REVIEW OF LIGHT FLEE
REVIEW OF LIGHT FLEET & HEAVY PLANT
21st November
T & HEAVY PLANT
November 2015
V1.02
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 1 of 131
Uniqco is a plant and vehicle management consulting business
offering innovative solutions for the
plant and vehicles. Our partnership approach works for the client
because the client is included in the process of determining the
most appropriate solution. We have clients in government and
agencies at a local, state and feder
contractors in the corporate sector.
Uniqco is headquartered in Australind, Western Australia and has personnel located in Perth,
Brisbane and Melbourne.
Uniqco is a client centric organisation
Under the charter, Uniqco shall:
1. Operate professionally at all times in an environment of integrity and honesty;
2. Only undertake work in areas of competency and when we have the capacity to deliver;
3. Strive to understand and meet our client’s expectations;
4. Provide a partnership approach with our client;
5. Provide value and value adding in our services;
6. Be innovative in our solutions;
7. Strive for knowledge transfer to our client through our reports and bureau
8. Ensure our market data is current to within 3 months;
9. Respond to the client within agreed timeframes and advise in advance of any unavoidable
delays and the reasons for any delay; and
10. Provide balanced recommendations that consider efficiency, cost
safety issues
Uniqco Declarations of Interest
Uniqco is a partner with the Institute of Public Works Engineering Australia in delivering plant &
vehicle management services and derives income from the online plant & vehicle
and the fleet management certificate.
Uniqco provides ongoing professional fleet management services to clients including reporting on key
performance indicators.
Review of Light Fleet & Heavy Plant
CONTENTS AMENDMENT R
Uniqco is a plant and vehicle management consulting business
offering innovative solutions for the operation and management of
plant and vehicles. Our partnership approach works for the client
because the client is included in the process of determining the
most appropriate solution. We have clients in government and
agencies at a local, state and federal level as well as civil contractors and resource enterprise
contractors in the corporate sector.
Uniqco is headquartered in Australind, Western Australia and has personnel located in Perth,
Uniqco is a client centric organisation that operates aligned to a “Client Services Charter”.
Operate professionally at all times in an environment of integrity and honesty;
Only undertake work in areas of competency and when we have the capacity to deliver;
ve to understand and meet our client’s expectations;
Provide a partnership approach with our client;
Provide value and value adding in our services;
Be innovative in our solutions;
Strive for knowledge transfer to our client through our reports and bureau
Ensure our market data is current to within 3 months;
Respond to the client within agreed timeframes and advise in advance of any unavoidable
delays and the reasons for any delay; and
Provide balanced recommendations that consider efficiency, cost, environmental impact and
Uniqco Declarations of Interest
niqco is a partner with the Institute of Public Works Engineering Australia in delivering plant &
vehicle management services and derives income from the online plant & vehicle
and the fleet management certificate.
Uniqco provides ongoing professional fleet management services to clients including reporting on key
CONTENTS AMENDMENT RECORD 2
al level as well as civil contractors and resource enterprise
Uniqco is headquartered in Australind, Western Australia and has personnel located in Perth,
that operates aligned to a “Client Services Charter”.
Operate professionally at all times in an environment of integrity and honesty;
Only undertake work in areas of competency and when we have the capacity to deliver;
Strive for knowledge transfer to our client through our reports and bureau service;
Respond to the client within agreed timeframes and advise in advance of any unavoidable
, environmental impact and
niqco is a partner with the Institute of Public Works Engineering Australia in delivering plant &
vehicle management services and derives income from the online plant & vehicle management tools
Uniqco provides ongoing professional fleet management services to clients including reporting on key
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 2 of 131
CONTENTS AMENDMENT RECORD 3
CONTENTS AMENDMENT RECORD
Document Title & Client Reference
Review of Light Fleet & Heavy Plant
Clarence Valley Council
Document Control
This document has been issued and amended as follows:
Rev Description Date Prepared by Reviewed by Authorised by
0.1 Draft for comment 28/10/15 RVM GA GA
0.2 Final comments 29/10/15 DDR GA GA
0.3 Issue to client 30/10/15 DDR GA GA
0.6 Draft for client review 3/11/2015 DDR RM GA
0.7 Draft following client meeting 16/11/2015 RM/GA DDR GA
1.0 Final for issue 18/11/2015 DDR GA GA
1-02 Revised Final 21/11/2015 GA RM GA
Copyright
Reports produced by Uniqco are intended for the exclusive use and benefit of the client. Any
distribution, copying, disclosure, dissemination, reproduction, or publication thereof without the written
consent of Uniqco is strictly prohibited and would constitute an infringement of copyright.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 3 of 131
CONTACT DETAILS 4
CONTACT DETAILS
If any further clarification is required as to the content of this report, please contact:
Company Name: Uniqco International Pty Ltd
Contact Name: Grant Andrews
Contact Position Title: Managing Director
Address PO Box A366
Australind WA 6233
Telephone: 0418 931 116
Fax: 08 9797 0729
Email: [email protected]
Date 20 November 2015
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 4 of 131
<TABLE OF CONTENTS - INDEX 5
TABLE OF CONTENTS - INDEX
CONTENTS AMENDMENT RECORD ................................................................................................... 3
CONTACT DETAILS .............................................................................................................................. 4
TABLE OF CONTENTS - INDEX ........................................................................................................... 5
BACKGROUND ...................................................................................................................................... 7
EXECUTIVE SUMMARY ........................................................................................................................ 8
OVERVIEW ............................................................................................................................................. 8
SUMMARY RECOMMENDATIONS ..................................................................................................... 10
1. LIGHT FLEET ............................................................................................................................... 18
1.1. KEY DELIVERABLES .................................................................................................................. 18
1.2. BACKGROUND .......................................................................................................................... 19
1.3. LIGHT FLEET INTELLIGENCE AND TRENDS .................................................................................. 19
1.4. LIGHT FLEET UTILISATION ......................................................................................................... 20
1.5. AVERAGE ANNUAL VEHICLE OPERATING COSTS ........................................................................ 23
1.6. ANNUAL HIRE CHARGES TO DEPARTMENTS FOR LIGHT FLEET .................................................... 25
1.7. OPTIMUM CHANGEOVER OF LIGHT FLEET .................................................................................. 27
1.8. OPTIMAL 10 YEAR LIGHT FLEET REPLACEMENT PROGRAM. ........................................................ 30
1.9. RISK MANAGEMENT IN LIGHT FLEET .......................................................................................... 30
1.10. FUEL OPTIONS ......................................................................................................................... 33
1.11. MAKE & MODEL SELECTION...................................................................................................... 35
1.12. VEHICLE OPTIONAL EXTRAS ..................................................................................................... 35
1.13. PRIVATE USE AND FRINGE BENEFITS TAX ................................................................................. 37
1.14. VEHICLE VALUES TO BE INCLUDED IN SALARY PACKAGES .......................................................... 46
1.15. OPTIONS FOR PROCURING COUNCIL OWNED LIGHT VEHICLES ................................................... 47
1.16. LIGHT FLEET FUNDING OPTIONS ............................................................................................... 47
1.17. OPTIONS FOR PROVISION OF VEHICLES (OTHER THAN COUNCIL OWNED OR LEASED) ................. 49
1.18. IMPROVED LIGHT FLEET REPORTING ......................................................................................... 53
1.19. TRAINING ................................................................................................................................. 54
1.20. ORGANISATIONAL REALIGNMENT OF FLEET & PLANT MANAGEMENT RESPONSIBILITY .................. 54
1.21. LIGHT FLEET SUMMARY ACTIONS.............................................................................................. 54
2. PLANT & HEAVY VEHICLES ...................................................................................................... 55
2.1. KEY DELIVERABLES .................................................................................................................. 55
2.2. HEAVY FLEET INTELLIGENCE AND TRENDS ................................................................................ 56
2.3. HEAVY FLEET REVIEW PROCESS .............................................................................................. 56
2.4. UTILISATION ............................................................................................................................. 57
2.5. OPTIMUM REPLACEMENT TIMING .............................................................................................. 62
2.6. WHOLE OF LIFE COST .............................................................................................................. 65
2.7. PLANT & HEAVY VEHICLES BEST PRACTICE .............................................................................. 70
3. MECHANICAL SERVICES ........................................................................................................... 71
3.1. KEY DELIVERABLES .................................................................................................................. 71
3.2. PROVISION OF MECHANICAL SERVICES ..................................................................................... 71
3.3. MAINTENANCE FAILURE RECORDS ............................................................................................ 73
3.4. DOWNTIME COST ..................................................................................................................... 74
