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VEHICLE REPLACEMENT PROGRAM FOR THE
OLATHE FIRE DEPARTMENT
EXECUTIVE LEADERSHIP
BY: David M. Dock
Olathe Fire Department
Olathe, Kansas
An applied research project submitted to the National Fire Academy
as part of the Executive Fire Officer Program
April 2002
2
ABSTRACT
The Olathe Fire Department has an effective vehicle replacement program for all
fire apparatus. However, the vehicle replacement program for staff vehicles has a
consideration for replacement at five years, and actual replacement at 90,000 miles or
10 years. This has typically created a fleet of unreliable staff vehicles with high mileage,
as well as excessive maintenance costs.
The purpose of this research project is to identify guidelines for an economical
but efficient means for staff vehicle replacement. It will provide management with the
proper information required in making an informed decision regarding the department’s
staff vehicle replacement program. It is the hope of this researcher that this research
will serve as our initial guideline in implementing a replacement program policy that is
based on standards or guidelines that will benefit our community by providing a reliable
and economical fleet of staff vehicles. In addition, this program will possibly provide
other fire and EMS services the opportunity to purchase vehicles that are safe and well
maintained at an affordable cost to their organization.
The researcher utilized the descriptive research method to answer the following
questions.
1. What is the rationale that should be used to determine when a vehicle should be
replaced?
2. What are the financial implications for this program if implemented?
3. Would other local fire service agencies be interested in acquiring these vehicles
at the end of our program? If so, what stipulations would they have to purchase
the vehicle?
3
The procedure used to accomplish this research was to collect both current and
past records to help determine the effectiveness of the program. In addition, the
researcher reviewed current practices employed by the Olathe Fire Department as it
related to the city’s fleet management program. It also identified literary resources to
help direct possible changes to the fleet management program
The results of this research indicated:
1. The Olathe Fire Department’s current vehicle replacement policy is to
consider replacing a vehicle at 5 years of age, but actually replace the
vehicles at 10 years or 90,000 miles.
2. The Olathe Fire Department does not have a designated person to monitor
the above policy or fleet status and depends on a very back logged city
service department to alert them to vehicle needs. Neither the fire
department nor the service department has a data base to judge when a
vehicle should be considered for replacement at the 5 year mark.
3. The fire department operates with several high mileage, high maintenance,
high down time, unreliable vehicles.
4. The corporate world and the government world have very different views on
when to replace fleet vehicles.
The researcher compiled a list of recommendations that would most likely
provide for a safer, more efficient, and economical fleet for the fire department. They
included:
1. The fire department should designate a specific fleet manager to monitor
and evaluate individual vehicle’s condition and needs.
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2. The fire department should develop a pilot program utilizing a replacement
policy that considers replacement at 3 years by reviewing overall condition,
mileage, out-of-warranty maintenance costs, and downtime. Actual replacement
of “good condition” vehicles will be at 5 years or 70,000 miles.
3. The current practice of selling replaced vehicles should continue as long
as the city is receiving fair market value.
This researcher has recognized that if this plan is not implemented, there is a
high probability that the fleet will have reliability problems and create unreasonable
maintenance costs and vehicle downtime. Conversely, complete implementation would
produce a significant department and community benefit by allowing the maintenance of
a newer, safer, more efficient and reliable fleet of staff vehicles.
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TABLE OF CONTENTS
ABSTRACT…………………………………………………………………………………….2
TABLE OF CONTENTS………………………………………………………………………5
INTRODUCTION……………………………………………….……………………………...6
BACKGROUND AND SIGNIFICANCE………………………..……………………………7
LITERATURE REVIEW………………………………………………………………………11
PROCEDURES………………………………………………………………………...……...15
RESULTS……………………………………………………………………………….……...19
DISCUSSION…………………………………………………………………………….….…22
RECOMMENDATIONS…………………………………………………………………..…...24
REFERENCES….……………………………………………………………………………..26
APPENDIX A SURVEY AND COVER LETTER...…………………………………………27
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INTRODUCTION
The Olathe Fire Department has an effective vehicle replacement program for all
fire apparatus. However, the vehicle replacement program for staff vehicles has a
consideration for replacement at five years, and actual replacement at 90,000 miles or
10 years. This has typically created a fleet of unreliable staff vehicles with high mileage,
as well as excessive maintenance costs.
