El Dorado County Board of Supervisors September 16, 2008

BOS Policy #D-4 is not being followed. Paragraph B.2 titled “Vehicle Use” requires the CAO’s Office to review permanent assignment and overnight retention of County-owned vehicles on an annual basis and to continue or rescind authorization. Interviews with the CAO’s office revealed that this has not been done for several years. Response to Finding 1: The respondent partially disagrees with the finding. Policy D- 4 was revised in 2006 so it is inaccurate to suggest that the policy has not been followed for “several years.” At the time of their interview with the Grand Jury, Chief Administrative Office staff indicated that a full review of assigned vehicles has not been done this year, but would be completed following the conclusion of the annual budget process. Staff also indicated that the Board of Supervisors considered permanent assignment and overnight retention of vehicles within the Department of Transportation on March 11, 2008.

Paragraph B.2.a of the policy specifies that an employee who is responsible for responding to emergency situations related to public health or safety and protection of property on a 24-hour basis may be assigned a vehicle for on-call duty. Those on those days the employee is assigned the on-call duty. However, paragraph B.2.b is subject to interpretation and allows any County employee that can demonstrate to the Board of Supervisors that it is in the best interest of the County for that employee to be assigned permanent and overnight retention of a County-owned vehicle. Response to Finding 2: The respondent agrees with the finding.

The purchase of County vehicle fuel is a budget item within various County departments, and is not a component of the Fleet Management process. This is a significant County expense…estimated to be over 1.6 million dollars next year and represents nearly 40% of total fleet costs. Response to Finding 3: The respondent agrees with the finding.

Fuel purchases for County vehicles are not centrally managed or controlled. The County’s primary fuel vendor possesses very sophisticated reporting capabilities and would be able to provide excellent tools in an effort to better manage fuel purchases. Response to Finding 4: The respondent agrees with the finding.

The 50 vehicles identified as “Department 99” or department owned are not managed by Fleet Management, so the efficiency of operating those vehicles (which represent nearly 10% of the County total) is difficult to determine. Response to Finding 5: The respondent agrees with the finding.

County fleet costs for 2008-2009 are estimated to be 4.2 million dollars, with projected total miles at over 5.4 million. These costs represent a cost to the County of 77.2 cents for every mile driven. As a point of reference, the rate the County reimburses employees to drive their own vehicles on County business is 50.5 cents per mile, or 26.7 cents per mile less than the County spends on its own vehicles. We do recognize that the County per mile cost is an average of ALL vehicles, including some heavy duty vehicles. Response to Finding 6: The respondent partially disagrees with the finding. Section 5(b) of the county travel policy (D-1) says, “Travel by private auto in the performance of “official County business” shall be reimbursed at the Federal rate as determined by the Internal Revenue Service.” The IRS recently announced a new mileage reimbursement rate for the period of 7/1/08 through 12/31/08 of 58.5 cents per mile.

In reviewing the take-home vehicle list many of the assignments are not for “health and safety” or on-call status use. Take-home vehicles are driven 21% more miles per year, per vehicle when compared to the balance of the Fleet managed vehicles. One reason is that take-home vehicles include “commute” miles. Response to Finding 7: The respondent agrees with the finding.

Potential cost savings to the County exist in two areas: a. The conversion of miles driven in County-owned vehicles to private vehicle reimbursement would save 26.7 cents per mile. If a 10% 5 reduction were achieved, the County would save an estimated $145,278 annually. Response to Finding 8a: The respondent partially disagrees with the finding. As indicated by the Grand Jury in Finding 6, the average cost per mile driven in a county vehicle is potentially inflated by the inclusion of heavy duty vehicles which are more expensive to purchase, operate and maintain. In addition, the Internal Revenue Service recently announced a new mileage reimbursement rate for the period of 7/1/08 through 12/31/08 of 58.5 cents per mile. These factors combined suggest that the Grand Jury overestimated the savings per mile to the county from increased reliance on employees’ personal vehicles. The Board of Supervisors also notes that it is infeasible to substitute personal use vehicles for heavy duty vehicles contained in the county fleet. More problematic however is the fact that over the past approximately 10 years, the top selling vehicles in the County of El Dorado have been Sport Utility Vehicles and Trucks. Nationwide the Ford F-Series truck was the top selling vehicle for over 20 years. Those vehicles purchased over the last 10 years are currently the most commonly owned vehicles by El Dorado residents. As shown below the ownership cost per mile of these vehicles is well above the 58.5 cents per mile reimbursement rate. Given this negative reimbursement rate it is unlikely to see a 10% reduction in miles driven because there is little incentive for employees to use their own vehicles for county business. COMMON CURRENTLY OWNED VEHICLES IN EL DORADO COUNTY Ownership Mileage Over 5 Ownership Costs Over 5 Years at 12k Miles Per Vehicle Model Year & Type Years Year** Ownership Cost Per Mile 2007 Chevy Tahoe $ 50,664.00 60000 $ 0.84 2007 Ford F-250 $ 58,130.00 60000 $ 0.97 2007 Ford Explorer $ 44,106.00 60000 $ 0.74 ** 12,000 miles per year based on www.epa.gov However, over the past year or so the trend has changed. The top selling vehicles in El Dorado County are currently the Toyota Camry, the Toyota Corolla, and the Honda Civic. The ownership cost per mile of these vehicles is far less then those historically sold in El Dorado County, making reimbursement for some uses more acceptable in up coming years. COMMON CURRENT TOP SELLING VEHICLES IN EL DORADO COUNTY Ownership Mileage Over 5 Ownership Costs Over 5 Years at 12k Miles Per Vehicle Model Year & Type Years Year** Ownership Cost Per Mile 2007 Toyota Camry $ 30,796.00 60000 $ 0.51 2007 Toyota Corolla $ 24,743.00 60000 $ 0.41 2007 Honda Civic $ 24,952.00 60000 $ 0.42 ** 12,000 miles per year based on www.epa.gov b. A 10% reduction of total County vehicle miles driven would yield a 77.2 cent per mile savings, estimated to be $419,862 annually. Response to Finding 8b: The respondent partially disagrees with the finding. It is obvious that reduced driving saves money. Given the factors outlined in the response to 6 finding 8a however, it is likely that the Grand Jury has overestimated the actual savings per mile and failed to recognize the difficulty of providing a cost-effective incentive for employees to use personal vehicles for county business. In addition, reduction in vehicle miles incurred on county business potentially results in service reductions to the public. The Grand Jury has not specified where these services reductions should occur or provided a compelling rationale for why service reductions should occur.

Our investigation indicated that Fleet Management is performing their function well. Response to Finding 9: The respondent agrees with the finding.