By Mike Antich

With the decline in tax revenues, public sector fleets are increasingly scrutinized by management, politicians, and taxpayers. At one time, there was anonymity in being a public sector fleet manager — no more. Years ago, fleet was not high on the radar screen. However, with zero-growth budgets, along with higher fuel costs, emission-reduction mandates, liability issues, and new regulations, fleet is now dead-center on the radar screen of senior management. In this environment, fleet managers are constantly being second-guessed by citizens, politicians, and user departments on the efficacy of their policies.

The sad reality is that these senior managers and politicians think they understand fleet, but really don't. Fleet managers are constantly dealing with the newly elected "fleet expert" politician who assumes their fleet is not run efficiently or cost-effectively. After every election, a fleet manager's expertise is questioned by newly elected officials who are going to "fix" fleet operations, which, in their mistaken perception, is wasting tax dollars. Consequently, fleet managers spend hundreds of hours of labor proving they are fiscally responsible, sometimes to no avail. Even using industry-accepted benchmarking to quantify performance, some politicians continue to assume taxpayer dollars are being wasted. These politicians believe anyone can run a fleet and no special skills are needed.

The scrutiny on state and municipal fleet managers isn't just coming from elected officials and taxpayers; it is also internal user departments. In an era of reduced revenues and the need for across-the-board budget cuts, there is growing competition for limited resources between user departments, with fleet in the middle. This competition for scarce resources promises only to increase next year as budgets tighten further.

Elected officials are similarly being squeezed by lower-sales and property tax revenue. They are looking at every opportunity to continue to provide the services and service levels constituents have become accustomed to receiving. Some elected officials have decided on short-term sacrifices of internal services (fleet is an easy target) in order to support short-term constituent services by choosing to outsource more vehicle maintenance and repairs to "lower-priced" private sector vendors.

However, not everything is focused on cost-cutting; some larger fleets are looking to generate revenue by insourcing work from other political subdivisions. A growing number of larger fleet operations are being approached by other smaller government agencies to take over their fleet maintenance operations, which allows them to cut overhead.

A Silver Lining to Today's Fiscal Environment

The tax revenue crunch is forcing governments to do a bottom-up evaluation of all services. With revenues down, budgets must still be balanced by law, which means certain services must be reduced. In the minds of some elected officials, it's easy to cut support services, such as those provided by fleet operations. The consensus among fleet managers is that there will be more outsourcing of work due to budget cutbacks. As a result, outsourcing will continue to be an ongoing and recurring topic for public sector fleets. As city, county, and state governments continue to develop financing strategies and look more closely at "what things cost," fleet managers will see a bigger push to outsource historically insourced services.

With the heightened possibility of more managed competition, the level of service provided by your fleet needs to be at the lowest cost with the data to prove competitiveness — not just with neighboring fleets, but also with private sector service providers. As fleet manager, you must know the exact cost of your fleet and be able to present it to your management at any time.

In a micro-managed climate, fleet managers also need to do a better job educating elected officials and taxpayers that fleet management is a very complicated profession, requiring expertise in a multitude of areas. The challenge will be for fleet managers to maintain customer service level objectives, while cutting costs. One silver lining to the current fiscal environment is that difficult economic times allow for wringing out the previously hard-to-remove waste. This presents a great opportunity for fleet managers. It allows them to be perceived by politicians and senior managers as "part of the solution" and not "part of the problem."

Let me know what you think.

mike.antich@bobit.com