The purpose of this research project is to identify guidelines for an economical
but efficient means for staff vehicle replacement. It will provide management with the
proper information required in making an informed decision regarding the department’s
staff vehicle replacement program. It is the hope of this researcher that this research
will serve as our initial guideline in implementing a replacement program policy that is
based on standards or guidelines that will benefit our community by providing a reliable
and economical fleet of staff vehicles. In addition, this program will possibly provide
other fire and EMS services the opportunity to purchase vehicles that are safe and well
maintained at an affordable cost to their organization.
The researcher utilized the descriptive research method to answer the following
questions.
1. What is the rationale that should be used to determine when a vehicle should be
replaced?
2. What are the financial implications for this program if implemented?
3. Would other local fire service agencies be interested in acquiring these vehicles
at the end of our program? If so, what stipulations would they have to purchase
the vehicle?
7
In addition to the above research questions a survey was sent to area Kansas
Fire and EMS agencies to help answer the other program questions. This researcher
asked the following five questions.
1. How often do you replace your staff vehicles?
2. Prioritize what are the most important determining factors for purchasing used
staff vehicles.
3. What type of staff vehicles would your organization be interested in purchasing?
4. Would your organization be interested in purchasing any of the above used staff
vehicles?
5. What price range would your budget allow for the purchasing of a used staff
vehicle?
BACKGROUND AND SIGNIFICANCE
The Olathe Fire Department is a full service emergency services organization,
just south of the Kansas City metropolitan area. The department serves a 60 square
mile area and approximately 102,000 citizens.
The Olathe Fire Department is comprised of three organizational divisions which
oversee various operations for the department. Within the Emergency Services
Division, there are approximately 88 personnel and 6 stations. This division’s fleet
status consists of 7 front line apparatus comprised of 3 engines and 4 75’ aerial ladders.
The unstaffed fleet consists of one 1989 95’ aerial platform and 5 engines (1986 being
the oldest engine in the fleet). In addition, the organization has a 2001 Heavy Rescue
and HazMat response unit, one front line 1999 Ford Expedition Battalion Chief’s vehicle,
and one unstaffed 1993 Chevrolet Suburban Battalion Chief’s vehicle. This division is
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comprised of the Assistant Chief of Emergency Services, who oversees all of the daily
activities of the division. The Emergency Services Division consists of three battalions
(A, B, and C shifts) which are comprised of a battalion chief, seven captains, seven fire
apparatus operators, and 14 firefighters per shift. In association with the Emergency
Services Division, the Olathe Fire Department has two other divisions: Life Safety and
Prevention, and Administration and Support Services. These divisions handle the other
vital functions of the fire service. The Life Safety and Prevention Division is made up of
an Assistant Chief, four fire inspectors, and two public education specialists. This
divisions fleet consists of a 1994 Crown Victoria for the fire marshal, three 1998 and one
2000 Ford Explorers for the fire inspectors as well as two 2000 Ford Windstar vans for
the public education personnel. The division handles programs such as fire
investigations, business inspections, plans review, explosives removal and detonations,
and public education programs. The Administration and Support Services Division is
comprised of the Deputy Fire Chief, the Chief of Training and Personnel Development,
the Emergency Manager, and three administrative services personnel. The
Administration and Support services fleet consists of three 1995 Ford Taurus, two 2000
Ford Explorer’s for the Chief and Deputy Chief, one 2002 Ford Explorer for the Chief of
Training, one 1994 Ford Bronco, one 2001 Ford Econoline van, and one 2000 Ford
Windstar. This division oversees the entire department’s administrative functions
including budget management, departmental fire and EMS training, emergency
management operations, planning, and coordinating the department’s health and safety
programs. Other administrative programs within this division include all support
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services such as purchasing, information technology, and facilities maintenance. All
three divisions are then directed and organized by the fire chief.
