrieve, print and generate vehicle, equipment, and work order reports from computer information system. • Respond to emergency service calls for repairing or towing equipment that has broken down away from the shop. Equipment Technician I and II • Inspect, diagnose and locate technical and electrical malfunctions on city vehicles and equipment. • Overhaul, repair, maintain and adjust a wide variety of gas and diesel powered vehicles and equipment. • Operate and maintain a complete set of hand, power, and shop tools and computerized diagnostic and test equipment. • Perform smog inspections and repair smog inspection failures. • Perform general maintenance on cars, trucks and other equipment. • Respond to emergency service calls for repairing or towing equipment that has broken down away from the shop. • Fabricate and modify parts and equipment. • Perform minor welding, braising, soldering and cutting operations. • Pick up and deliver vehicles, parts and supplies as required. • Maintain work, time and material logs and records. • Assist other technicians with major technical repairs as required. • Observe safe working practices; maintain a clean and orderly work and shop area. May 7, 2024 Item #8 Page 37 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 34 Position Title Key Roles and Responsibilities Accounting Technician • Perform a variety of complex technical tasks involving the utilization of automated accounting and/or technical recordkeeping systems, including but not limited to, the development of forms and requirements for data entry, the review and checking of data prior to data entry, assist in the assignment of work to co-workers, assignment of account classification codes and preparation of specialized reports. • Participate in and/or provide lead responsibility in a variety of accounting activities, including accounts payable, accounts receivable, payroll and the preparation of departmental reports, audit of bills and invoices, balancing of cash drawer, and preparation of deposits. • Interpret state and federal codes, laws, the city Ordinance, and procedures that relate to the assigned areas and suggest recommended actions. • Design, review and check records, forms and other documents for accuracy, completeness and conformance to rules and regulations. • Respond and resolve citizen complaints and requests for information. • Prepare and maintain electronic and manual records and files related to assignment. • Prepare correspondence as necessary. • Assist in providing work direction and training to co-workers as assigned. • Assist in the development and implementation of systems and procedures. • Perform miscellaneous office and clerical duties as assigned. Warehouse Technician • Receive and unpack materials, supplies, parts and equipment. • Purchase and coordinate the storing of a wide variety of material, supplies, parts, tools and equipment. • Work with operating staff to determine needs. • Work directly with vendors to determine stock availability. Keep inventory stocked to minimum levels. • Source materials and equipment based on pricing, availability and services offered by vendors. • Prepare cost estimates for materials for construction, maintenance and repair work. • Conduct inventory and audit procedures to measure utilization, inventory costs and loss of materials at warehouse sites. • Process orders and maintain inventory transaction records in the computer database. • Maintain accurate records and files, including manual and computerized inventory control systems. • Enter purchase order requisitions into the City’s financial system, ensuring that departments are billed correctly for their purchases. Verify orders have been received before invoices are paid. • Maintain a log of surplus materials and equipment. May 7, 2024 Item #8 Page 38 of 52 Options Analysis Carlsbad, CA Matrix Consulting Group 35 Position Title Key Roles and Responsibilities Maintenance Assistant • Assists with the maintenance of vehicles or facilities including building and minor electrical repair, water works and streets. • Assists with special events, including driving trucks, supervising volunteers. • Moves stage pieces and equipment from storage cars to concert site. • Sets-up /retrieves traffic control signs. • Assist public with loading chairs on shuttle buses. May 7, 2024 Item #8 Page 39 of 52 Appendix B - Customer Service