County Manager’s Office
August 4, 2010
BOARD MEETING DATE:
September 28, 2010
Honorable Board of Supervisors
David S. Boesch, County Manager
2009-10 Grand Jury Response
Accept this report containing the County’s response to the following 2009-10 Grand Jury report: San Mateo County’s Vehicle Fleet Management and Employee Vehicle Reimbursement Programs.
BACKGROUND / DISCUSSION:
The County is mandated to respond to the Grand Jury within 90 days from the date that reports are filed with the County Clerk and Elected Officials are mandated to respond within 60 days. To that end, attached is the County’s response to the San Mateo County’s Vehicle Fleet Management and Employee Vehicle Reimbursement Programs issued on July 6, 2010.
Acceptance of this report contributes to the Shared Vision 2025 outcome of a Collaborative Community by ensuring that all Grand Jury findings and recommendations are thoroughly reviewed by the appropriate County departments and that, when appropriate, process improvements are made to improve the quality and efficiency of services provided to the public and other agencies.
There is no Net County Cost associated with accepting this report.
San Mateo County’s Vehicle Fleet Management and Employee Vehicle Reimbursement Program
Grand Jury Finding Number 1a. San Mateo County department managers do not have an effective system to monitor fleet vehicle usage or mileage reimbursement. Department managers make decisions on use and assignment of vehicles without any documentation or surveys to support their conclusions.
Agree in part. County departments have discretion to determine their fleet needs in terms of the number and types of vehicles, i.e., light trucks, sedans, compacts, etc. Individual departments manage mileage reimbursement independently. The Public Works Department monitors fleet usage and condition through mileage reporting and scheduled vehicle maintenance. Vehicle mileage data is provided by Public Works to departments on a monthly basis.
Grand Jury Finding Number 1b. There is no process in place to track or analyze vehicle data or justify vehicle assignments, or having 53 vehicles on-call on a daily basis.
Disagree. Departmental overnight vehicle assignments are reviewed and approved by the County Managers Office annually based upon the needs identified by the requesting department. The Department of Public Works tracks vehicle mileage and maintenance. It is unclear from the report what additional data the Grand Jury feels should be monitored.
Grand Jury Finding Number 1c. Vehicles are assigned to departments and individuals within departments without provisions for other departments or individuals to use these vehicles.
Grand Jury Finding Number 1d. County vehicle maintenance costs have increased dramatically from $685 in 2004 to $1,452 in 2010.
Disagree. The 2004 cost of $685 per vehicle is believed to be strictly for the maintenance of the vehicle, which includes the average labor and materials costs per car per year associated with maintenance efforts. The 2010 figure, which actually represents data from FY 2008/09 of $1,452 per car, represents the fully loaded cost of each vehicle in the County fleet, including maintenance, overhead, fuel costs and money that is set aside for vehicle replacement. The FY 2008/09 vehicle maintenance cost, exclusive of overhead, fuel costs and money that is set aside for vehicle replacement is approximately $1,025 per car, which represents an annual programmatic cost increase of approximately 8% per year. Included in this calculation are fuel costs, which have far outpaced comparable cost indices.
Grand Jury Finding Number 1e. The County is currently spending $1.7 million more per year on assigned fleet vehicles than it would if all 556 assigned vehicle users were driving their own cars for County business and being reimbursed at the 2009 IRS rate of $.55 per mile.
Disagree. Staff has not been able to create a credible scenario that would allow the County to take advantage of the savings. First, the $1.7 million savings figure appears to have combined many types of vehicles together, including trucks, sedans, and sports utility vehicles, and then compared them to sedans. In order to avail $1.7 million in savings according to the calculation in the report, it would be necessary for all non-public safety County employees to drive to work, use their vehicles for County business, and be reimbursed at the IRS reimbursement rate of $0.55/mile. Further, it would require some employees to own trucks capable of working in off-road conditions. Furthermore, the County would need to require that all non-public safety employees own or have access to a motor vehicle as a condition of employment, which is unreasonable.
The County has made significant efforts to promote the use of public transit, carpooling, bicycling, and walking to work in lieu of commuting via single occupancy vehicles (SOV) for a variety of reasons, primarily overall transportation network congestion relief and reduction in countywide CO2 emissions. The County has 1492 participants in its Commute Alternatives Program and many others who voluntarily use alternate methods to get to work than SOVs. Requiring all employees to drive to work and use their own vehicles on County business would jeopardize the County’s ability to comply with AB 32 requirements and is unrealistic.
Grand Jury Finding Number 1f. Current motor pool vehicles are readily available; numerous fleet tracking and reservation technologies have been found by government agencies to significantly increase motor pool utilization.