After reviewing the current fleet status you can see that it appears the fleet is
fairly new which is true but this is only within the past few years. The prior fleet was
mainly comprised of old hand me down police vehicles and late model 1980 and early
model 1990 sedans. It was only recently that our fleet has been upgraded to its current
status. This is primarily because the economical conditions in our area had been very
good. However, with the current economy and with budget cuts, the replacement of the
fire department staff vehicles could fall behind again.
The fire department’s mission is to provide life and property protection from the
risk of fire, hazardous materials incidents, emergency medical incidents, accidents and
natural disasters. The mission of each division is accomplished through the
achievement of the following goals (Olathe Fire Department, 1994):
• Continually improving the department’s ability to be a full service emergency
response organization.
• Maintaining an adequate level of personnel, facilities, and equipment to handle the
expected number and types of emergency services.
• Providing the necessary amount of employee training to maintain the capability to
provide a high level of emergency services.
• Managing the level of risk by emphasizing plan review, code enforcement, pre-
emergency planning, fire investigation and public education.
• Preparing for major emergencies by emphasizing emergency preparedness
planning, incident management, and coordination with county and state agencies
and private industry resources.
• Performing evaluations and long-range planning to measure performance as well as
forecasting changes that will affect the cost or level of services provided.
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• Utilization to maximum efficiency and effectiveness, all resources provided by the
citizens of Olathe.
The research conducted is a required component for the Executive Leadership
program for the National Fire Academy’s Executive Fire Officer Program. The topics
covered in the Executive Leadership course directly related to this research project in
several areas; however, the main topic that I utilized during this research project is in
the area of networking. The definition of networking supplied in the student manual for
Executive Leadership is “the ability to create and maintain an effective, widely based
system of resource that works to the mutual benefit of oneself and others” (NFA, SM 10-
7). This project helped me to expand my normal working relationship to those outside
the fire department to include members of city staff, Kansas Fire and EMS leaders, as
well as other community businesses to help identify various components of this
program. Networking is a vital role each executive officer must realize early on in ones
career or they will be doomed to fail. I realized this even more during our classroom
discussions and watching the various presentations from other students and from the
video programs. Leaders must rely on the experiences and expertise of others through
the various networks of professions so each of us can make the most accurate and
informed decisions. This module has helped me to identify my networking skills
inventory, which indicated my skills for networking is fairly balanced on the three sides
of the triangle. My strength is being in the working relations area of the triangle. This
includes building and maintaining positive relationships and working to get the job done.
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LITERATURE REVIEW
An analysis of literature on the subject of fleet replacement plans was conducted
through a search of journals and books at the National Fire Academy learning resource
center as well as area public libraries. Additional research was conducted through
resources available on the Internet and by conducting various interviews.
In an effort to ensure that the Olathe Fire Department provides an economical
and effective fleet of staff vehicles, the researcher felt it was necessary to re-evaluate
our organization’s vehicle replacement program’s policies and implementation. After
reviewing our department’s mission statement and goals of performing evaluations and
long-range planning to measure performance as well as forecasting changes that will
affect the cost or level of services provided, the researcher felt it was necessary to
proceed with this project.
Currently, the City of Olathe has set up a funding plan to replace staff vehicles
every five years (City of Olathe, 2001). The money to replace all existing fleet vehicles
is available at 5 years; however, the policy is only for consideration at 5 years with
replacement primarily occurring at 10 years or 90,000 miles. While researching this
topic, it was discovered that several programs, in various government municipalities,
identified a wide variety of programs. These programs ranged from replacing vehicles
after they reach a certain mileage, on average 70,000, or age of the vehicle. Most of
the programs that use age of vehicle, utilized 7-10 years as their replacement
benchmark. For example, the state of Texas uses the following criteria to replace
vehicle in their fleet:
• Sedan and wagons are replaced at six years or 90,000 miles.
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• Light trucks and Sport utility vehicles are replaced at six years or 100,000 miles
(State of Texas, 2000).