Customers/Function A B C D E Communication. Fleet communicates about the status of items in the shop and gives timely updates of work completion.2.00 4.00 5.00 4.50 4.00 Customer Service. Vehicle drop-off and pick- up is convenient, organized and handled in a professional manner.3.00 4.25 5.00 5.00 5.00 Preventive Maintenance. Fleet has a PM plan and ensures PMs are up to date on all vehicles.3.75 3.00 5.00 5.00 4.00 Vehicle Availability. Vehicles are available to meet operational requirements.DNR DNR 5.00 5.00 5.00 Timeliness of repairs. Vehicles are repaired in a timely fashion (major repairs 7 days, minor within 48 hours)2.00 3.00 5.00 4.50 4.00 Quality of repairs. Comebacks for the same issue should be very rare.4.25 4.50 5.00 5.00 4.00 Parts. When vehicles go for PM, the regular parts are on hand. Adequate and correct parts kept in inventory. System in place to get parts as needed.4.00 3.50 5.00 DNR 5.00 Technicians. Shop has adequate, trained techniciens for the volume of work.4.00 4.00 5.00 4.50 2.00 Acquisition Process. Customers are consulted throughout the process and the outcome meets their operational needs.5.00 4.20 5.00 4.00 4.00 Facility. The location of the shop and operating hours meet customer needs.5.00 3.70 5.00 3.50 3.00 Fuel. The location of fuel is convenient and good control measures are in place.5.00 2.00 5.00 5.00 5.00 3.80 3.62 5.00 4.60 4.09 FSD Wash bays. The location of wash bays is convenient and their availability meets customer needs.1.0 2.0 5.0 2.0 N/A Other Wash bays. The location of wash bays is convenient and their availability meets customer needs.1.0 5.0 N/A Cost. Capital and operating costs of fleet are transparent and fair.3.5 N/A 5.0 4.0 4.0 May 7, 2024 Item #8 Page 40 of 52 Customers/Function Utilities/Water Communication. Fleet communicates about the status of items in the shop and gives timely updates of work completion. Sometimes it is hard to get updates and customer is not advised when job is completed and vehicles are ready for pickup. Drivers find out by accident when they go for fuel and see vehicle in ready line. There is no automated email, text or call from fleet. Customer Service. Vehicle drop-off and pick-up is convenient, organized and handled in a professional manner. The drop off experience varies. If it is lunch time or everyone is busy the drivers will fill in a paper and leave keys on the counter .Other times someone is there to properly receive the vehicle. Preventive Maintenance. Fleet has a PM plan and ensures PMs are up to date on all vehicles. There is a PM schedule. PMs are usually done on time. However, additional maintenance that results from the PM may take a very long time and status is not communicated, especially for HD equipment. Vehicle Availability. Vehicles are available to meet operational requirements. There are times when loaners or rentals are needed as vehicles are in the shop. Timeliness of repairs. Vehicles are repaired in a timely fashion (major repairs 7 days, minor within 48 hours) Major repairs go beyond 7 days. Fleet prioritizes Jesse’s vehicles so turn them around more quickly. Quality of repairs. Comebacks for the same issue should be very rare.Very good. Parts. When vehicles go for PM, the regular parts are on hand. Adequate and correct parts kept in inventory. System in place to get parts as needed. Department has lots of special equipment that needs specialty parts. Overall, have reasonable parts on hand and a system to get specialty parts. Technicians. Shop has adequate, trained techniciens for the volume of work. On training, there have been issues with hybrids and techs seem to need training. Good quality work. Not enough techs. The number of vehicles has increased (more fire) but fleet does not get approved for more mechanics. Acquisition Process. Customers are consulted throughout the process and the outcome meets their operational needs. Timing for the replacement process is long. Possibly need more staff and also need more proactive communication. A monthly acquisition update would be good. Facility. The location of the shop and operating hours meet customer needs.Yes. May 7, 2024 Item #8 Page 41 of 52 Fuel. The location of fuel is convenient and good control measures are in place. Yes for conventional fuel but not great for charging. Need fast charging where vehicles are kept. Wash bays. The location of wash bays is convenient and their