FLEET MANAGEMENT FUND
Fleet Management is responsible for setting labor, parts, and fuel rates that are charged to user departments for vehicle repair and maintenance. This provides Fleet Management with a stable revenue stream that can be adjusted to mirror public and private market trends. Prior to FY 1999, fuel and maintenance/repair services were charged back to departments through the maintenance and repair-vehicles account without a mark-up. However, this process made the billable labor rate the primary revenue source, thus pushing the labor rate out of the market range while parts and fuel prices were considerably below the market average. Now parts and fuel are ordered through Fleet Management and then sold back to departments with a mark-up that is comparable to the average mark-up in the private sector. Because of the Town’s cost structure, Fleet Management can add the mark-up and still maintain market competitiveness (mark-up is reviewed annually to ensure competitiveness). In FY 2010, Fleet Management is planning to hold the labor rate, markups on parts and fuel, and the outsourcing fee flat.
DESCRIPTION OF REVENUE SOURCES
· Parts = $112,328
Accounts for the 19% mark-up on parts billed to user departments.
Accounts for the 14% mark-up on fuel billed to user departments.
· Labor = $600,000
Accounts for the total labor charges billed to user departments for vehicle repairs. In FY 2010, the labor rate is $60.00 per hour.
· Outsourcing Fee = $27,944
Accounts for the $19.00 per transaction fee billed to user departments to cover the oversight costs associated with sending repair work to a private vendor.
· Interest Earned = $20,000
Income derived from investments attributable to the fleet management internal service fund.
· Fuel - Morrisville = $138,650
Per an agreement entered into between the Town of