The city of Redondo Beach, CA utilizes 7 years or 70,000 miles for all SUV type
vehicles (City of Redondo Beach, 2001). Our city’s replacement policy appears
appropriate considering the research. However, this researcher is not convinced that
this policy is economical and efficient? With the variety of range that was discovered, it
seemed to beg for more investigation.
In the city of Coral Springs, Florida they developed similar criteria but went one
step further. They developed a multi step check list and reviewed each vehicle annually
so they could project vehicle replacement costs each year. The first step in this check
list is to look at the vehicles physical appearance and the operating condition. Next,
they review the driving conditions that the vehicle sustains on a daily basis and compare
it to the department’s needs. Finally and most importantly, they determine the total cost
of ownership. This includes purchase price or replacement cost, maintenance costs life
to date, current and depreciated value, or residual value at the time of replacement
(Saunders & Morando, 1999). Another variable to consider is that as the fleet gets older
replacement parts are harder to locate and are typically more expensive leading to
longer down time (Peterson, 1994).
During a review of the Olathe Fire Department’s fleet, this researcher identified
the life safety and prevention division’s vehicles as the staff vehicles that were due for
the next replacement cycle. The fire marshal’s and the inspector’s vehicles were
specifically the oldest in the fleet. The fire marshal is driving a 1994 Ford Crown
Victoria which is being replaced in June of 2002. The fire inspector’s vehicles consist of
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four 1998 Ford Explorers. The following chart shows the comparison of each vehicles
fleet history from the city’s fleet manager. The chart includes some of the variables that
should be considered when determining the vehicles replacement, according to this
researcher’s findings during the literature review.
YR/Make/Model Initial cost Current value Depreciated Total Life Total
As indicated Difference to date down
by Edmunds cost of the hours
(Fair Market) vehicle
1998 Ford $24,217.00 $12,380.00 $11,837.00 $3,681.99 831
Explorer w/48,903 miles
1998 Ford $24,217.00 $13,000.00 $11,217.00 $2,003.02 595
Explorer w/40,208 miles
1998 Ford $24,217.00 $12,181.00 $12,036.00 $1,896.56 125
Explorer w/55,209 miles
2000 Ford $22,824.00 $14,450.00 $ 8,374.00 $ 603.00 59
Explorer w/47,990 miles
According to Automotive Fleet magazine 2000, the total cost to operate a SUV
during 2000 cost approximately $456.35 per month for the plains region. This includes
fixed costs such as depreciation, insurance, and license fees. This price is the standing
expense for vehicles whether or not the vehicle is used daily or not. This additional
costs adds about $5,400 to the vehicles cost per year.
This researcher interviewed Mike McGavran the regional manager of Enterprise
Rental Car Company. He provided the following information which leads to the best
practices followed by a national rental car company. There is no doubt that they rely on
their fleet management program to provide them with the highest return on their
investments. It was interesting to see the difference in government and corporate
thinking.
14
1. Q. What factors do you use to determine when vehicles should be
replaced i.e. years, mileage or a company formula? A. Enterprise uses mileage as
there primary determining factor on when a vehicle should be resold. Typically, at
around 20,000 to 30,000 miles, vehicles are auctioned or returned to the dealer
depending on how the vehicle was purchased. The mileage determination is arrived at
due to two factors, the vehicle warranty is still in affect, and the vehicle depreciation is
such that the company can still make money off of the vehicle if it is still in good
condition.
2. Q. How do you price your vehicles for resale? A. It depends on the way
the vehicle was purchased or leased. Usually, our resale department will sell the
vehicle on our own lots at a fair price according to blue book values. We try to avoid
auctioning vehicles in good condition. Auctions typically bring a lower value and we
may lose money.
3. Q. What are your best practices when it comes to purchasing and
reselling vehicles in your fleet? A. Primarily, we base our resale off of the vehicles
mileage. However, we also know that the vehicle costs us approximately 2% per month
to operate and maintain. A $24,000 vehicle will cost us around $480.00 per month.
Again, this is another reason we try and release the vehicles around 20,000 to 30,000
miles, which is around one year for most of the Enterprise offices.