availability meets customer needs. All gone away. Have to go to a commercial car wash. Does not work for bigger vehicles. Not allowed to wash vehicles in yard. Can access bay with floor drain for large vehicles. Cost. Capital and operating costs of fleet are transparent and fair. Capital is fair and transparent. Take actual acquisition cost, billed ten years to replace. Does not include outfit costs or inflation. Always coming up short and making up the difference in auction revenue. Should be a more planned way by considering auction revenue. Operating – get spreadsheets annually on how rental rates are charged. No breakdown of fuel by vehicle. Assume 1600 hours of use per year for all vehicles. What are the main strengths of services provided by Fleet? Techs are helpful and responsive. They will help you out to meet op needs. Bradley is data-driven, excels in researching BP. Example is fleet electrification. Helps Managers do their jobs better. What areas of fleet-provided services need improvement? Pool vehicles – users can use training on EV, HEV and BEV Better comms and reasonable repair times. Updates when vehicles are done. More techs so they can make repairs on a timely basis. May 7, 2024 Item #8 Page 42 of 52 Police There is still some room for improvement. Across the last 7 years it has improved significantly. Automatic notifications would be helpful. Fleet is eager to work on vehicles. Very responsive with the steps in the process. Great job meeting Police needs, they struggle with workflow. Sometimes rely on external vendors when inhouse service would be faster. Fleet communicates a schedule but officers miss scheduled repairs. Good overall. This is subjective based on the type of repair. Fleet does a reasonable job of triage but needs a SLA to prioritize Police. They take a lot of pride and spend money required to keep vehicles in service. Thankful for the quality and the rating varies depending on the tech. With the new Hybrid PIUs there were a lot of parts delays. Supply Chain issues. Not enough staffing to meet police demand. Current staffing levels are not sustainable. Brad does a really good job providing Police what they need. The Finance Department holds up the process. The location and hours of opertion are great. The facility is lacking and needs more equipment, a training room, and a front desk. Currently customers walk right in to the shop and interrupt a tech when they drop off vehicles. May 7, 2024 Item #8 Page 43 of 52 Fuel 40 - 45 years old, work intermittently. People learn which pump will work with their vehicle. Only two locations. Yes they are. Interpersonal skills are off the chart good. They care about what they do and you cannot put a price on that. Relationships are incredible. High Trust. Staffing and additional training. May 7, 2024 Item #8 Page 44 of 52 Parks They go above and beyond whether they are researching options, great communication and email notice when repairs are complete. Doesn’t see where they can do much better. no comments no comments Haven’t heard any issues Never an issue, no come backs. Usually on hand. Chameleon parts not on hand, bobcat not on hand. Wait for inordinate time for repairs no comments no comments 12 minute drive, convenient especially compared to OK City May 7, 2024 Item #8 Page 45 of 52 No comments No comments Service is excellent and is right sized. Costs are competitive. Leadership, Brad runs a great shop, you can tell he loves what he does, does it with a smile, great communicator. Meticulous and efficient. None that he can think of. May 7, 2024 Item #8 Page 46 of 52 Public Works More automated system for service completion or calendar would make this more efficient. They’re great. No break in the system to his knowledge. There have been no breaks in service because of PM or repairs. Above expectations without statistical feedback. No quality control issues. Not familiar with the parts side, hasn't had any problems brought to his attention. Doesn't know the details, assumes the technicians are skilled and qualified. Pretty consistent. Operating hours are sufficient, location is inconvenient. May 7, 2024 Item #8 Page 47 of 52 EV charging is adequate. Fuel Island operation is satisfactory. We pay for washing out of our budget. We get carwash tokens for the vendor down the street. Ddoesn’t see it necessarily, an analyst does but Bradley walks them through all of