3.5. SCHEDULED VERSUS UNSCHEDULED MAINTENANCE RATIO ....................................................... 75
3.6. MAINTENANCE STANDARDS AND SPECIFICATIONS ...................................................................... 76
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 5 of 131
<TABLE OF CONTENTS - INDEX 6
3.7. LABOUR FLAT RATES ............................................................................................................... 78
3.8. ESTIMATED MECHANICAL MAINTENANCE LABOUR REQUIREMENTS ............................................. 79
3.9. ANCILLARY EQUIPMENT AND MINOR PLANT ............................................................................... 82
3.10. MINIMISING RISK IN MECHANICAL MAINTENANCE ....................................................................... 84
3.11. CONTRACT MAINTENANCE ON NEW PLANT ................................................................................ 86
3.12. SERVICE LEVEL AGREEMENTS (SLA’S) ..................................................................................... 87
3.13. SUMMARY MECHANICAL WORKSHOP BEST PRACTICE ................................................................ 88
4. MANAGEMENT ............................................................................................................................ 89
4.1. INTRODUCTION ......................................................................................................................... 89
4.2. FLEET MANAGEMENT REPORTING ............................................................................................. 90
4.3. GPS ....................................................................................................................................... 92
4.4. GOVERNANCE IN FLEET ............................................................................................................ 93
4.5. PROCUREMENT – CATEGORY MANAGEMENT FLEET ................................................................... 94
4.6. TEN YEAR PLANT & VEHICLE REPLACEMENT PLAN (REFER SEPARATE XL SHEET)....................... 96
4.7. FUNDING THE PLANT & VEHICLE FLEET ..................................................................................... 97
4.8. MANAGEMENT RISK ISSUES ...................................................................................................... 98
4.9. FLEET MANAGEMENT – STRUCTURE, STAFF SKILLS AND KNOWLEDGE TRANSFER ..................... 101
4.10. PERFORMANCE ASSESSMENT CRITERIA .................................................................................. 102
4.11. IDENTIFICATION OF NEXT STEPS TO “ACTION” THE RECOMMENDATIONS ...................................... 102
4.12. ESTIMATED SAVINGS BY ADOPTING THE RECOMMENDATIONS .................................................... 104
APPENDIX 1 – VEHICLE COMPARISONS – BASED ON AVERAGE ANNUAL WHOLE OF LIFE
COSTS ................................................................................................................................................ 106
APPENDIX 2 – LIGHT VEHICLE FLEET ANALYSIS - SURVEY QUESTIONNAIRE TEMPLATE .. 109
APPENDIX 3 – FBT SAMPLE CALCULATIONS .............................................................................. 112
APPENDIX 4 - NEW PLANT/VEHICLE/EQUIPMENT PURCHASE – BUSINESS CASE TEMPLATE
115
APPENDIX 5 – OPTIMUM REPLACEMENT POINT CALCULATION – ROAD GRADER............... 118
APPENDIX 6 – GUIDELINES FOR THE CALCULATION OF INTERNAL HIRE RATES ................ 119
APPENDIX 7 - WHOLE OF LIFE COST CALCULATIONS ............................................................... 121
APPENDIX 8 – DRAFT SERVICE LEVEL AGREEMENT BETWEEN FLEET
MANAGEMENT/MECHANICAL SERVICES/END USERS ............................................................... 124
APPENDIX 9 – EXAMPLE FLEET REPORTING TO EXECUTIVE MANAGEMENT (SOURCE
UNIFLEET).......................................................................................................................................... 128
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 6 of 131
BACKGROUND 7
BACKGROUND
Vehicle and heavy plant assets represent a significant component of the cost of service delivery at
Clarence Valley Council. The present light fleet and heavy plant asset base consists of operational
work vehicles as well as cars that are part of employment packages and items of heavy plant used to
build Council infrastructure.
Some operational vehicles have included with them electrical gear, machinery and pumps, and are
not available for private use. Council staff that have a vehicle provided as part of their employment
package pay a leaseback fee of between $92 and $131 per week to cover private use. For the
2014/15 financial year council received $417,000 from light fleet vehicle leaseback fees. All running
costs associated with light fleet vehicles such as registration, insurance, fuel and maintenance are
covered by council, with the leaseback fee being set at a rate to cover the private component of
vehicle use.
It is intended that this review will provide support to the Council’s focus on long term organisational
financial sustainability and improved strategic capability. An integral part of this will be the
development of a light fleet and heavy plant asset base which is operationally justified and well
managed. To do this a review of Council’s light fleet and heavy plant asset base is necessary and
also whether Council is managing life-cycle costs, and actively reducing the environmental impact of
its light fleet and heavy plant asset base.
For Council’s light fleet and heavy plant asset base size and mix to be justified, the number and type
of vehicles and plant should reflect operational requirements. Too many or too few vehicles and plant
can create excessive costs. The cost of running these assets goes beyond the purchase price. It
includes insurance, registration and other life-cycle costs, such as fuel, maintenance, and accident
repair. To manage these costs, Councils should monitor and report on vehicle and plant usage and
costs, and use the information to improve the running of these assets accordingly.
In order for the review to be embraced, implemented and operated it must be based upon sound
operational and sustainability principles, be flexible and clearly understood by all who work with it.
This report on our fleet review for Clarence Valley Council is delivered in 4 parts:
1. Light Fleet
2. Heavy Fleet
3. Mechanical Maintenance
4. Management
The Asset Management Plan for fleet assets is provided in a separate report.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 7 of 131
EXECUTIVE SUMMARY 8
EXECUTIVE SUMMARY
Overview
Uniqco has substantial experience in delivering professional plant & vehicle management services
and we are confident from our past experience that implementation of our recommendations will result
in lower fleet operating costs.
1. There is a significant financial, OHS and regulatory risk in operating plant and vehicles and
systems must be in place to minimise those risks.
2. Fleet assets represent a significant capital investment and ongoing cost.
3. Apart from ensuring value for money is achieved from procurement and operational
performance, actively managing the plant and vehicle fleet is essential to delivering efficient
works and services.
4. Managing the mechanical plant and vehicle fleet requires accurate, reliable, timely, relevant
and quantifiable information. Such data are required to set charge-out rates, undertake needs
analysis and buy/hire assessments, develop maintenance programs, and set service and
works programs and budgets. Next to employment costs, the plant and vehicle fleet rates a
close second in determining total service and works costs in outside operations.
5. Procurement decisions need to be made on a best value assessment and be fully
documented.
6. Plant and vehicle management is a dynamic environment in which to work and is subject to
constant change. Keeping up to date with changing technology, markets and regulations is
very difficult for today’s operational managers.
7. A total life cycle ‘value for money’ approach is essential to assessing plant and fleet
requirements. Applying systematic analysis to the procurement, management and
maintenance of the plant and vehicle fleet will provide a foundation to maximise the return on
investment. This is difficult to achieve without effective fleet management reporting.
8. Plant and vehicle fleet items are capital goods. They need to be treated and accounted for in
a similar way to fixed capital assets, such as land and buildings. Investments in plant and fleet
form part of the strategies of an organisation focussed on maintaining, extending and
improving the delivery of works and services.
9. The investment in plant and fleet vehicles must be aimed at increasing the performance and
output potential of the operating areas of Council. Higher levels of efficiency are delivered
through increased productivity and optimising service delivery.
The recommendations in this review are aimed at addressing these business imperatives.
Although voluminous, the majority of the recommendations made in this report will have significant
impact on the organisation and should be relatively straightforward to implement at an operational
level.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 8 of 131
EXECUTIVE SUMMARY 9
The risk to the organisation will be in developing an aligned executive that recognises the value
provided at the operational level and the opportunity available to Clarence Valley in the successful
implementation of these recommendations.
In order to implement a sustainable change within Clarence Valley, we strongly advise:
1. The creation of a steering group to champion the change and provide regular updates to the
Executive Management Team and provide governance over the implementation.
2. Sequencing and prioritisation of the recommendations detailed in this report into an
implementation plan.
3. Establishment of a reporting framework for both the operational (plant and fleet) performance
/ compliance and the realisation of the benefits achieved from implementing these
recommendations.
4. Close liaison with finance to ensure accurate data provision and measurement of financial
outcomes.
We estimate that adoption of the recommendations of the report can deliver net savings of
between $400,000 to $600,000 per year plus significantly reduce risk.
We offer a service through Uniqco Operations to action the recommendations of the review and guide
Council through the improvement process. This will unlock the benefits of the review and provide the
critical management reporting needed to action the most critical recommendations. We have been
doing this successfully with clients over many years.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 9 of 131
SUMMARY RECOMMENDATIONS 10
SUMMARY RECOMMENDATIONS
The following recommendations are categorised by the level of:
1. Relative positive impact the recommendation will have on the organisation will benefit from
through the application of best practice ( High, Medium & Low)
2. The ease of implementing the recommendation based on Uniqco’s assessment of current
practices and organisational culture. ( Ease, Somewhat easy & Difficult)
Light Fleet Recommendations Impact to Organisation
Ease of Implementation
Average Annual Vehicle Operating Costs
1. Council adopts average annual costs to represent the
true cost of providing a fully maintained council vehicle.