An advantage that the City of Olathe and Enterprise share is that both
organizations get fleet price breaks on all vehicle purchases. The City of Olathe
purchases all of their vehicles with state or metro wide bids, depending on the vehicle
being purchased and who has the best pricing. As Mr. McGavran stated in his
15
interview, by getting vehicles at a lower price, depending on the vehicle, you should be
able to operate slightly longer and still be able to resale the vehicle at a profit or break
even.
A good program for procuring the appropriate vehicles, including training,
maintenance, and replacing it before it becomes unreliable is vital to the protection of
your community (Peterson, 1994).
PROCEDURES
This research utilized the descriptive research methodology to systematically
examine the Olathe Fire Department’s staff vehicle program in order to assist in the
decision making process regarding the effectiveness of the program. The process was
to collect current and past vehicle maintenance records and purchasing records which
were used to help determine the status of our current program. In addition, the
researcher reviewed current practices employed by the Olathe Fire Department as it
related to this program. In order to assess our department’s potential to resale our
vehicles as part of this program, a survey was mailed to 60 Kansas Fire Chiefs and
EMS administrators of departments ranging from 5,000 to 10,000 citizen in there
communities. The population was used to help narrow the survey size. This was also
determined a prospective group for purchasing used vehicles due to their limited
budgets. They were asked five basic questions (appendix A) that helped to identify
issues for possible participation in the program as well as what they felt were valuable
factors when considering purchasing a used vehicle. The research also identified
literary resources and various governmental publications. These helped identify
possible changes to for our current program. For example, reviewing this information
16
increased the researcher’s knowledge about what was occurring with fleet acquisitions
throughout the public and private sectors across the country. This was reemphasized
during the interview with Mike McGavran the regional manager of Enterprise Rental
Car. This allowed a more informed decision concerning adjustments that may be
needed in our program.
The purpose of this project is to decide if the current staff vehicle program is
sufficient, and if not, to determine the feasibility of the resale of our current vehicles
earlier to maintain a newer and more economical fleet. The research used in this report
began with a literature review of materials gathered from the Learning Resource Center
at the National Emergency Training Center, the media resource center of the Olathe
Fire Department, city fleet maintenance and purchasing records, as well as information
gathered at local libraries and the Internet. The literature review primarily focused on
the various fleet management programs implemented throughout the fire service and in
the private sector. This review process was also limited to organizations that were
comparable to our community and had policies in place regarding vehicle replacement
programs. Additional information was gathered by this researcher by reviewing
computer files and survey results. This information was helpful in identifying various
trends within our fleet.
Limitations
The following limitations were identified by this research. The possibility of not
receiving a significant and beneficial return on the survey questions that would enabled
this researcher to answer some of the research questions. Another possible limitation
for this researcher would be if the inability to locate sufficient maintenance records or
17
enough literary sources to effectively identify the answers to the research questions.
The literature review produced very few comparable communities with replacement
programs. One final limitation to the implementation of this program would be the city
not accepting the results and therefore failing to implement the recommendations from
this research.
Research Methodology
The research methodology that was used was a descriptive review of the Olathe
Fire Department’s records, survey results, and current practices along with a review of
various literary sources and interviews. A content validity test was performed to validate
the survey questions for their appropriateness to this research project. The validity test
returned an 89% validation on the survey questions with five outside the department
personnel. The initial procedure was the use of a survey instrument to determine the
various factors that individuals would use to purchase a used vehicle. The survey was
mailed to 60 Fire and EMS leaders across the state of Kansas with a cover letter of
explanation and a stamped, self addressed return envelope (see Appendix A for a copy
of the survey and cover letter). The survey questions were designed to provide
information in an attempt to answer the research questions. Sixty percent, 36 out of 60,
surveys were returned. This statically validated the results for this survey.
A literature review was conducted to study the various bodies of information
available regarding fleet management programs. Due to a lack of information on fire
department fleet management of staff vehicles, most of the information was obtained
from local government policies and private corporations. The literature review also
included a review of fire service articles written for fire apparatus fleet management in
18
hopes that some of the information regarding fire apparatus could be utilized to justify
changes in staff vehicle management programs.