their situations. Direct, great customer service, response time is excellent, I have a lot of confidence in fleet. PM scheduling calendar??? Maybe. (He’s a little removed from the process.) May 7, 2024 Item #8 Page 48 of 52 Fire Gotten a lot better, weekly update, Need more phone conversations with on duty crew. They call Ben instead of the station when something is complete. Expedites turn around. Couldn’t be better other than expected completion times. They do have a plan but the communication about late PMs is lacking. Call or email Dept head and Ben when PM is late. They have a calendar they put out. Fire is prioritized. Better than neighboring fire departments. Fire equipment is different than most vehicles. Delays are parts or contract related. There are some repeat repairs, where they cannot duplicate the problem or experience the driver’s concern. They do a great job They need more shop staff to be certified, and more people with class A license. Fire is supported as best as could be done. Bradley has many responsibilities, could use help. Location is good, but facility needs to be bigger with more bays. May 7, 2024 Item #8 Page 49 of 52 Convenient for FD old school pumps but work. Don’t even know how to use it, need a commercial set up with multiple bays,and hot and cold water. The interviewee is not getting the reports but they may be going to an analyst. Employees are very friendly, open minded and willing to help. They are creative and overcome obstacles. Fleet needs more staff, including techs. This would improve the timeliness of other departments getting work done. A reception type person would be good to stop people who need service from interrupting technicians. May 7, 2024 Item #8 Page 50 of 52 Appendix C - VEU Calculator Unit Type Count VEU's / Unit Total VEUs Maint Hours Classification Count VEU/asset Tot VEU Cart/ATV 5 0.5 2.5 26.25 Equipment MD 8 3 24 252 Equipment HD 17 5 85 892.5 Fire Aerial 2 8 16 168 Fire Apparatus 13 7 91 955.5 Fire Ambulance 9 6 54 567 Generator/Pump/Motor 7 0.25 1.75 18.375 Motorcycle 14 1 14 147 Patrol Pickup 3 3 9 94.5 Patrol SUV 55 3 165 1732.5 PD - Armoured Vehicles 1 5 5 52.5 PD - Control Center 2 5 10 105 Sedan 31 1 31 325.5 Sign / Barrier 12 0.25 3 31.5 SUV 84 2 168 1764 Sweeper 2 10 20 210 Trailer 18 0.5 9 94.5 Truck LD 92 2 184 1932 Truck MD 30 3 90 945 Truck HD 9 5 45 472.5 Van 14 2 28 294 Watercraft 3 2 6 63 Total 431 1061.25 May 7, 2024 Item #8 Page 51 of 52 1061.25 Total VEU's Hours per VEU 10 Baseline Hours per VEU 0 Adjustment for fleet age 0 Adjustment for utilization levels 0 Adjustment for operating environment 0 Adjustment for facility and tools 0 Adjustment for parts support 0.5 Adjustment for systems integration 10.5 Total Hours per VEU 11143.1 Baseline Total Hours Needed Technicians Needed 2080 Total Annual Paid Hours 70%Percentage Productive Hours 1456 Productive Hours per FTE 7.7 Total Filled FTE's Needed FTE % Productive Time Spent on Floor Authorized Position 0.5 50%1 Lead Technician 2.0 100%2 Heavy Duty Technician 2.0 100%2 Light Duty Technician 4.5 Current Authorized FTE's 5.0 15%Percentage Outsourced (hours)1671.47 6.5 Adjusted Filled FTE's Needed 2.0 FTE Shortage May 7, 2024 Item #8 Page 52 of 52 City Fleet Update Bradley Northup Public Works Superintendent, Fleet May 7, 2024 1 {city of Carlsbad Agenda FLEET OVERVIEW ECONOMIC & OPERATIONAL IMPACTS FLEET PROJECTS COST SAVINGS ANALYSIS (MATRIX REPORT) NEXT STEPS & INITIATIVES ITEM 8: State of the City Fleet {city of Carlsbad 2,147,000 miles traveled 264,332 gallons of fuel consumed FL E E T O V E R V I E W 490 vehicles & equipment (Equivalent to 1,061 passenger vehicles) 2390 metric tons of greenhouse gases Average age = 7 3 { City of Carlsbad Internal service funds Administrative Order No. 3 Maintenance rental rate Advocacy & collaboration Continuous process review & improvements ITEM 8: State of the City Fleet Best Practices ~ ~- Inflation & Supply Chain Fuel prices stabilizing but still elevated New vehicle pricing concessions down 90% Vehicle production down 20% Factory order allocation/restriction Widespread delays ITEM 8: State of the City Fleet Ec o n o m i c a l I m p a c t s $ How vehicles are used - Shared/Pool Available staff labor Fleet vehicle retentions & additions Costs & inflation Regulatory mandates ITEM 8: State of the City Fleet Op e r a t i o n a l I m p a c t s Fleet Operations ~ l(o O o]I