Annual Hire Charges to Departments for Light Fleet
2. End user departments be charged an annual cost for
their allocated light vehicles based on full cost
recovery.
3. The funds generated by these charges, including
depreciation, be paid to Fleet to fully fund ongoing
operating and replacement costs.
Optimum Changeover of Light Fleet
4. Council adopts the optimum economic changeover of
light fleet vehicles (based on resale value, servicing
and maintenance costs, downtime costs and
changeover costs) of 5 years or 150,000km whichever
occurs first and subject to a risk assessment (at
150,000km and 200,000km) extending up to
250,000km for specialised vehicles such as the Toyota
Landcruiser.
5. Vehicles are not held beyond 5 years due to increasing
risk in terms of vehicle safety and breakdowns and
increasing maintenance costs.
6. Where vehicles exceed their warranty period, continue
to purchase roadside assistance from NRMA (or
similar) or the manufacturer of the vehicle.
Risk Management in Light Fleet
7. A balanced assessment with weighted criteria including
Annual Whole of Life Costs (including FBT & fuel
consumption), CO2 Emissions, Air Pollution Rating and
Safety be used in purchase decisions for light fleet
vehicles.
8. The following minimum standards be adopted:
a) ANCAP 5 star rating for passenger cars and 4
star rating for utilities.
b) Green vehicle star rating of 3.5 for passenger
cars and 2.5 for 4WD wagons, utilities & vans
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 10 of 131
SUMMARY RECOMMENDATIONS 11
Light Fleet Recommendations Impact to Organisation
Ease of Implementation
9. Where utilities are required for operational reasons,
passenger air bags, ABS braking and diesel fuel
(where available) be included in the standard vehicle
specification.
10. A Safe Driving Policy is adopted and distributed to all
employees required to drive a council vehicle with the
requirement that the employee sign off as having read
and understood the policy.
11. Consideration is given to staff undertaking the IPWEA
Online Safe Driving Program.
Vehicle Optional Extras
12. The following recommended accessories are included
in specifications for new vehicle purchases.
a) Recommended (for safety & resale value)
• Air Conditioning
• ONLY Light metallic paint
• Floor mats/ Mud flaps front & rear
• Passenger air bag where if not standard
• Cruise control (adaptive if available)
• ABS braking (Essential)
• Stability Control (where available as standard)
• Cargo barriers for station wagons/vans
• Central locking
• Auto adjustable rear mirrors
• Lane assist if available
• Reverse warning sensors or a reversing camera
where available as part of a standard package
b) Optional
• Headlight and bonnet protector
• Weather shield
c) Not Recommended (can detract from resale
value)
• Tow pack
• Dark colour duco (reduces resale value)
• Manual other than 4WD Utility
• Installation of solar tint to windows post
manufacture
• Bull bars (from a pedestrian safety perspective)
Private Use and Fringe Benefits Tax
13. Where light vehicles that attract FBT are used for a
substantial amount of work-related travel, Council
should use logbooks in accordance with Australian
Taxation Office guidelines to minimise FBT liability
noting that this will also provide invaluable information
on business use for managing the fleet.
14. For the purpose of FBT calculations Council note the
opportunity for low utilisation vehicles that are held for
5 years, to reduce the base value of a car by one-third
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 11 of 131
SUMMARY RECOMMENDATIONS 12
Light Fleet Recommendations Impact to Organisation
Ease of Implementation
in the FBT year that starts after the car has been
owned or leased for four years.
15. To further minimise FBT liability and light fleet
operating costs and to provide a greater incentive for
car pooling, Council consider a surcharge of 14
cents/km where private/commuter use exceeds 50% of
annual kilometres travelled.
Vehicle Values to be Included in Salary Packages
16. Light vehicle values be included in staff salary
packages
Own or Lease?
17. The Council continues to own rather than lease light
vehicles.
Car Allowance
18. Subject to the staff vehicle not being required for car
pool use the Council offer a Car Allowance option to
senior staff on the proviso that the employee must
provide their own vehicle for their business use without
any additional payments from Council.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 12 of 131
SUMMARY RECOMMENDATIONS 13
Heavy Fleet Recommendations Impact to Organisation
Ease of Implementation
Utilisation
19. Actual utilisation is regularly reported to management. 20. Consideration is given to:
a) Downsize a number of gravel haulage trucks and
loaders.
b) Extend the change-over of graders to
12yrs/10,000hrs subject to a risk assessment
beyond 8yrs/8,000hrs.
c) Dispose of a skid steer loader and increase the
utilisation of other such loaders with shared use.
d) A business case review to be undertaken for 2
rollers and 4 mowers identified in Table 16 of the
report.
21. A business case review is based on actual utilisation
(Kilometres or Engine Hours) and not on timesheet
hours.
22. External plant hire and hours on hire be recorded so
that plant can be identified as a cost by category and
as wet or dry hire to assist in future audits and any
business case analysis for retention/disposal/purchase
of plant.
Optimum Replacement Timing
23. The IPWEA optimum replacement benchmarks based
on a combination of age and utilisation are adopted.
24. Prior to holding an item beyond optimum replacement
an operating risk analysis is undertaken.
Whole of Life Cost
25. Internal hire rates are based on whole of life costs and
annual “budget” internal hire rates reflect full cost
recovery including the cost of replacement.
26. The proposed internal hire rates be adopted applied
either as an annual charge to the end user department
or recovered through time sheet hours.
27. A comparison is made between timesheet hours
against actual utilisation and regularly monitored to
ensure that any changes in actual utilisation must be
matched by a corresponding increase or decrease in
the timesheet hours.
28. To simplify administrative work whole of life costs be
recovered through an annual charge rather than hourly
rates for maintenance plant such as mowers.
29. Whole of life costs be used in purchasing decisions for
all items over $20,000.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 13 of 131
SUMMARY RECOMMENDATIONS 14
Mechanical Workshop Recommendations Impact to Organisation
Ease of Implementation
Maintenance Failure Records
30. Maintenance failures and the reasons for failures are
documented in a future management reporting system
by the mechanical service team.
Downtime Cost
31. Downtime is recorded on job cards to facilitate future
management reporting.
Scheduled to Unscheduled Maintenance Ratio
32. An overall scheduled to unscheduled maintenance
ratio of 70/30 be considered as a future KPI target
once a fleet management reporting capability is in
place.
Maintenance Standards and Specifications
33. The planned and preventative maintenance schedules
detailed in Table 19 of the report be adopted as a
minimum to reduce OH&S risk and downtime.
Labour Flat Rates
34. In the long term flat rate labour times are adopted for
standard servicing by internal and external service
providers.
Estimated Mechanical Maintenance Labour
Requirements
35. Council note the current level of mechanical resources
is appropriate to the size of the fleet and the challenges
of a rural environment.
36. A further resourcing assessment is undertaken 12
months following the implementation of the 2
workshops scenario.
37. Light fleet maintenance be outsourced for cars and
station wagons only. Because of operational demand
utilities continue to be serviced in house as these can
be completed when staff do not require the vehicle.
Ancillary and Minor Plant
38. A separate budget allocation is made for ancillary plant
and funds for this are recovered through an annual
charge to end users.
39. Ancillary plant and small items be subject to
accountability along the lines proposed in the report.
40. Each item of minor plant is serviced at least once every
12 months and checked for safety every 6 months by a
mechanic.
Minimising Risk in Mechanical Maintenance
41. In order to minimise risk the items listed in Section 3.9
of the report be included in processes and procedures.
42. Operational supervisors are reminded of their
responsibilities under OH&S laws to ensure staff are
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 14 of 131
SUMMARY RECOMMENDATIONS 15
Mechanical Workshop Recommendations Impact to Organisation
Ease of Implementation
adequately (and continuously) trained in the proper use
of plant/vehicles/equipment, noting that induction
training is required each time a new item of
plant/vehicle is introduced or the operator will use an
existing item for the first time.
Contract Maintenance
43. For new and replacement plant & vehicle purchases,
where practical a contract maintenance option be
included as part of the tender specification.
Service Level Agreements
44. Service level agreements are put in place with regular
external service providers when work is outsourced.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 15 of 131
SUMMARY RECOMMENDATIONS 16
Management Recommendations Impact to Organisation
Ease of Implementation
Fleet Management Reporting
45. Fleet management reporting is given a priority in order
to optimising plant & fleet utilisation, reducing fleet life
cycle costs and minimising financial and WHS risk.
46. Accurate records are maintained of the type and
amount of fuel issued, together with the plant number
and mileage or engine hours of the item receiving the
fuel including where items are refuelled from a bulk fuel
trailer/tanker in the field.
47. GPS units are only used to gather data to improve
productivity or improve the engine hour or mileage data
provided for remotely located assets
Governance in Fleet
48. The assessment criteria and methodology detailed in
the IPWEA best practice Plant & Vehicle Management
Manual be adopted for the analysis of tenders and
quotations.