Additionally, the city’s fleet manager was contacted to obtain vehicle
maintenance records to identify initial cost factors and yearly maintenance costs for
each of the vehicles surveyed. The vehicles selected for this analysis were the vehicles
from the life safety and prevention division. They were selected for the following two
reasons. They are out of the office and on the road conducting building and fire alarm
system inspections throughout the city. It is felt that this group of vehicles would have a
higher tendency to incur higher mileage. This group of vehicles was also purchased
approximately 5 years ago and is due to be considered for replacement under the city’s
current program.
The last procedure utilized as part of the research project was to conduct an
interview with an area rental car company. This was done because fleet management
is essential to their company’s success. Rental car companies are in business to make
as much money as possible from every vehicle in its fleet. This is a great philosophy to
have when it comes to fleet management.
Definition of Terms
Vehicle life- how long the vehicle is retained before it is replaced. The vehicle life is
determined by how the vehicle is used and for what purpose.
Total Cost to Life of the Vehicle- calculated by totaling all the expenses to keep the
vehicle operational. This doesn’t include fuel, oil, depreciation, licensing or insurance
costs.
Depreciated difference- the calculated difference between the purchase price and the
wholesale price including the current mileage of the vehicle and the vehicle qualifying
for the good condition category in Edmunds pricing system.
19
Total Down Hours- the total number of hours the vehicle was out of service for repairs
according to our fleet records management system.
RESULTS
Research Question # 1
1. What is the rationale that should be used to determine when a vehicle
should be replaced?
According to the research that was discovered as part of this project, the
overwhelming consensus outside of the fire service and or government is to use
mileage rather than years. This is due primarily to the fact that individual vehicles with
lower mileage are still entitled to a manufacture’s warranty. However, according to the
local survey results gathered, 80% of the respondents indicated that they replace their
staff type vehicles after ten or more years. According to Enterprise manager Mike
McGavran, the most effective way to resale a used vehicle is to have low mileage with a
manufacture’s warranty or to have the ability to purchase an extended warranty. The
vehicle also needs to be in good condition. As we approach the year to consider
replacement of our inspector’s vehicles, it is obvious this fleet incurs high mileage. This
shows that the vehicles are obviously out of the manufacture’s standard warranty and
that the resale value has been affected due to the high mileage. Again the new owner
is looking for value for there money which was proven as a result of the survey which
was sent. The two most important reasons for considering the purchase of a used
vehicle is the price with 70% of the 36 respondents agreeing and 100% of the 36
respondents stated that condition and warranty of the vehicle were equally important.
20
Due to the wide range of variables found in the research, this researcher was
forced to try to adapt the best and most logical ideas from several different sources. A
proposal that makes the most sense to this researcher is to consider replacement of a
vehicle at 3 years. A record of each vehicles overall condition, mileage, out-of-warranty
maintenance costs, and downtime should be considered at 3 years. If this vehicle has
excessive mileage for age (>45,000), unusual out-of-warranty maintenance costs and/or
downtime, or is in poor overall condition, this vehicle should be replaced. If at 3 years
the vehicle is within normal mileage, has had only general maintenance needs, and is in
overall good condition, the vehicle should remain within the fleet to 5 years or 70,000
miles, at which time it will be replaced.
Research Question # 2
2. What are the financial implications for this program if implemented?
The current process used for funding fire department fleet replacement within the
City of Olathe is as follows. The city purchases a vehicle for the fire department. The
fire department then makes a monthly payment of 1/60th of the total vehicle price to a
vehicle replacement fund. In five years, the money to replace that vehicle is waiting in
that fund. All vehicles are fiscally replaceable at 5 years. In theory, the problem
vehicles that should be replaced at 3 years will cost more and bring less in resale.
Therefore, it should also be fiscally responsible to replace these vehicles at 3 years.
This will provide a safer, more efficient and reliable fleet.
