Au­dits tar­get fleet poli­cies

re­im­burse­ments from work­ers may net $1.2 mil­lion; cut­ting ve­hi­cles could save $3 mil­lion, re­ports say

Austin American-Statesman - - FRONT PAGE - By Asher Price

A se­ries of au­dit re­ports sug­gest that Austin could earn $1.2 mil­lion a year by press­ing for re­im­burse­ment from city em­ploy­ees — a few of whom com­mute more than 100 miles a day in city ve­hi­cles — and could win­now its city fleet by as much as two-thirds, sav­ing $3 mil­lion.

The re­ports, re­leased in May to lit­tle fan­fare, in­di­cate gaps in over­sight re­gard­ing which city ve­hi­cles are al­lowed to be taken home and in the re­im­burse­ment by city em­ploy­ees who com­mute in the ve­hi­cles; in­suf­fi­cient stan­dards for de­cid­ing which ve­hi­cles are un­der­used and should be elim­i­nated from the fleet; and the un­like­li­hood of the city meet­ing its main en­vi­ron­men­tal goal for the fleet.

Though the is­sues cut across city de­part­ments, many of them lie in the baili­wick of Fleet Ser­vices, a city depart­ment with eight ser­vice cen­ters, 169 em­ploy­ees and a $39 mil­lion bud­get to over­see the life cy­cle of a 5,400-ve­hi­cle fleet rang­ing from rid­ing lawn mow­ers to firetrucks and back hoes.

The au­dit ex­am­i­na­tions grew out of a 2009 city risk anal­y­sis on fuel costs, City Au­di­tor Ken­neth Mory said. They add to the bur­den of Fleet Ser­vices, which has had to face re­ports, first in the Austin Chron­i­cle in De­cem­ber, about prob­lems with its dis­posal of scrap tires. At least one Fleet Ser­vices of­fi­cer was fired, po­lice and en­vi­ron­men­tal of­fi­cials launched in­ves­ti­ga­tions, and the depart­ment

Con­tin­ued from A1 tight­ened its pro­to­col. The depart­ment is also ex­pect­ing, in sev­eral weeks, the re­sults of an out­side re­port on its op­er­a­tions, Fleet Ser­vices of­fi­cer Gerry Calk said.

“It’s a very big, com­plex op­er­a­tion,” he said. “There are go­ing to be pot­holes in the road. That’s the na­ture of busi­ness.”

An au­dit on the city’s take-home ve­hi­cle pol­icy, which al­lows city em­ploy­ees to drive home ve­hi­cles for strate­gic and prac­ti­cal rea­sons, of­fered a mixed mes­sage. The au­dit re­port noted a 42 per­cent de­crease in take-home ve­hi­cles as­signed by de­part­ments since 2008, from 538 to 313. The take-home ve­hi­cle pol­icy, com­mon in cities across the coun­try, is meant to ben­e­fit the city by mak­ing ve­hi­cles avail­able to em­ploy­ees who re­quire them for rapid re­sponse or be­cause it’s a cost-ef­fec­tive sit­u­a­tion for the city, said Sa­man­tha Park, a city spokes­woman.

“Say you have a city in­spec­tor who lives up north and does work up north,” she said. “The city can gain an ex­tra hour of em­ploy­ment from him if he does not have to drive (down­town) to pick up a ve­hi­cle.”

But it also found that some em­ploy­ees with the Austin Po­lice Depart­ment who have take-home ve­hi­cles have com­mutes of 144, 118 and 110 miles a day. City rules pro­hibit po­lice em­ploy­ees from tak­ing a ve­hi­cle home if their res­i­dence is more than 25 miles out­side the city lim­its. (Em­ploy­ees with other city de­part­ments must live in the “city ser­vice area” to qual­ify for take-home ve­hi­cles.)

To­tal com­mut­ing miles in city ve­hi­cles dur­ing 2009 and 2010 amounted to 10,600 miles per day in take-home ve­hi­cles, or 2.4 mil­lion miles per year, ac­cord­ing to the au­dit. If em­ploy­ees were to re­im­burse the city for these miles at 50 cents per mile, roughly the amount pre­scribed by the IRS for re­im­burse­ment, the city would take in $1.2 mil­lion.

The is­sue has led to trou­ble with the fed­eral govern­ment. An IRS au­dit in 2009 found that for 2006, the city pro­vided a tax­able fringe ben­e­fit to em­ploy­ees when it did not re­quire them to re­im­burse the city for com­mut­ing miles. As a re­sult, the city was as­sessed $20,000 in taxes for com­mut­ing mileage not re­ported.

The city man­ager’s of­fice, in a re­sponse to the city au­dit, noted that it is im­ple­ment­ing a new pol­icy that will treat take-home ve­hi­cles as a fringe ben­e­fit to be taxed.