49. Fleet Management and Procurement should jointly and
comprehensively document procedures that govern the
various steps in the procurement process under their
control. Such documentation should be extensively
used for training purposes and should be easily
accessible to staff who handle these functions.
50. It is a good practice to include supplier measurement
and monitoring in all contracts so that quality, price,
delivery and service level can be monitored.
51. All stages of the procurement process are fully
documented to ensure governance compliance.
Ten Year Plant & Heavy Vehicle Replacement Plan
52. The 10 year plant and heavy vehicle replacement
budget based on optimum replacement principles of
age and utilisation be adopted.
53. Rather than defer replacement, the Council lease
major items of the heavy fleet with predictable
utilisation such as graders, loaders, backhoes and
selected trucks if there is a shortage of capital.
Management Risk Issues
54. Council notes the increasing organisation
responsibilities as a result of the Heavy Vehicle
National Law (HVNL) and the Work Health and Safety
Act (2011).
Negative Impact
Fleet Management – Structure, Staff Skills and
Knowledge Transfer
55. Fleet management team needs to be autonomous and
able to report through a management structure directly
to the Executive Management Team.
56. Consideration is given to staff training and skills
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 16 of 131
SUMMARY RECOMMENDATIONS 17
Management Recommendations Impact to Organisation
Ease of Implementation
transfer needs identified in Section 4.9 of the report in
order to implement the recommendations of the fleet
management review.
Performance Assessment Criteria
57. Plant and heavy vehicle management assessment
criteria detailed in Table 24 of the report are
considered as providing a framework for further
development during implementation of the Fleet
Management Review.
Identification of next steps to “action” the
recommendations;
58. Establish a Steering Group to govern the
implementation of these recommendations.
59. Prioritise the recommendation aligned to Clarence
Valley corporate objectives.
60. Establish a reporting framework to measure operations and benefits related to the recommendations.
61. Establish close ties with Finance.
Coding Green Amber Red
Impact to Organisation High Impact Medium Impact Low Impact
Ease of Implementation Easy to implement Somewhat easy to
implement
Difficult to
implement
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 17 of 131
LIGHT FLEET 18
1. LIGHT FLEET
1.1. Key deliverables
A detailed review of Clarence Valley Council’s existing light fleet asset base identifying aspects and
areas where changes and improvements can occur.
The review is to:
• Identify the best options for possession of light fleet (i.e. purchase vs lease), and optimal
size of the asset base.
• Review Council policies, procedures and protocols related to light fleet.
• Examine light fleet age and utilisation against industry benchmarks, including:
o Cost of under utilisation
o Cost of vehicles travelling excess km’s
• Review current internal hire rates for light fleet and make recommendations for
improvements.
• Investigate value add opportunities:
o Process for optimising fleet utilisation
o Improved fleet and plant reporting
o Training
o Cost reduction opportunities
o Organisational realignment of fleet & plant management responsibility
o Detailed fleet and plant intelligence
o Trend data
o Improved risk management (covering issues related to environmental, safety and
social risks).
o Outsourcing options.
o Optimal 10 year light fleet replacement program.
• Disclose the impact of recommended changes to light fleet on Council’s ability to attract
and retain staff.
• Provide an Asset Management Plan for plant & fleet assets.
The report should also contain recommendations in relation to minimising whole of life costs, covering
the following areas:
• Asset replacement (including review of changeover processes and make
recommendations on model mix and optimum changeover – highlighting impacts of
deferring replacement)
• Calculation of depreciation
• Calculation of average annual costs (for use in cost comparisons, tender assessments
and vehicle costs included in employment packages).
• The value or otherwise of optional extras for light fleet.
• Various fuel options.
• FBT minimisation for light fleet.
• Purchasing, disposal and financing strategies.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 18 of 131
LIGHT FLEET 19
1.2. Background
The objective of the review is to identify opportunities to improve the efficiency of the
Fleet operation and ensure that vehicles are fit for purpose and appropriate to the
organisation’s needs.
Relevant light fleet documents provided by the Council for this review include:
• Protocol #16 for Reimbursement for Damage to Private Vehicles While on Council Business
• Light Fleet Weekly Plant Check/Report
• Motor Vehicle Commuter Use Agreement
• Vehicle Lease Agreement
• Pool Car Operations Procedure (Proposed)
• Motor Vehicle Management
KPI’s for Light Fleet for 2015/16 Frequency
Report to Manager & Director on % of variation
of actual usage v budgeted usage for light fleet
& small plant
Quarterly report due by end of proceeding month
– commence October 2015
Report to Manager & Director on % of variation
of actual expenditure v budgeted expenditure for
light fleet & small plant
Quarterly report due by end of proceeding month
– commence October 2015
Report to Manager & Director on % of variation
of actual replacement costs v budgeted
replacement costs for light fleet & small plant
Quarterly report due by end of proceeding month
– commence October 2015
5.2.9.15 - Implement new Fleet management
software within Works and Assets module December 2015
1.3. Light Fleet Intelligence and Trends
There have been significant changes in the light vehicle market since 2008 including:
• Far lower resale values driven by low cost Chinese manufactured vehicles now on the
market. These offer an attractive price entry option for people who would previously have
purchased second hand vehicle.
• The new vehicles available from the mainstream manufacturers being far more
technologically advanced and far more reliable
• The availability of extended warranties of up to 5 years becoming the norm.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 19 of 131
LIGHT FLEET 20
For the above reason the trend for light fleet replacement has been an extension to the optimum
replacement point. With few exceptions the modelling now shows the lowest cost changeover occurs
after 5 years/120,000km and this can be extended to 150,000km with little risk for all light vehicles.
Because of public perception regarding fuel economy, 4 Cylinder vehicles will continue to hold higher
resale values compared to 6 cylinder vehicles. The more 4 cylinder vehicles in the fleet the lower the
fleet costs should be.
Medium sized 4 cylinder vehicles are becoming more acceptable as people’s perception of the need
for a large car is challenged. Medium cars often have excellent leg room and reasonable luggage
capacity. By moving to medium sized cars overall costs can be reduced by as much as $3,000 per
car per year.
By purchasing 4 cylinder vehicles, fuel costs will be minimised, CO2 outputs minimised and whole of
life cost increases minimised because of higher resale values of low fuel consumption cars. Opting for
diesel fuel vehicles further enhances fuel and environmental savings.
1.4. Light Fleet Utilisation
The average annual utilisation of the 182 light vehicle fleet is 28,275 km which is well above the
national benchmark of 20,000 km.
The breakdown of average annual utilisation across each of the categories of vehicle use is also
above the benchmark. Operational vehicles show the lowest average annual usage and this would be
expected given they are purely used for operational use with no commuting component.
Table 1 – Average Annual Use by category
Vehicle by use Category Number Average Annual Utilisation
Operational 73 20,950
On Call (assume operational) 9 26,425
Commute 18 25,317
Lease Back 72 36,940
Pool 8 26,947
Not under leaseback 2 23,980
Fleet Total 182 28,275
Table 2 below shows a breakdown of the number of vehicles by category across a range of utilisation
brackets. As would be expected operational vehicles make up just over 80% of the vehicles travelling
on average less than 20,000 km/year.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 20 of 131
LIGHT FLEET 21
Table 2 – Average Annual Use Range by Category
Average Annual
Utilisation
Total Number
Breakdown by Category
Operational On-Call
Commute Lease Back
Pool N/A
<10,000 km 6 6 0 0 0 0 0
10,000 – 20,000 km
46 36 0 6 3 1 0
20,000 – 30,000 km
59 23 4 7 18 5 2
30,000 – 40,000 km
42 8 3 3 26 2 0
40,000 – 50,000 km
18 1 0 1 16 0 0
50,000 - 60,000 km
9 1 0 1 7 0 0
>60,000 km 2 0 0 0 2 0 0
Total 182 75 7 18 72 8 2
Only six (6) operational vehicles are travelling less than 10,000 km/year and based on their
application (to transport people and equipment to site) there is no concern regarding the lower level of
utilisation of these vehicles (refer Table 3).
One of the six (6) was identified as a pool vehicle in the survey and this could be subject to closer
review. Based on the light fleet survey and the fleet utilisation there appears to be little scope to
reduce the size of the asset base other than to remove vehicles by providing options for staff to
provide their own vehicle or cash out. These options are detailed in Section 1.16.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 21 of 131
LIGHT FLEET 22
Table 3 – Operational Vehicles with Average Annual Use < 10,000km
Rego # Make Model Application Purchase
Date
Average Annual
Utilisation Use
BW67DD Holden Colorado 4X4 D Cab 11/10/2013 6451 Pool?