The current city’s purchasing manager stated that the city purchases vehicles at
dealer cost due to our current purchasing agreement with the state and the metro area
purchasing agents for local government. He also states that, at this time, the city is
21
making a fair market value at auction when reselling the replaced vehicles. Therefore,
the city is not suffering the initial off-the-lot depreciation and is still getting fair market
value at resale. He believes that if these conditions hold true, this proposed
replacement policy change is feasible. The current funding structure works as long as it
is followed as described by the purchasing manager and the profits are returned to the
vehicle replacement fund as required in the city’s administrative policy (2001).
Another consideration for financial implications of this proposal involves the City
Service Department. The City Service Department does all of the general maintenance
and out-of-warranty maintenance on most city fleet vehicles. In reality, this department
is very back logged and has a difficult time keeping up with the demands of fleet
maintenance. The new proposal will create a fleet of vehicles that have a higher
likelihood of being under a manufacture’s warranty. This should reduce maintenance
costs and workload on the City Service Department. Due to the decrease in workload,
it should also improve efficiency of general maintenance throughout the city’s fleet and
decrease vehicle downtime. This should create a safer, well maintained fleet of
vehicles.
Research Question # 3
3. Would other local fire service agencies be interested in acquiring these
vehicles at the end of our program? If so, what stipulations would they have to
purchase the vehicle?
According to the survey results 45.45% of the 36 respondents stated that they
would be interested in purchasing used vehicles. Seventy percent of the respondents
regarded some type of sport utility vehicle as the most desired. Sixty percent of the
22
respondents also stated that they would be interested in purchasing some type of 4X4
pick up. Again, the major stipulation to purchasing a vehicle was price with 37.5% of
the respondents saying that they would purchase a used vehicle as long as the price
was below $12,000. However, 25% of the respondents did advise they would spend up
to $15,000 if the warranty and the condition of the vehicle was worthy of that price. It
would appear that there may be some interest in area fire and EMS agencies
willingness to purchase used vehicles from our agency. However, the survey shows
that it would be unlikely that area agencies would be willing or capable of purchasing
the vehicles at a market price. The vehicles that are kept for 5 years may have a
desirable market price, but they would not have a manufacture’s warranty and the
mileage would be higher. A solution to this issue would be for the city to purchase an
extended bumper-to-bumper warranty for each vehicle. This would increase the sales
price, but it would help in the resale value of the vehicles making them more attractive
to other local government agencies or fire and EMS departments in Kansas.
DISCUSSION
This research was conducted under the premise that the Olathe Fire Department
needed to improve its vehicle replacement program. Nothing in the research indicated
that such a program would be anything but a benefit if designed and implemented
carefully and correctly. After researching the various components for this program
change, it appeared that the most appropriate change would be to decrease our years
of service for our vehicles based on corporate and some government industry standard.
According to the City of Santa Monica California, since the inception of their vehicle
replacement program, the fleet has been modernized, fuel efficiencies have improved,
23
and vehicle emissions have been reduced. They also reported the following changes
by replacing city vehicles sooner. City employee morale and pride improved,
productivity increased, and employee and public safety was enhanced (City of Santa
Monica, 2001).
The Enterprise representative stated that they saw an increase in there ability to
resale there vehicle when they made a point to release them after 20,000 to 30,000
miles. Several important components enabled them to set this best practice for their
industry. They were able to provide a used vehicle to a high demand market. Mr.
McGavran stated that most of the used car buying market was looking for high quality
vehicles with low mileage and a factory warranty still in place. He also identified with
the quicker turn around, they were able to reduce there company’s overhead by
reducing the amount of capital outlay they had to incur on each vehicle.
One of the main drawbacks to this proposed change in the city’s vehicle
replacement program is the unknown variables. If funding is reduced due to budget
cuts or the city has to cease new vehicle purchases for a time due to financial reasons,
the aggressiveness of this plan may not continue to be feasible. A pilot program will
help provide actual cost/benefit analysis to prove whether this program is as
economically feasible as the current program. There is no doubt; however, that this
program would provide a more efficient and reliable fleet than the current program.
