The City owns a large fleet of vehicles and equipment so employees can perform work-related functions across approximately 469 square miles. The Department of General Services (GSD) procures vehicles for all Council-controlled Departments and is responsible for fleet maintenance and repair of non-public safety vehicles. Staff from the Los Angeles Police Department (LAPD) and Los Angeles Fire Department (LAFD) are responsible for maintaining vehicles assigned to their respective departments. The City’s Proprietary Departments (Los Angeles Department of Water and Power, Los Angeles World Airports, and Port of Los Angeles) each procure, maintain, and administer their own vehicle fleets.
Of the 11,000 vehicles and equipment that GSD maintains, approximately 2,000 are passenger vehicles such as cars, SUVs, vans, and light trucks that are used for general business purposes, such as travel to offsite meetings. These passenger vehicles can be categorized into three major groups:
- departmental fleets consisting of vehicles that are controlled by departments and can be assigned to an individual employee or shared by multiple employees;
- the Executive Fleet consists of vehicles assigned to elected officials, elected officials’ staff, or department heads; and
- the General Motor Pool consists of vehicles that are controlled by GSD and can be temporarily checked-out by employees to conduct work-related functions during business hours.
According to GSD data, the average age of passenger vehicles assigned to these pools (i.e., departmental fleets, Executive Fleet, and General Motor Pool) is eleven years old. The cost of performing corrective maintenance on these vehicles is significant; the City spent approximately $8.3 million on direct labor and parts over the last four years (not including employee benefits and other overhead costs).
As vehicles owned and operated by the City age, advances in transportation technologies, along with innovative procurement options and maintenance strategies, afford the City a unique opportunity to reassess how it provides transportation services to its employees. The focus of this review is on strategies to administer and maintain passenger vehicles used for general business purposes. Many of the concepts recommended within this report can also be applied to the City’s management of all fleet vehicles and equipment.
A historical reliance on purchasing and maintaining vehicles in-house, combined with funding instability and budgetary constraints, has challenged GSD’s ability to maintain an optimal replacement cycle. As a result, the City expends significant resources on corrective maintenance that otherwise would not be required if alternative procurement and transportation options were pursued, and the City was able to maintain a smaller, and newer, fleet of passenger vehicles.
This review provides financial and operational data on general purpose passenger vehicles owned and operated by the City, and explores options, such as vehicle leasing, mileage reimbursement, and alternative maintenance strategies. These options should be considered as they could provide more cost effective solutions for procurement, maintenance, and replacement of passenger vehicles. With an aim to reduce and modernize the City’s fleet of passenger vehicles, this review recommends that the City consider the following strategies.
Implement Alternative Procurement Models to Meet Operational Needs
Leasing is a common practice for federal, State, and local government agencies to consider when procuring passenger vehicles. Cost savings may be achievable through bulk leasing of vehicles through commercial vendors.
Reduce Corrective Maintenance Costs and Enhance Vehicle Safety through Leasing
Newer vehicles obtained through leases are less likely to incur significant corrective maintenance costs, and vehicle issues may be covered by manufacturer warranty. In addition, newer models may be equipped with the latest safety features such as backup cameras, automatic emergency braking, electronic stability control, and blind-spot warning systems.
Promote Alternative Options for Employee Transportation
In lieu of utilizing pool vehicles to conduct City business, options such as public transportation, personal vehicle mileage reimbursement, and telephone/video conferencing should be promoted to reduce the overall size of the City’s fleet.
Consider How to Best Utilize and Engage Fleet Management Companies
The City may achieve cost savings through partnering with fleet management companies that specialize in assisting large organizations with many aspects of fleet management including procurement, maintenance, administration, and vehicle monitoring using GPS/telematics.
Partner with Transportation Network Companies to Provide Innovative Employee Transportation Solutions
Advances in transportation technologies have disrupted traditional fleet management models. With several Transportation Network Companies (TNCs) already operating in the local area, the City could leverage the technology and network capabilities of TNCs by establishing formal partnerships that provide enhanced transportation services to City employees at favorable costs, reducing the need for the City to procure and maintain passenger vehicles.
Review of Report
A draft of this report was provided to GSD management on September 4, 2018 for review. GSD noted the distinction between vehicles in the general/executive motor pools and the vehicles assigned to departmental fleets. We considered these comments as we finalized this report for issuance. Specifically, we clarified that the issues and suggested actions noted in this review are relevant to the City’s entire fleet of passenger vehicles that are used for general business purposes.