Review use
BY90UR Holden Colorado LX Space Cab 22/05/2014 7521
Carries passengers/
Gear to site
CD02AQ Holden Colorado 4x4 S Cab 10/06/2015 8395
AI18LR Holden Rodeo Tipping Body
19/09/2006 8637
BR54VP Toyota Landcruiser 4x4 S Cab 26/09/2012 9630
AW20UY Holden Rodeo 4x4 S Cab 17/12/2008 9927
Cost of Under Utilisation
Underutilisation of the light vehicle fleet is not an issue for concern based on our analysis and given
all the vehicles are owned there is no cost penalty other than a component of the fixed costs including
depreciation.
Example using 20,000 km baseline utilisation and $3,500 average annual depreciation over 5
years
Depreciation per km = $3,500/20,000 = $0.175/km
If the vehicle doesn’t travel 20,000 km the lower utilisation costs 17.5c per Km below 20,000 Also
need to add other fixed costs of say $1,350 a year for rego/insurance.
Other fixed cost = $1,350/20,000) = $0.0657/Km below 20,000 km.
Total cost = $0.245/Km
For a vehicle travelling 10,000 km/yr the underutilisation cost is $2,425 annually.
Cost of Over Utilisation
At the other end of the utilisation spectrum, high utilisation associated with commuting (including
within lease back) comes at a high cost which needs to be identified as an employment cost rather
than a fleet cost. Annual charges to departments should reflect the true cost of each vehicle based on
utilisation and this principle forms the basis of our proposed internal hire rates (refer Section 1.6).
Part of the full cost is being recovered through lease back and commuting charges but these charges
do not reflect the amount of commuting or private use. It is accepted that the Council does not want to
limit its employees based on where they live. However, we believe that true costs should be identified
with the gap being funded as an “employment cost” rather than a fleet cost. Alternatively an additional
charge could be levied on staff for excess commuting/private use. This is discussed further in Section
1.13.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 22 of 131
LIGHT FLEET 23
Based on our work for other clients we find that leasing companies are charging $0.14/km for
utilisation that exceeds a lease agreement.
There is no obvious scope to reduce the size of the vehicle fleet based on utilisation other than one
operational vehicle allocated to pool use which needs further review.
1.5. Average Annual Vehicle Operating Costs
Uniqco uses a first principles methodology to calculate average annual costs over the life of the
vehicle (based on optimum changeover) and include; depreciation, fuel, repairs & maintenance, tyres
and FBT (does not apply to utilities if the vehicle is only used for commuting).
Average annual vehicle costs provide the full economic impact of various vehicle types and are a tool
that can be used:
• To provide a cost of vehicles included in employment packages
• To provide the annual charge out rate for full cost recovery
• As a comparison of costs between make/model of vehicles
• To assist in fleet mix selection
Adopting the total average annual cost for vehicle providing a council vehicle ensures the true value
can be shown in a salary package. This also enables comparisons with other options for providing
vehicles such as novated leasing.
True value can only be shown by an assessment for each individual based on their private and
commuting use.
Table 4 provides the average annual costs for a range of fleet vehicles travelling 30,000 km/yr over 5
years.
RECOMMENDATION
Average Annual Vehicle Operating Costs Impact to
Organisation Ease of
Implementation 1. Council adopts average annual costs to represent the
true cost of providing a fully maintained council vehicle.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 23 of 131
LIGHT FLEET 24
Table 4 - Average Annual Vehicle Costs (Based on 5 years / 150,000 kms (average 30,000
km/yr)
Vehicle Make/Model
Cy
lin
de
rs
Av
era
ge
A
nn
ua
l C
os
t
FB
T
An
nu
al
WO
L
Co
st
inc
lud
ing
FB
T
(5 y
rs /
1
50
,00
0 k
m)
AN
CA
P S
afe
ty
Ra
tin
g
Premium Executive
Honda Accord Euro 4 $9,543 $6,877 $16,420 5
Toyota Camry Atara SL 4 $9,554 $6,492 $16,046 5
Toyota Orion Presara 6 $11,077 $7,913 $18,990 5
VW Passat (Diesel) 4 $9,804 $7,899 $17,703 5
Executive
Toyota Camry Atara S 4 $8,875 $5,524 $14,399 5
Toyota Camry Hybrid 4 $7,888 $5,776 $13,664 5
Volkswagen Tiguan 4 $9,356 $7,266 $16,622 5
Subaru Liberty 4 $11,767 $7,225 $18,992 5
Holden Captiva SX 7ST(Diesel) 4 $10,295 $6,736 $17,031 5
VW Golf Comfortline (Diesel) 4 $7,500 $5,234 $12,734 5
Hyundai I40 Active 4 $7,793 $5,552 $13,345 5
Medium
Toyota Corolla 4 $6,953 $4,307 $11,260 5
Hyundai I30 SX Diesel 4 $6,791 $4,294 $11,085 5
Holden Cruz CDX - Petrol 4 $7,515 $4,573 $12,088 5
Small
Toyota Yaris 4 $5,862 $3,273 $9,135 5
VW TSI 61 Trend 4 $6,286 $3,977 $10,263 5
Ford Fiesta 4 $5,563 $3,271 $8,834 5
4 Wheel Drive Wagons
Nissan X Trail (Diesel) 4 $7,305 $5,581 $12,886 4
Subaru Forester (Petrol) 4 $6,870 $4,361 $11,231 5
Toyota Kluger (Petrol) GXL 7 Seat 6 $13,030 $9,371 $22,401 5
Holden Captiva CX 7ST (Diesel) 4 $10,295 $6,736 $17,031 5
Mitsubishi Pajero (Diesel) 4 $11,999 $10,841 $22,840 4
Station Wagon 4x2
Holden Captiva SX 7ST(Diesel) 4 $9,449 $6,022 $15,471 5
Ford Mondeo TDCi 4 $8,372 $5,440 $13,812 5
Toyota RAV 4 4 $9,177 $5,278 $14,455 5
Nissan X Trail ST 4 $8,024 $5,616 $13,640 5
Nissan Quashqai 4 $9,698 $5,872 $15,570 5
VW Golf Comfortline (Diesel) 4 $7,912 $6,270 $14,182 5
Utilities
Ford Ranger 4X2 (Dual Cab) (Diesel) 4 $6,676 $4,566 $11,242 5
Toyota Hilux SR (Dual cab) 4X2 (Petrol) 6 $7,962 $5,133 $13,095 5
Holden Colorado Crew Cab Utility 4X2 (Petrol) 6 $7,705 $4,564 $12,269 3
Utilities 4x4 Crew Cab
Ford Ranger XLT DT 4 $9,996 $6,985 $16,981 5
Holden Colorado LX RC DT 4 $9,652 $6,469 $16,121 5
Mitsubishi Triton GLX DT 4 $9,338 $6,205 $15,543 5
Toyota Hilux SR DT 4 $9,441 $7,014 $16,455 5
Isuzu D-MAX LS 4 $8,828 $6,418 $15,246 5
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 24 of 131
LIGHT FLEET 25
1.6. Annual Hire Charges to Departments for Light Fleet
Departments are currently charged an annual amount for each of their allocated vehicles. The amount
is based on the vehicle make/model. For example the charge for a Toyota RAV 4 is $12,630 and a
Holden Colorado is $18,815. Additional charges are applied for customisation such as flashing lights.
Our recommended methodology is to base charges to end user departments on the whole of life costs
for each vehicle and this takes into account the important variable of utilisation.
We have calculated the required annual charge out rate for each individual vehicle for full cost
recovery not including FBT. Refer XL sheet. The rate includes depreciation, fuel, tyres, scheduled
and an allowance for unscheduled maintenance. These are the charges that should be made to end
user department and be paid to Fleet to recover the cost of providing the fleet.
Table 5 provides a sample of the charge out rate calculations and comparison to the Council’s
current charges. There are some gaps in the vehicle data which preclude a comparison of the total
variation between the current and proposed charges. There may not be a great difference between
the total being recovered overall but there are some substantial variations with individual vehicles as a
result of applying the true cost methodology.
FBT is currently largely recovered from charges directly to staff based on the benefit received.
RECOMMENDATION
Annual Hire Charges to Departments for Light Fleet Impact to
Organisation Ease of
Implementation 2. End user departments be charged an annual cost for
their allocated light vehicles based on full cost
recovery.
