HomeMy WebLinkAboutItem 04.aMemorandum
To: Mayor and City Council
Steven C. Mielke, City Administrator
Dennis Feller, Finance Director
From: Chris Petree, Public Works Director
Date: November 25, 2013
Subject: Street Division - Fleet Supervisor Cost Justification
ITEM 4 -a
City of Lakeville
The City Council, at its November 19 work session, directed staff to seek 2014 budget savings
(cost reductions) if the Fleet Supervisor position was approved.
Fleet Supervisor
The Fleet Supervisor position responsibilities include but not limited to monitoring and
controlling maintenance costs, expanding the application of technology, focus on improving
fuel efficiency and parts inventory control.
There are a number of areas which we believe the Fleet Supervisor can provide improve cost
efficiencies. An example is fuel management by implementing new fuel efficient strategies,
policies and purchasing program. Secondly, expanding the efficient application of technology
to the City's fleet management system has potential significant outcomes as result
management, purchasing and inventory control of commodities and inventories An example
is the mobile management equipment on the City's plow trucks, which will result in a
reduction of deicing chemical usage that has been demonstrated in other agencies.
2014 Budget
The 2014 Proposed Budget was reviewed for expenditure appropriations which could be
reduced as a result of hiring a Fleet Supervisor that is anticipated to improve efficiencies.
Staff estimates that the 2014 Street Division — overtime - budget can be reduced by $2,700
if the Fleet Supervisor is approved.
2015 and beyond
The City spends approximately $1 million each year for motor fuels and parts as well as
approximately $300 thousand for ice control chemicals. Although exact cost savings is
unknown, a 5 -10% cost reduction could annually save the City $65,000- $130,000 each year.
The Fleet Supervisor annual compensation, including benefits, is $100,900.
Furthermore, the average annual acquisition of fleet equipment is approximately $1.8 million.
Again, while staff is uncertain of the exact cost reductions with the addition of this position,
we are confident that efficiencies will be gained, performance improved and costs will be
reduced by the addition of this position.
City Staff will therefore reduce the 2015 commodities budget by $65,000 if the Street
Supervisor position is approved.