Agree. However there is a cost to implement and maintain fleet tracking and reservation technologies and a cost to flexibly relocate vehicles among motor pool sites to meet on-site demands. Based on quotes from vendors, vehicle tracking and reservation systems cost several hundred thousand dollars per year for system hardware, software and maintenance, not including the cost of County staff time necessary to operate and monitor the systems. Our response to Recommendation 1 of the report provides that the County will assemble a committee to make policy recommendations on a variety of fleet management topics. This committee will also evaluate whether there is additional fleet management software that will be able to provide an overall programmatic and financial benefit.
Grand Jury Finding Number 2a. For non-motor pool, it is less expensive for the County to reimburse an employee at $.55 per mile (2009 rate) to use his/her own vehicle on County business than to supply the employee with a County owned vehicle. It should be noted that the County has policies in place to encourage the use of public transportation by County employees.
See response to 1e above.
Grand Jury Finding Number 2b. Department managers have no system in place to verify employees’ mileage and usage of their personal vehicles on County business.
Agree. Individual departments manage vehicle mileage reimbursements independently. The County will evaluate cost effective methods to verify mileage such as using Yahoo or Google maps to compare claimed mileage vs. calculated mileage.
Grand Jury Finding Number 2c. Department managers depend upon employees to use an “honor system” in recording their vehicle mileage and usage.
Grand Jury Finding Number 3a. The Board of Supervisors sets the vehicle allowance amounts and the County Manager determines which employees, in addition to himself and the Board of Supervisors, receive vehicle allowances.
Grand Jury Finding Number 3b. Vehicle allowances in San Mateo County are higher than in other nearby counties and are provided to a broader range of County employees.
Grand Jury Finding Number 3c. If an employee receives a vehicle allowance within the time period used for calculating his/her pension, it is included in the retirement calculation for his/her pension.
Grand Jury Finding Number 4a. There is a cost to the County in allowing its employees to drive County vehicles home overnight.
Agree. Overnight assignments are evaluated and approved based on need to minimize the cost to the County. For instance, authorized public safety personnel are permitted to take certain vehicles home overnight because specialized equipment is stored in the vehicles that is used during an emergency response. It is a cost of providing emergency response services to the community.
Grand Jury Finding Number 4b. The Sheriff’s Office has reduced the number of employees with overnight vehicle approvals from 64 to 36. This reduction is estimated by the Sheriff’s Office to save $150,000 per year.
Agree. The Sheriff's Office will continue to be pro-active in managing and monitoring our vehicle fleet operations and we appreciate the comprehensive review from the Grand Jury.
Grand Jury Finding Number 4c. The County Manager has final approval as to which employees are assigned overnight vehicles based on established criteria.
Grand Jury Finding Number 5a. The County has no system in place to ensure that employees driving their personal vehicles on County business have car insurance.
Grand Jury Finding Number 5b. The County requires employees to carry minimum car insurance as per California law.
Grand Jury Finding Number 5c. According to a County official, raising the minimum level of employee car insurance could discourage some employees from driving their own vehicles on County business.
Agree in part. Increasing the minimum levels could discourage some employees from driving, but it will also increase County costs since we would have to pay the employee’s portion of this new mandate if implemented.
Grand Jury Finding Number 5d. The use of overnight vehicles increases County liability.
Agree in part. The increased exposure to physical damage or liability from an auto claim is offset by readiness to respond to potential liability issues.
Grand Jury Finding Number 5e. The County holds in a self-insurance reserve $683 per vehicle per year. This is included in the vehicle mileage costs.
Grand Jury Finding Number 6a. San Mateo County’s Driving Policy lacks several provisions that may reduce County costs:
i. Setting limits on the mileage an employee may live from his/her duty station while driving an overnight vehicle.
ii. Requiring that all unattended vehicles be locked.
iii. Prohibiting employees from leaving compromising information (to both California residents and County departments), both written and electronic, in unattended vehicles.
iv. Prohibiting passengers in County vehicles unless they are being transported for County business.
The 2009-2010 San Mateo Civil Grand Jury recommends that the Board of Supervisors instruct the County Manager to:
1. Annually survey the vehicle fleet including assessing vehicle mileage, assignments, locations, and needs of the County. Recommend to the San Mateo Board of Supervisors which vehicles (assigned to individuals, departments, and the motor pool) should be reassigned or sold.
Agree. The recommendation has not been implemented but a thorough assessment is to be completed in 2011. Vehicle mileage is currently assessed annually. The County intends to appoint a committee consisting of representatives from the County Managers Office, Public Works, the Sheriff’s Office, Human Resources, and other vehicle user departments to develop policy on overall fleet size, fleet size by department, overnight assignments, mileage reimbursement, insurance requirements, and software needs. The recommendations of the committee will be brought to the Board of Supervisors for consideration. We expect the committee’s work to be completed and presented to the Board for its consideration in 2011.
2. Annually survey the assignments of overnight vehicles to determine if the assignments are in the best financial interest of the County.