3. The funds generated by these charges, including
depreciation, be paid to Fleet to fully fund ongoing
operating and replacement costs.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 25 of 131
Table 5 – Sample Hire Rate Comparison
Item Data
Fle
et
#
Po
sit
ion
Ma
ke
Mo
de
l
00010105 Director
Corporate Toyota Rav4
00010205 Building
Inspector Toyota Hilux
00010306 Works
Engineer West Toyota Rav4
00010404 Coordinator
CSS Toyota Rav4
00010505 Building
Surveyor G12 Toyota Rav4 GX
00010604 Sen Econ Dev
officer Toyota Rav4
00010805 Technical
officer desig Holden Colorado
00010907 Supervisor Rural West
Holden Colorado
00011105 Rangers Assistant
Holden Colorado 4x4 Dual
Cab COMMUTE
00011205 Man OPAG Holden Commodore
00011302 Waste
Services Supervisor
Mitsubishi Triton OPERATE
Review of Light Fleet & Heavy Plant
LIGHT FLEET 26
Calculated Hire Rate Schedule
Ma
in U
se
Av
era
ge
An
nu
al
Uti
lis
ati
on
De
pre
cia
tio
n
Fu
el
co
st
Ty
re C
os
t
Ma
inte
na
nce
co
st
LEASEB 40,173 7,030 5,785 803 904
LEASEB 47,893 8,381 8,276 958 1,078
LEASEB 47,583 8,327 6,852 952 1,071
POOL 19,628 3,500 2,826 393 442
LEASEB 39,950 6,991 5,753 799 899
LEASEB 36,776 6,436 5,296 736 827
LEASEB 43,377 7,591 7,496 868 976
LEASEB 58,938 10,314 10,185 1,179 1,326
COMMUTE 33,383 5,842 5,769 668 751
LEASEB 57,306 10,029 9,077 1,146 1,289
OPERATE 12229 3,500 2,289 245 275
Calculated Hire Rate Schedule Comparison to
Current
Un
sc
he
du
led
M
ain
ten
an
ce
co
st
Ca
lcu
late
d A
nn
ua
l H
ire
co
st
wit
ho
ut
FB
T
Cu
rre
nt
An
nu
al
Ch
arg
e
Va
ria
tio
n
136 14,658 12,630 2,028
162 18,854 18,815 39
161 17,362 12,630 4,732
66 7,227 12,630 -5,403
135 14,577 12,630 1,947
124 13,419 12,630 789
146 17,076 18,815 -1,739
199 23,203 18,815 4,388
113 13,142 19,464 -6,322
193 21,735 12,630 9,105
41 6,350 18,815 -12,465
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 26 of 131
0
20000
40000
60000
80000
100000
Year 1Year 2Year 3Year 4Year 5
$
Years
1.7. Optimum Changeover of Light Fleet
To deliver lowest cost light fleet the decision of when to change over the light fleet should be based
on optimum replacement timing.
best estimate the optimum timing, in kilometres and time, to achieve the lowest average annual cost
during the life of the vehicle.
What drives replacement timing today?
Replacement timing today is driven by more than just cost and considerations include:
• Resale Value
• Technology
• Repairs and maintenance
• WHS Risk (Safety)
• Environmental footprint
• FBT
There are also the human factors
• Vested interests of staff
• Attraction & retention driven
We are finding that the latter is limiting the extent of savings that can be achieved in local
government.
Our focus in this section is what can be achieved if lowest cost is the outcome sought.
Actual depreciation figures will show t
is immediately post purchase. The second drop is prior to a major component overhaul, which is
when second hand buyers are aware of a large impending maintenance bill. (Refer
which is provided for demonstration purposes only)
Figure 1 Optimum Changeover
Review of Light Fleet & Heavy Plant
LIGHT FLEET
Year 5Year 6Year 7Year 8
Optimum Changeover of Light Fleet
To deliver lowest cost light fleet the decision of when to change over the light fleet should be based
on optimum replacement timing. The optimum replacement timing (point) for a vehicle is calculated to
best estimate the optimum timing, in kilometres and time, to achieve the lowest average annual cost
What drives replacement timing today?
ing today is driven by more than just cost and considerations include:
Repairs and maintenance
There are also the human factors
Attraction & retention driven by HR departments.
We are finding that the latter is limiting the extent of savings that can be achieved in local
Our focus in this section is what can be achieved if lowest cost is the outcome sought.
Actual depreciation figures will show two distinct steep drops in resale value. The first significant drop
is immediately post purchase. The second drop is prior to a major component overhaul, which is
when second hand buyers are aware of a large impending maintenance bill. (Refer
which is provided for demonstration purposes only)
Optimum Changeover (Sample only)
Green Line (Maintenance/Downtime cost
curve)
White Line (Depreciation curve)
Red Line (Average Cost curve)
LIGHT FLEET 27
To deliver lowest cost light fleet the decision of when to change over the light fleet should be based
The optimum replacement timing (point) for a vehicle is calculated to
best estimate the optimum timing, in kilometres and time, to achieve the lowest average annual cost
ing today is driven by more than just cost and considerations include:
We are finding that the latter is limiting the extent of savings that can be achieved in local
Our focus in this section is what can be achieved if lowest cost is the outcome sought.
wo distinct steep drops in resale value. The first significant drop
is immediately post purchase. The second drop is prior to a major component overhaul, which is
when second hand buyers are aware of a large impending maintenance bill. (Refer Figure 1 below
(Maintenance/Downtime cost
White Line (Depreciation curve)
(Average Cost curve)
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 27 of 131
The optimum replacement point in the life of the vehicle is near the lowest point on the average cost
curve which is near when the decreasing line of depreciation intersects with the increasing cost of
repairs and maintenance costs. Utilisation (kilometres
changeover.
The Council’s current light vehicle policy is to change the fleet at 80,000km for cars and 120,000km
for utilities.
This sits well in comparison to other councils based on a recent IPWEA ligh
July 2015 which involved 100 plus respondents.
Figure 2 - IPWEA Survey July 2015
Replacement based on years
Only 20% of participants are changing their
vehicles at 5 years or more.
The Light Vehicle comparison charts in
available on the IPWEA website. The average annual costs of up to 10 vehicles can be compared in a
single chart. The charts also provide a guide to the optimum changeover year of each vehicle which is
generally the year of lowest whole of life cost. The charts are drawn from an extensive data base of
vehicles where whole of life costs are updated quarterly.
Visit www.ipwea.org/fleet for access to the model and other online fleet management tools. Access is
available on an annual subscription basis. Please note Uniqco is a partner with IPWEA in delivering
this service and derives income from subscriptions and the help desk service.
The charts show the average annual cost comparisons of different vehicles based on whole of life
costs with changeover at 1, 2, 3, 4 & 5 years based on average annual utilisation of 20,000km. With
few exceptions the model shows the lowest cost changeover occurs after 5 years for all vehicles in
the 4 & 6 cylinder range. There is little to no risk in extending the change point for vehicles to
150,000km and for specialised vehicles such as the Toyota Landcru
replace at 5 years but extend the kilometres to 250,000 to obtain full value from the vehicle
extension being subject to a risk assessment at 150,000km and again at 200,000km
New release models will initially show a lowe
Review of Light Fleet & Heavy Plant
LIGHT FLEET
The optimum replacement point in the life of the vehicle is near the lowest point on the average cost
curve which is near when the decreasing line of depreciation intersects with the increasing cost of
Utilisation (kilometres travelled) is an important consideration in fleet
’s current light vehicle policy is to change the fleet at 80,000km for cars and 120,000km
This sits well in comparison to other councils based on a recent IPWEA light fleet survey conducted in
July 2015 which involved 100 plus respondents.
IPWEA Survey July 2015
Replacement based on utilisation
Only 20% of participants are changing their Only 24% are changing at 120,000km or
more.
The Light Vehicle comparison charts in Appendix 1 are generated from the light fleet selection model
available on the IPWEA website. The average annual costs of up to 10 vehicles can be compared in a
harts also provide a guide to the optimum changeover year of each vehicle which is
generally the year of lowest whole of life cost. The charts are drawn from an extensive data base of
vehicles where whole of life costs are updated quarterly.
for access to the model and other online fleet management tools. Access is
available on an annual subscription basis. Please note Uniqco is a partner with IPWEA in delivering
ncome from subscriptions and the help desk service.
The charts show the average annual cost comparisons of different vehicles based on whole of life
costs with changeover at 1, 2, 3, 4 & 5 years based on average annual utilisation of 20,000km. With
eptions the model shows the lowest cost changeover occurs after 5 years for all vehicles in
the 4 & 6 cylinder range. There is little to no risk in extending the change point for vehicles to
150,000km and for specialised vehicles such as the Toyota Landcruiser our recommendation is to
replace at 5 years but extend the kilometres to 250,000 to obtain full value from the vehicle
subject to a risk assessment at 150,000km and again at 200,000km
New release models will initially show a lower whole of life cost in year 1 but this should be ignored.
