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City of Troy's insourcing experience

Sam Lamerato
Fleet Maintenance Superintendent
City of Troy, Michigan
Member, APWA Fleet Services Committee

Several years ago a neighboring city approached the City of Troy with a request to repair one of their frontline fire apparatus. After the repair was complete, the City Manager and Director of Public Works from this neighboring city requested additional repairs be performed to their city fleet. They stated that they did not have the facility or the manpower to make such repairs and that sending their equipment/vehicles to an outside vendor was both costly and too time consuming. The City of Troy agreed to repair vehicles for this neighboring city on a cost and material basis. Today the City of Troy makes repairs to all their fire apparatus and specialty equipment (such as Vactors, snow removal equipment, Allison transmission repairs, etc.), as well as the removal and installation of all emergency lighting on their patrol cars.

Service Technician Matt Collins makes repairs to one of Medi-Go's senior citizens transportation vans. The repairs were completed without interrupting daily pickup or drop-off appointments. Since their service has been insourced, Medi-Go's ridership has increased dramatically.

With today's shrinking budgets and the downscaling or eliminating of fleet personnel, smaller municipalities are looking for an avenue to have their vehicles and equipment repaired. Word of the City's reputation of being an ASE Blue Seal shop, with quality repair work performed by certified technicians, spread and additional cities requested repair work be performed by the City. In the last six months, the City of Troy has been approached by city managers from cities located in the Detroit Metro area regarding repairs and new equipment installation (such as safety and emergency lighting) to their vehicles. We have met with them, discussed our fully-burdened shop rate, our markup on fuel and parts, and our hours of operation. The City operates a two-shift operation where equipment is dropped off at the end of the day and all attempts are made to repair the equipment for the following business day, reducing downtime and increasing productivity. After discussion, the interested parties have agreed to send their vehicles on an as-needed basis to the City for repairs and emergency equipment installations.

At the present time the City of Troy insources work from three outside cities, as well as a senior citizen transportation company, and is currently negotiating with two additional municipalities. We are working with one of our neighboring cities on a lease agreement where the City of Troy would purchase new vehicles/equipment and lease the vehicles/equipment at a set hourly rental fee, which would include all reasonable repairs, fuel, preventive maintenance, towing, and vehicle washes. Insourcing revenue for the budget year 2005/2006 is approximately $300,000.

Why Insourcing?

  • Outside revenue stream that lightens the burden on today's shrinking budgets
  • Assists smaller communities
  • Provides needed services
  • Quick turnaround
  • Improve department morale
  • Positive press
  • Mayor and Council recognition

Insourcing Needs:

  • Adequate facility size
  • Hours of operation
  • Trained staff of technicians
  • Diagnostic equipment
  • Competitive shop rate
  • Service level agreements
  • Specialty tools
  • Warranty language
  • Computerized fleet software
  • Adequate budget
  • Insurance (hold harmless clause)

What We Currently Insource:

  • Speedometer calibrations
  • Police radio and equipment install/removal
  • Allison transmission repairs
  • Fire apparatus repairs
  • Senior vehicle transportation vehicles
  • Police fatal vehicle investigations
  • Specialty heavy truck repair and service
  • Fuel
  • Provide total maintenance service
  • Overflow work for other cities

What Not To Do:

  • Increase staff size
  • Allow city-owned equipment to wait for repairs or PMs
  • Increase overtime
  • Overextend department budget

Drawbacks of Insourcing:

  • Warranty repairs
  • Specialty tools required
  • Additional training on non-city owned equipment
  • Strain on budget (if additional cities are added after budget approval)
  • Increased workload not only on the shop floor, but also on administration and clerical personnel

Sam Lamerato can be reached at (248) 524-3390 or lameratosp@ci.troy.mi.us.

Repairs being made to the City of Clawson's 5-7 yard dump truck. The front pump seal on the Allison automatic transmission was leaking during a winter snowstorm. The transmission was repaired by the afternoon shift and the truck was back in service the next day.