Insourcing for an additional revenue source

Charlie Caudill, II, CEM
Fleet Manager
City of Yuma, Arizona

Insourcing as an alternative to your regular revenue stream can, if applied correctly, provide agencies with revenue that can be used to overcome shortfalls in budget funding. Insourcing has to be looked at in different ways to make sure it is right for the organization that is attempting to do so. A list of insourcing could look like this:

A California Highway Patrol vehicle accessing the City of Yuma's 24-7 fuel site.

A) Provide Fueling Services for Outside Agencies: Fueling services is probably the easiest method of insourcing as far as any type of labor cost. Most organizations already have an automated fuel site in place, and providing fuel would only require additional reporting of which unit received the fuel and additional billing. The City of Yuma currently charges a surcharge to the fuel purchase cost which helps with budget costs associated with fuel system maintenance and billing costs.

B) Truck Wash: The City of Yuma Fleet Services has a 24-hour secured access yard, which has a truck wash onsite. This service could provide additional revenue from outside agencies which currently obtain fuel or other services from our department. With little additional labor and material cost, this revenue source can provide a good return on investment.

C) Preventive Maintenance Service: The City of Yuma Fleet Services currently has service contracts in place with several outside governmental agencies that we provide preventive maintenance services. This type of work will only work for the organization that has the manpower and facility resources to do the additional work without your internal customer base suffering.

A Humane Society vehicle being serviced. The City of Yuma Fleet Services provides full repairs and maintenance for the Humane Society through a service contract.

D) Full Service Repair Contracts: Service contracts of this type are negotiated with the outside customer individually to provide them and the city with the level of service that is both expected and able to be provided.

E) Overflow Work: Several neighboring cities and towns of the City of Yuma have contracted with Fleet Services to provide them with "as needed" repairs to vehicles and equipment when their own staff could not handle the task or for cost reasons. This is a great public relations tool when your agency can provide help to another agency when they need it.

Any of the mentioned types of work could realize untapped revenue if your organization is structured to handle it or if your internal customer base has suddenly shrunk due to a division being outsourced. These methods have been used by numerous organizations for many years successfully. Just remember that you need to use these methods with proper record keeping and service level agreements.

Charlie Caudill is a former member of the APWA Fleet Services Committee. He can be reached at (928) 373-4552 or charlie.caudill@ci.yuma.az.us.