The au­di­tor found no ev­i­dence the ve­hi­cles were ac­tu­ally be­ing used for non­busi­ness pur­poses, but did re­port that some city em­ploy­ees who live out- Fleet Ser­vices has 169 em­ploy­ees at its eight ser­vice cen­ters in Austin, in­clud­ing Ernest Lopez, 40. At Ser­vice Cen­ter No. 6, Lopez is check­ing the flu­ids on one of Austin’s firetrucks. All fire res­cue ve­hi­cles and EMS ve­hi­cles un­dergo a thor­ough check at least once a year. Austin’s fleet com­prises 5,400 ve­hi­cles, rang­ing from rid­ing lawn mow­ers to back hoes and po­lice cars. side the city ser­vice area had been as­signed take-home ve­hi­cles.

Fleet Ser­vices could also tighten the stan­dards to de­ter­mine which ve­hi­cles should re­main in the fleet, ac­cord­ing to an­other au­dit is­sued in May. The city is meant to elim­i­nate or trans­fer un­der­used or un­nec­es­sary ve­hi­cles, and fleet ser­vices is sup­posed to iden­tify them.

“Sell­ing the ve­hi­cles can yield sal­vage value, and re­de­ploy­ing them to de­part­ments with needs could re­duce or elim­i­nate the need for new ve­hi­cles,” the au­dit re­port says. “In ad­di­tion, fewer ve­hi­cles in the fleet could re­duce fuel and main­te­nance costs as well as to­tal car­bon emis­sions.”

Un­der city pol­icy, ve­hi­cles must be driven fewer than 2,400 miles a year to qual­ify for elim­i­na­tion. The au­di­tor’s of­fice found that other city and state gov­ern­ments had much higher thresh­olds. The State of Texas and the Uni­ver­sity of Texas Sys­tem, for ex­am­ple, re­quire that a ve­hi­cle log 11,000 miles a year or face elim­i­na­tion.

At a min­i­mum of 11,000 miles, 66.8 per­cent of Fleet Ser­vices’ light-duty ve­hi­cles would be con­sid­ered un­der­used, pos­si­bly sav­ing the city about $3 mil­lion if they were elim­i­nated. (In its writ­ten re­sponse to the au­dit, city man­age­ment said Texas and the UT Sys­tem rep­re­sent larger geo­graphic ar­eas than Austin.)

Even those ve­hi­cles that are iden­ti­fied as un­der­used are of­ten not elim­i­nated, how­ever.

The au­dit found that in 2008, the last time Fleet Ser­vices did a com­pre­hen­sive un­der­uti­liza­tion study of ve­hi­cles, it iden­ti­fied 219 un­der­used ve­hi­cles. Ul­ti­mately, only 11 were re­moved from the city fleet.

A third au­dit re­port ques­tioned whether the city could live up to its aim of hav­ing a car­bon-neu­tral fleet by 2020.

In 2007, 8 per­cent of ve­hi­cles were ca­pa­ble of us­ing al­ter­na­tive fu­els that cut car­bon emis­sions, which have been linked to global warm­ing. In 2009, 52 per­cent of city ve­hi­cles were ca­pa­ble of us­ing al­ter­na­tive fuel. But only 22 per­cent of the fuel used that year was al­ter­na­tive.

“The City will not achieve a zero car­bon emis­sion fleet,” the re­port noted.

Nev­er­the­less, Austin has “one of most re­spon­si­ble en­vi­ron­men­tal fleets,” said Calk, not­ing that it has more hy­brids than any other fleet in the coun­try.

He said al­ter­na­tive fuel use has vastly im­proved this year over last, when the au­dit was pre­pared. Last year Fleet Ser­vices used about 1,600 gal­lons a month of al­ter­na­tive fu­els; this year that amount is more than 16,000 gal­lons a month.

He said that last year, city ve­hi­cles could not use as much as 20,000 gal­lons of de­liv­ered biodiesel be­cause it was of bad qual­ity, foul­ing the en­gines of dozens of ve­hi­cles.

The Fleet Ser­vices depart­ment has faced crit­i­cism from the city au­di­tor be­fore. In 2001, au­di­tor Stephen Mor­gan found ex­ces­sive turnover in the depart­ment’s ranks. He found the “man­age­ment con­trols over the qual­ity and cost of ser­vice de­liv­ery can­not en­sure an avail­able, re­li­able, eco­nom­i­cal, and en­vi­ron­men­tally re­spon­si­ble fleet of ve­hi­cles.”

A fol­low-up re­port in 2004 found im­prove­ment, es­pe­cially with the speed with which Fleet Ser­vices ad­dressed emis­sions prob­lems in city ve­hi­cles. But the depart­ment con­tin­ues to be “stretched a lit­tle thin,” Calk said.

Since 2001, the fleet has grown about 20 per­cent, from 4,300 units to 5,400 units. Dur­ing that same time, the depart­ment has slimmed down from 222 po­si­tions to 189, a 15 per­cent loss. Twenty po­si­tions are un­filled.

Thao Nguyen

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