August 2007

City of Naperville's Vehicle Replacement Scoring Model

Jim Inglese, Fleet Services Manager, and Nels Olson, Fleet Analyst, City of Naperville, Illinois

One of the toughest issues concerning municipal fleet managers is determining the ideal time to replace vehicles and equipment. Dispose of it too soon and you waste productive fleet life and capital funds. Wait too long and you will be burdened with an unreliable unit that can strain your maintenance budget.

The Fleet Services Division of the City of Naperville, Illinois has developed a unique and successful Vehicle Replacement Scoring Model. Located 35 miles southwest of Chicago, Naperville is an award-winning city with a population of 140,000. According to Jim Inglese, Fleet Services Manager for the 570-vehicle Naperville fleet for the last 14 years, "Our current model has evolved from a combination of different vehicle replacement models, our experience and knowledge of the relevant variables, and accurate vehicle repair coding and cost histories. As our model evolved, we have 'back tested' scoring model changes against past replacement decisions for validation."

The City's replacement program is funded by a dedicated Vehicle Replacement Fund which is replenished from intra-departmental monthly charges. All vehicles and equipment are assigned a fixed service-life-cycle, expressed in months, based on the vehicle or equipment classification and replacement history. The charge is calculated by dividing the vehicle replacement cost by the assigned service-life of each unit in months. If units are retained past their designated service-life, the replacement charge is reduced to 10% of this amount.

When a vehicle is within the last two years of its scheduled life cycle, it becomes a candidate for annual Replacement Scoring. If its Replacement Score exceeds the replacement criteria score, it is scheduled for replacement in the next fiscal budget year. If it scores below the criteria, it is retained and scored again each year until it exceeds the replacement criteria score, even if it exceeds its assigned replacement age.

Scoring Model
The scoring is totaled using scores on the following six performance and cost variables:

• Age: One point for each twelve months of service-life.
  
  
• Usage: Odometer-based vehicles: one point for each 10,000 miles; hour meter-based small equipment: one point for each 325 hours; hour meter-based large trucks/equipment: one point for each 750 hours.
  
  
• Type of Service: 1 to 5 points based on severity of service, i.e., 1 for an administrative car, 5 for a triple-shifted police patrol car or sewer jetter.
  
  
• Reliability: Calculated as the ratio of the number of "normal" repair occurrences over the last twelve months (LTM) of service divided by the number of "normal" repair occurrences in the vehicle's second twelve months (STM) of life. For example, if the LTM is 6 and the STM is 2, the Reliability Score would be 3 (6/2). "Normal occurrences" exclude planned maintenance (PMs) and all "non-normal" repairs, i.e., accidents, flats, Acts of God, driver related, warranty, etc.
  
  
• Condition: The score is scaled from 1 to 5 based on an inspection of the body, underbody, and structural members, rust, interior condition, a review of accident and repair history, any operational problems and anticipated major repairs within the next budget year. A score of 5 would be in very poor condition with high expectations for major future expenses.
  
  
• Repair Costs: 1 to 5 points are assigned based on total life-to-date (LTD) repair costs (excluding "non-normal" repairs) and the original purchase price of the vehicle. A 5 is scored for a vehicle whose LTD repair costs exceed the original purchase price. A score of 1 is given to a vehicle whose LTD repair costs are 20% or less of the original purchase price; a 2 for 40%, 3 for 60%, and 4 for 80%.

Replacement qualification scores are 23 points for all sedans and light trucks and 28 points for heavy-duty vehicles and off-road equipment whose gross vehicle weight rating (GVWR) exceeds 10,500 lbs.

"This scoring model has been very successful for Fleet Services and the City," states Inglese. "The ability to quantify replacement decisions is supported by Finance, City Manager, and elected officials. The model has also justified extending the economic life of many units resulting in the savings of tens of thousands of dollars in annual capital spending. From a maintenance and reliability perspective, we have flattened expenditure increases and extended the in-service time for our customers."

Jim Inglese can be reached at (630) 420-6086 or inglesej@naperville.il.us; Nels Olson can be reached at (630) 305-5265 or olsonn@naperville.il.us.