Agree. See response to recommendation 1.
3. Determine a method of verifying actual mileage used by employees driving their personal vehicles on County business for vehicle reimbursement.
Agree. See response to recommendation 1.
4. Establish a mechanism to verify insurance coverage of County employees driving personal vehicles for County business.
Disagree. The recommendation will not be implemented because it is not reasonable that the County verify our employees are complying with this mandated State law. Risk Management considers the State law to be sufficient. The County relies on employees to comply with the law that mandates procuring and maintaining liability insurance just as employees are expected to follow all laws. The benefit that might accrue to the County is very low compared to the cost of administration, and the extra expense to employees.
5. Include in the San Mateo County Driving Policy verification that all employees who drive their personal vehicles on County business carry as a minimum the following: $25,000/$50,000 per accident injury and $5,000 per accident for property damages coverage. For their own protection, however, employees should be encouraged to obtain minimum insurance coverage of at least $100,000/$300,000/$50,000.
Disagree. The County would have to compensate employees for the increase in personal expenses to purchase a higher mandated limit. Any increase above State mandated levels should not be mandatory. Every employee’s situation is different and without a complete review of his or her situation it would not be prudent to require this change. Risk Management considers the State law to be sufficient. The County relies on employees to comply with the law that mandates procuring and maintaining liability insurance just as employees are expected follow all laws. The benefit that might accrue to the County is very low compared to the cost of administration, and the extra expense to employees.
6. Confirm that the County Driving Policy that requires employees to keep daily mileage and destination logs is being followed. Instruct department heads on how to maintain effective oversight on vehicle mileage and use.
Agree. The recommendation has not been implemented but will be implemented in the future. The County is changing our Supervisor and Managers training to instruct and enforce this responsibility. This will be implemented by the County’s Safety Officer by the first training of 2011.
7. Update the County Driving Policy:
a. Set limits on the mileage an employee may live from his/her duty station while driving an overnight vehicle.
b. Require that all unattended vehicles be locked.
c. Prohibit employees from leaving compromising information (to both California residents and County departments) both written and electronic in unattended vehicles.
d. Prohibit passengers in County vehicles unless they are being transported for County business.
7a. Disagree. This may unintentionally impose limits on how far an employee may live from their assigned workstation.
7b. Agree. The County will add this to the policy; however, it is largely unenforceable.
7c. Agree. The County will add this to the policy, however, the County believes that most employees already do this and there are several safeguards in place, including insurance, that provide coverage if certain types of information is stolen. Also, every laptop in the County is encrypted that would render the information useless without the password.
7d. Agree. The County will add this to the policy; however, it is largely unenforceable.
8. Eliminate assigning vehicles to departments (except patrol vehicles and vehicles with special equipment) or individuals and transfer these vehicles to the motor pool. Ensure that motor pool locations are optimally placed.
Disagree. The recommendation will not be implemented because it is not feasible or reasonable. The County has over 90 offices, clinics, and maintenance facilities spread across the entirety of San Mateo County. The option of providing more convenient motor pool locations at a low cost accessible to all field locations is not economically feasible and not possible.
9. Consider utilizing fleet management software.
Agree. The County does use fleet software to track vehicle mileage, vehicle maintenance schedules, vehicle replacement schedules, etc. The use of fleet software capable of tracking vehicle location and reservation assignments will be assessed as part of the committee’s work as stated in the response to recommendation 1.
Furthermore, the 2009-2010 San Mateo County Civil Grand Jury recommends that the Board of Supervisors:
1. Set the bi-weekly amount of the present car allowances to the average of the other four Bay Area counties.
The recommendation requires further analysis. There is not enough data in the Grand Jury Report regarding vehicle allowances to determine an exact average vehicle allowance of the four Bay Area counties. In order to determine an accurate average vehicle allowance, a detailed list of positions and the amount of vehicle allowance assigned to each position will be requested from San Francisco, Santa Clara, and Marin counties.
In addition, vehicle allowances are part of the total compensation package earned by certain employees in each County. An initial review of a small group of positions indicates that San Mateo’s total compensation packages are similar to the other counties. This indicates that although the vehicle allowances in some counties are lower than San Mateo, salaries and other benefits in the other counties are higher for comparable positions, which means that the total compensation packages are similar. To verify this initial finding, further analysis is needed. The analysis will be completed and submitted to the Board of Supervisors before December 10, 2010.
2. Limit the allowances to only elected officials and appointed department heads.
The recommendation requires further analysis. Again, total compensation must be considered when deciding whether or not to limit the allowances to only Elected Officials and appointed Department Heads. Further analysis related to whether or not Non-Elected Officials and Non-Department Heads in other counties earn similar total compensation packages than those in San Mateo County is necessary, before a final response can be submitted. The analysis will be completed and submitted to the Board of Supervisors before December 10, 2010.