LIGHT FLEET 28
The optimum replacement point in the life of the vehicle is near the lowest point on the average cost
curve which is near when the decreasing line of depreciation intersects with the increasing cost of
travelled) is an important consideration in fleet
’s current light vehicle policy is to change the fleet at 80,000km for cars and 120,000km
t fleet survey conducted in
Replacement based on utilisation
are changing at 120,000km or
are generated from the light fleet selection model
available on the IPWEA website. The average annual costs of up to 10 vehicles can be compared in a
harts also provide a guide to the optimum changeover year of each vehicle which is
generally the year of lowest whole of life cost. The charts are drawn from an extensive data base of
for access to the model and other online fleet management tools. Access is
available on an annual subscription basis. Please note Uniqco is a partner with IPWEA in delivering
The charts show the average annual cost comparisons of different vehicles based on whole of life
costs with changeover at 1, 2, 3, 4 & 5 years based on average annual utilisation of 20,000km. With
eptions the model shows the lowest cost changeover occurs after 5 years for all vehicles in
the 4 & 6 cylinder range. There is little to no risk in extending the change point for vehicles to
iser our recommendation is to
replace at 5 years but extend the kilometres to 250,000 to obtain full value from the vehicle. The
subject to a risk assessment at 150,000km and again at 200,000km.
r whole of life cost in year 1 but this should be ignored.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 28 of 131
RECOMMENDATION
Optimum Changeover of Light Fleet
4. Council adopts the optimum economic changeover of
light fleet vehicles (based on resale value, servicing
and maintenance costs, downtime costs and
changeover costs) of 5 years or 150,000km whichever
occurs first and subject to a risk assessment (at
150,000km and 200,000km)
250,000km for specialised vehicles such as the Toyota
Landcruiser.
5. Vehicles are not held beyond 5 years due to increasing
risk in terms of vehicle safety and breakdowns and
increasing maintenance costs.
6. Where vehicles exceed their warranty period, continue
to purchase roadside assistance from NRMA (or
similar) or the manufacturer of the vehicle.
Review of Light Fleet & Heavy Plant
LIGHT FLEET
Optimum Changeover of Light Fleet Impact to
Organisation Council adopts the optimum economic changeover of
light fleet vehicles (based on resale value, servicing
and maintenance costs, downtime costs and
changeover costs) of 5 years or 150,000km whichever
subject to a risk assessment (at
km and 200,000km) extending up to
250,000km for specialised vehicles such as the Toyota
beyond 5 years due to increasing
risk in terms of vehicle safety and breakdowns and
increasing maintenance costs.
s exceed their warranty period, continue
to purchase roadside assistance from NRMA (or
similar) or the manufacturer of the vehicle.
LIGHT FLEET 29
Ease of Implementation
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 29 of 131
1.8. Optimal 10 year Light Fleet Replacement Program.
Our draft 10 year plan is based on the optimum replacement recommendations of 5yr/150,000km’s.
The table below shows a summary of the expected net annual expenditure with an average annual
funding requirement of $865,622.
Table 6 - 10 Year Light Vehicle R
Variation to the Current 10 Year Plan
Year
1 2015/16
2 2016/17
3 2017/18
4 2018/19
5 2019/20
6 2020/21
7 2021/22
8 2022/23
9 2023/24
10 2024/25
Total Estimated Savings over 10 Years
Refer XL sheet for details of individual vehicles.
The 10 year plan is based on like for like vehicles with a best value assessment of make/model
options at the time of replacement using the IPWEA Light Fleet Selection Model.
1.9. Risk Management in Light Fleet
There are 2 elements of risk assessed in this section. Firstly Purchase (financial) risk and secondly
WHS risk.
Purchase Risk
Purchase decisions at CVC are currently driven by a combination of operational needs and safety but
there is no weighted methodology for decision making. Where possible an ANCAP 5 star rating is
selected but this is not always possible with some operational needs.
Cost and fit for purpose are not the only considerations in the purchase decision with most local
governments now placing a greater emphasis on safety and many also including environmental
impact of the fleet. The latter addressing the organisations social obligat
Some of our clients are stipulating Green Vehicle star ratings rather than CO
vehicle star rating is based on the sum of the air pollution and greenhouse ratings. Equal weighting is
given to both these ratings to arrive at a combined GVG rating (out of 20), which then is translated
into the star rating. Clarence Valley is not currently considering Green Vehicle Star Ratings.
One of the prime problems in trying to protect the environment is the public perception
changing vehicles to an alternative fuel can potentially “save” the environment. The negative impact
Review of Light Fleet & Heavy Plant
LIGHT FLEET
Optimal 10 year Light Fleet Replacement Program.
Our draft 10 year plan is based on the optimum replacement recommendations of 5yr/150,000km’s.
The table below shows a summary of the expected net annual expenditure with an average annual
funding requirement of $865,622.
10 Year Light Vehicle Replacement Summary Funding Requirement
Variation to the Current 10 Year Plan
Net Replacement Cost (Uniqco 10
Year Plan)
Current 10 Year Plan
$555,739 $1,005,865 $450,126
$680,006 $1,285,572 $605,512
$1,282,587 $1,034,374 $248,123
$1,041,571 $1,378,950 $337,379
$766,298 $849,945 $83,647
$791,212 $1,171,016 $379,804
$753,759 $1,113,277 $359,518
$1,069,074 $1,228,671 $159,597
$1,035,948 $561,763 $474,185
$831,237 $1,143,025 $311,788
Total Estimated Savings over 10 Years $1,964,973
Refer XL sheet for details of individual vehicles.
The 10 year plan is based on like for like vehicles with a best value assessment of make/model
options at the time of replacement using the IPWEA Light Fleet Selection Model.
Risk Management in Light Fleet
There are 2 elements of risk assessed in this section. Firstly Purchase (financial) risk and secondly
s at CVC are currently driven by a combination of operational needs and safety but
there is no weighted methodology for decision making. Where possible an ANCAP 5 star rating is
selected but this is not always possible with some operational needs.
fit for purpose are not the only considerations in the purchase decision with most local
governments now placing a greater emphasis on safety and many also including environmental
impact of the fleet. The latter addressing the organisations social obligations to the community.
Some of our clients are stipulating Green Vehicle star ratings rather than CO2 emissions. The green
vehicle star rating is based on the sum of the air pollution and greenhouse ratings. Equal weighting is
to arrive at a combined GVG rating (out of 20), which then is translated
into the star rating. Clarence Valley is not currently considering Green Vehicle Star Ratings.
One of the prime problems in trying to protect the environment is the public perception
changing vehicles to an alternative fuel can potentially “save” the environment. The negative impact
LIGHT FLEET 30
Our draft 10 year plan is based on the optimum replacement recommendations of 5yr/150,000km’s.
The table below shows a summary of the expected net annual expenditure with an average annual
eplacement Summary Funding Requirement Showing
Variation
450,126
605,512
248,123
337,379
83,647
379,804
359,518
159,597
474,185
311,788
1,964,973
The 10 year plan is based on like for like vehicles with a best value assessment of make/model
There are 2 elements of risk assessed in this section. Firstly Purchase (financial) risk and secondly
s at CVC are currently driven by a combination of operational needs and safety but
there is no weighted methodology for decision making. Where possible an ANCAP 5 star rating is
fit for purpose are not the only considerations in the purchase decision with most local
governments now placing a greater emphasis on safety and many also including environmental
ions to the community.
emissions. The green
vehicle star rating is based on the sum of the air pollution and greenhouse ratings. Equal weighting is
to arrive at a combined GVG rating (out of 20), which then is translated
into the star rating. Clarence Valley is not currently considering Green Vehicle Star Ratings.
One of the prime problems in trying to protect the environment is the public perception that simply
changing vehicles to an alternative fuel can potentially “save” the environment. The negative impact
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 30 of 131
on the environment from motor vehicles is not only from CO
such as total hydro carbons (THC), oxides of
Evaluation of the environmental impact of light vehicles should involve a balanced decision making
process based on a number of contributing criteria which should include: Annual Whole of Life Costs,
CO2 Emissions, Air Pollution Rating and Safety (ANCAP rating). Fuel consumption is included within
the whole of life costs and CO2 Emission assessment and should not be considered in isolation. Our
recommended methodology provides the opportunity to also appl
with whole of life costs.
We recommend future purchase decisions be based primarily on
together with minimum ANCAP safety and Green Guide Ratings.
Table 7 Weighting Factors in Purchase Decisions
Criteria
Annual Whole of Life Costs (including FBT & fuel consumption)
CO2 Emissions
Air Pollution Rating
Safety
Local purchase preference
Note: Fuel consumption is included within the whole of life costs and CO
be considered in isolation. Weightings can be varied to suite the Council’s safety and environmental objectives
The IPWEA light fleet model comparison charts allows the user
annual whole of life costs, CO2 emissions, air pollution rating and safety and provides a total score for
each vehicle. Scores can then be compared. Fuel consumption is included within the whole of life
costs and CO2 emission assessment and should not be considered in isolation. The output table for
the above weightings for the vehicles selected for the charts is shown in
chart.
The charts themselves compare whole of life costs (including estimated
optimum replacement timing for each vehicle. The table below each chart shows the weighted
analysis data.
Choice of Fleet Vehicles
CVC staff has done an excellent job of vehicle make/model selection and our only recommendation
for change is that fleet vehicle selection includes environmental considerations. The recommended
criteria being:
• Vehicles that are fit for the use/application proposed;
• Lowest whole of life costs;
• Safety with minimum ANCAP rating of 5 where possible;
• Environmental considerations with minimum Green Guide ratings.