Fleet Additions & Retentions 6916 7644 7280 7280 8008 8008 1355 918 1290 2016 1378 2288 5000 6000 7000 8000 9000 10000 FY18/19 FY19/20 FY20/21 FY21/22 FY22/23 FY23/24 Labor hour impact Labor Available Increased Labor Required 391 412 427 428 445 490 350 370 390 410 430 450 470 490 FY18/19 FY19/20 FY20/21 FY21/22 FY22/23 FY23/24 Additions & retentions Approved in Budget Capital Outlay Council Resolution Direct Purchase by Dept Mid-Year Donation■ ■ ■ ■ ■ ■ ■ ■ ITEM 8: State of the City Fleet Re g u l a t o r y I m p a c t s State regulation: Advanced Clean Fleets •Affects vehicles operated in California •Class 2b through Class 8 (8,500 pounds and up) •Fire & Police vehicles exempt •50% of fleet purchases beginning in 2024 •100% of fleet purchases beginning in 2027 •Carlsbad fleet = 58 vehicles affected 8 Vehicle Replacement Outlook $1,111,991 $148,003 $80,378 $117,728 $758,508 $1,017,300 $67,833 $348,268 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 FY25 SP ACF FY26 SP ACF FY27 SP ACF FY28 SP ACF Estimated Vehicle Costs & Replacement Fund Forecast PURCHASE ESTIMATE ACCUMULATED FUNDS ESTIMATED DEFICIT ~ - - ■ ■ ■ State & Federal Incentives $82,500 $120,000 $90,000 $240,000 $60,000 $360,000 $82,500 $280,000 $22,500 $45,000 $67,500 $52,500 $0 $250,000 $500,000 FY25 SP FY25 ACF FY26 SP FY26 ACF FY27 SP FY27 ACF FY28 SP FY28 ACF Potential state & federal incentives Federal IRA Max State HVIP Max 11 3 12 6 8 9 11 7 FY25 SP FY25 ACF FY26 SP FY26 ACF FY27 SP FY27 ACF FY28 SP FY28 ACF Zero emission vehicles purchase quantity I -I ~ I -I ■ ■ Internal process reviews – Matrix Investments in fleet software – Smart apps, asset analytics, charge management Investments in technology (GPS, telematics) Expanded communication with departments & drivers Infrastructure – Fleet garage re-model / EV charge depot ITEM 8: State of the City Fleet Co n t i n u o u s I m p r o v e m e n t 11 □ PROJECT – FLEET REMODEL 2023 September 2023 City Council awarded design contract July 2024 City Council asked to authorize bidding October 2024 City Council asked to award construction contract Summer 2025 Construction to be complete 20252024 May 2024 Submit applications for permittingFl e e t F a c i l i t y R e -Mo d e l 12 2023 November 2023 Phase 1 completed Two chargers live September 2025 Phase 2 complete 20252024 January 2024 Amended easement Fall 2024 Phase 2 completed 12 chargers live 2026 2027 September 2026 Phase 4 Complete September 2027 Phase 5 Complete EV C h a r g i n g D e p o t 2028 13 Matrix Report Matrix approach – profile, review, assess Surveys of user departments Identify options & decision criteria Exploration of cost savings - lease vs. purchase Cost benefit analysis & recommendations 14 ~ l[o Q oJI Surveys of user departments GOOD/GREAT •Vehicle availability •Quality of repairs •Customer service •Acquisition process NEEDS IMPROVEMENT •Timeliness of repairs •Communication •Number of technicians •Facility Matrix Report SURVEY CATEGORIES •Communication •Preventive maintenance •Timeliness of repairs •Parts •Acquisition process •Fuel 15 •Customer Service •Vehicle Availability •Quality of repairs •Technicians •Facility Approach - profile review & assessment ASSESSMENT •City & fleet policies are strong •Vehicles are within industry standards for age and lifecycles •Organizational shifting to electrification •Preventative maintenance compliance & repair times falling behind •Staffing & facility constraints Matrix Report 16 Options & Decision Criteria Matrix Report OPTIONS IDENTIFIED •Status quo •Delay replacement •Expand services •Lease – with/without maintenance 17 Options & Decision Criteria Matrix Report 18 Service levels 30% Costs 20%Electrification 20% Vehicle availability 10% Business continuity 10% Data 10% Cost benefit analysis L________. Matrix Report Options 19 ITEM 8: State of the City Fleet · atrix Rank/sco1re (40 Option P1rogram reco1mmendation po1int max) 0 1 am ta I1 status quo 0 30 2 Dellay ve 1 clle rep ~aceme 1 t 0 16 3 Ex cHl serv~ce capac11ty YES 3.4 0 Lease opt~o 0 28 Fleet Next Steps Add additional workspace – Remodel @ 90% Eliminate or reduce underutilized vehicles Increase access to vehicles - Consolidated motor pool EV conversions - Capitalize on state, federal incentives Utilize upgraded software to advance initiatives 20 [O[j National Recognition 8th Place 21 {city of Carlsbad Driven By You THANK YOU! 22 {city of Carlsbad