After conducting the survey, it helped to reinforce the same components from the
earlier research. It verified that the main items required by the fire service and EMS
departments in Kansas were warranty, condition of the vehicle, and low prices. It also
indicated that our local market is looking for SUV’s and 4x4 pick-up type vehicles.
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However, the survey indicated split decision on purchasing our used vehicles. The
city’s current program of reselling the vehicles at auctions is the most economical at this
time. Reselling the vehicles to other governmental agencies may not be a current
solution, since they are looking for cheaper vehicles. If we turn our vehicles over quicker
they will be worth more money than the respondents to this survey are willing to pay.
RECOMMENDATIONS
Based on the previous research, the Olathe Fire Department may benefit by
completing the following recommendations:
1. The Olathe Fire department should designate a fleet manager to maintain
a data base on each staff vehicle’s age, general condition, mileage, maintenance
costs/needs, and downtime.
2. The Olathe Fire Department should conduct a pilot program that would
follow the replacement guidelines that each vehicle will be considered for
replacement at 3 years after reviewing the data base information. A decision will
be made based on that information, if the vehicles will remain in the fleet or be
replaced. All vehicles will be replaced at 5 years or 70,000 miles.
3. The current practice of selling vehicles at auction will continue, as long
as the city receives fair market value.
A pilot program will help provide actual cost/benefit analysis to prove whether this
program is as economically feasible as the current program. There is no doubt;
however, that this program will provide a more efficient and reliable fleet than the
current program. The research shows that the value of a vehicle is based on much
more than age. A program that looks at all of the variables that create the value of a
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vehicle should be more efficient than the current program. Designating employees
responsible for tracking these variables will guarantee a smoother running program.
Maintaining a newer fleet will decrease the workload on the City Service Department
improving its efficiency also. The community will be better protected by the employees
of the Olathe Fire Department in reliable, economical, and safer staff vehicles.
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REFERENCES
Automotive Fleet. (2002). 2000 Fleet Operating Costs by Region. (pp. 50).
City of Olathe. (2001). Administrative Regulation F-06.
City of Redondo Beach. (2001). Fleet Service Guide.
Edmunds. (May 2002). Edmunds' Used Cars & Trucks Prices
Olathe Fire Department. (1994). Fire Department Mission Statement.
Perkins, C. (2001). Memo to Mayor and City Council Agenda Item.
Peterson, C. (1994). When should apparatus be replaced? Minnesota Fire Chief.
(pp. 13 &28).
Saunders D., & Morando, N. (1999). How to improve fleet replacement programs.
Better Roads.
Texas Department of Transportation. (2000). Vehicle Replacement Program for the
State of Texas.
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APPENDIX A
SURVEY & COVER LETTER
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Vehicle Replacement Survey
1. How often do you replace your staff vehicles?
a) 1-3 years
b) 4-6 years
c) 7-9 years
d) 10 years or older
2. Please prioritize (1-5) what is the most important determining factors for
purchasing used staff vehicles.
____ Price
____ Mileage
____ Warranty
____ Condition
____ Other factors (please specify) ________________________
3. What type of staff vehicles would your organization be interested in
purchasing? (circle all that apply)
a) Sedan
b) Sedan with police package
c) SUV 4X4 i.e. Explorer
d) Pick up
e) Pick up 4X4
f) Mini Van
4. Would your organization be interested in purchasing any of the above used
staff vehicles?
a) Yes
b) No
5. What price range would your budget allow for the purchasing of a used
staff vehicle?
a) $ 7,000 to $ 9,000
b) $10,000 to $12,000
c) $13,000 to $15,000
d) $16,000 to $18,000
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February 20, 2002
Kansas Fire Chief
, Kansas
Chief,
I am currently working on the development and possible implementation of a vehicle
replacement program for the Olathe Fire Department. This process is being
documented as an Applied Research Project for the Executive Fire Officer’s Program at
the National Fire Academy.
I would ask that you or a member of your staff take a few minutes to assist us. Please
fill out the short and simple survey and return it by March 10, 2002. Your input will be
extremely helpful.
You can mail the survey back in the enclosed envelope or fax it to (913) 393-6768.
Thank you in advance for your help.
Training Chief David Dock