Review of Light Fleet & Heavy Plant
LIGHT FLEET
on the environment from motor vehicles is not only from CO2 but also the other noxious substances
such as total hydro carbons (THC), oxides of nitrogen (NOx) and diesel particulate matter (PM).
Evaluation of the environmental impact of light vehicles should involve a balanced decision making
process based on a number of contributing criteria which should include: Annual Whole of Life Costs,
Emissions, Air Pollution Rating and Safety (ANCAP rating). Fuel consumption is included within
Emission assessment and should not be considered in isolation. Our
recommended methodology provides the opportunity to also apply weightings to these factors along
We recommend future purchase decisions be based primarily on 4 weighted criteria shown in
together with minimum ANCAP safety and Green Guide Ratings.
7 Weighting Factors in Purchase Decisions
Criteria Suggested Weighting (%)
Annual Whole of Life Costs (including FBT & fuel consumption)
included within the whole of life costs and CO2 Emission assessment and should not
be considered in isolation. Weightings can be varied to suite the Council’s safety and environmental objectives
The IPWEA light fleet model comparison charts allows the user to apply their own weightings to
emissions, air pollution rating and safety and provides a total score for
each vehicle. Scores can then be compared. Fuel consumption is included within the whole of life
ion assessment and should not be considered in isolation. The output table for
the above weightings for the vehicles selected for the charts is shown in Appendix 1
The charts themselves compare whole of life costs (including estimated residual values) and the
optimum replacement timing for each vehicle. The table below each chart shows the weighted
CVC staff has done an excellent job of vehicle make/model selection and our only recommendation
change is that fleet vehicle selection includes environmental considerations. The recommended
Vehicles that are fit for the use/application proposed;
Safety with minimum ANCAP rating of 5 where possible;
Environmental considerations with minimum Green Guide ratings.
LIGHT FLEET 31
but also the other noxious substances
nitrogen (NOx) and diesel particulate matter (PM).
Evaluation of the environmental impact of light vehicles should involve a balanced decision making
process based on a number of contributing criteria which should include: Annual Whole of Life Costs,
Emissions, Air Pollution Rating and Safety (ANCAP rating). Fuel consumption is included within
Emission assessment and should not be considered in isolation. Our
y weightings to these factors along
4 weighted criteria shown in Table 7
Suggested Weighting (%)
70
5
5
5
15
Emission assessment and should not
be considered in isolation. Weightings can be varied to suite the Council’s safety and environmental objectives
to apply their own weightings to
emissions, air pollution rating and safety and provides a total score for
each vehicle. Scores can then be compared. Fuel consumption is included within the whole of life
ion assessment and should not be considered in isolation. The output table for
Appendix 1 below each
residual values) and the
optimum replacement timing for each vehicle. The table below each chart shows the weighted
CVC staff has done an excellent job of vehicle make/model selection and our only recommendation
change is that fleet vehicle selection includes environmental considerations. The recommended
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 31 of 131
We recommend the IPWEA Light Fleet Selection Model is used prior to making a new purchase to
ensure up to date information is being used in the purchase decision. Visit
access to the model and other online fleet management tools. Online Videos demonstrate how to use
the tools.
RECOMMENDATION
Risk Management in Light Fleet
7. A balanced assessment with weighted criteria including
Annual Whole of Life Costs (including FBT & fuel
consumption), CO2 Emissions, Air Pollution Rating and
Safety be used in purchase decisions for light fleet
vehicles.
8. The following minimum standards be adopted:
a) ANCAP 5 star rating for passenger cars and 4
star rating for utilities.
b) Green vehicle star rating of 3.5 for passenger
cars and 2.5 for 4WD wagons, utilities & vans
9. Where utilities are required for operational reasons,
passenger air bags, ABS braking and diesel fuel
(where available) be included in the standard vehicle
specification.
WHS Risk
In our experience few organisations are aware of the Work, Health & Safety Risk associated with staff
driving company vehicles and the only requirement is a current driver’s licence. This risk can be
mitigated through driver training.
7 out of 10 companies do not have a ‘motor vehicle’ policy or at least the employees are unaware of
the policy. Whether there is a policy or not an organisation is at risk of failing to ensure an employee
who is required to drive/operate their vehicles (or plant) on the road has the necessary skills. A
sample policy is available from IPWEA.
Research published in the National
reported that, 90% of all incidents and collisions are caused by driver actions (decision making),
which are expressions of their behaviour, attitude and personal choices, not their inability to dri
The IPWEA ‘On-Line’ Diver Training Program, is a road safety initiative designed to improve driver
skills. It allows drivers to participate at their own pace in their own time. Once enrolled a participant
has 12 months unlimited access to up to 24 dr
By focusing on a targeted and methodical approach to driver education the organisation is able to
understand the risk and mitigate the risk and the online driver training can highlight policies.
The advantages of undertaking driver a
limited to: -
• 90% of Driving incidents are decision based
• Continuous awareness changes driver behaviour
• Skills based driver training if not practiced deteriorates over time
Review of Light Fleet & Heavy Plant
LIGHT FLEET
We recommend the IPWEA Light Fleet Selection Model is used prior to making a new purchase to
ensure up to date information is being used in the purchase decision. Visit www.ipwea.org/fleet
access to the model and other online fleet management tools. Online Videos demonstrate how to use
Risk Management in Light Fleet Impact to Organisation
sessment with weighted criteria including
Annual Whole of Life Costs (including FBT & fuel
consumption), CO2 Emissions, Air Pollution Rating and
Safety be used in purchase decisions for light fleet
The following minimum standards be adopted:
ANCAP 5 star rating for passenger cars and 4
star rating for utilities.
Green vehicle star rating of 3.5 for passenger
cars and 2.5 for 4WD wagons, utilities & vans.
Where utilities are required for operational reasons,
passenger air bags, ABS braking and diesel fuel
(where available) be included in the standard vehicle
In our experience few organisations are aware of the Work, Health & Safety Risk associated with staff
driving company vehicles and the only requirement is a current driver’s licence. This risk can be
mitigated through driver training.
7 out of 10 companies do not have a ‘motor vehicle’ policy or at least the employees are unaware of
ere is a policy or not an organisation is at risk of failing to ensure an employee
who is required to drive/operate their vehicles (or plant) on the road has the necessary skills. A
sample policy is available from IPWEA.
Research published in the National Motor Vehicle Crash Causation Survey Report, April 2008.
reported that, 90% of all incidents and collisions are caused by driver actions (decision making),
which are expressions of their behaviour, attitude and personal choices, not their inability to dri
Line’ Diver Training Program, is a road safety initiative designed to improve driver
skills. It allows drivers to participate at their own pace in their own time. Once enrolled a participant
has 12 months unlimited access to up to 24 driver training modules.
By focusing on a targeted and methodical approach to driver education the organisation is able to
understand the risk and mitigate the risk and the online driver training can highlight policies.
The advantages of undertaking driver awareness using ‘on-line’ Driver training is based on but not
90% of Driving incidents are decision based
Continuous awareness changes driver behaviour
Skills based driver training if not practiced deteriorates over time
LIGHT FLEET 32
We recommend the IPWEA Light Fleet Selection Model is used prior to making a new purchase to
www.ipwea.org/fleet for
access to the model and other online fleet management tools. Online Videos demonstrate how to use
Ease of Implementation
In our experience few organisations are aware of the Work, Health & Safety Risk associated with staff
driving company vehicles and the only requirement is a current driver’s licence. This risk can be
7 out of 10 companies do not have a ‘motor vehicle’ policy or at least the employees are unaware of
ere is a policy or not an organisation is at risk of failing to ensure an employee
who is required to drive/operate their vehicles (or plant) on the road has the necessary skills. A
Motor Vehicle Crash Causation Survey Report, April 2008.
reported that, 90% of all incidents and collisions are caused by driver actions (decision making),
which are expressions of their behaviour, attitude and personal choices, not their inability to drive.
Line’ Diver Training Program, is a road safety initiative designed to improve driver
skills. It allows drivers to participate at their own pace in their own time. Once enrolled a participant
By focusing on a targeted and methodical approach to driver education the organisation is able to
understand the risk and mitigate the risk and the online driver training can highlight policies.
line’ Driver training is based on but not
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 32 of 131
• Skills based driver training promotes ‘over confidence’ in drivers and highlights reactive skills
• On-line driver training is measured, referenced and promotes proactive skills
• On-line driver training is more cost effective
Monitoring of the on-line modules allows for reports to
consistently poor performers. Remedial action can be implemented and driver training programs such
as ‘one on one’ driver assessments undertaken in order to correct these anomalies.
The rewards for being proactive include:
• safer work and commuter driving for employees
• lower fleet and insurance costs
• improved fleet productivity
• enhanced image and reputation
• more effective driving safety management system
• enhanced OHS/WHS compliance
NRMA Insurance recently called
to reduce staff injuries and avoid preventable fatalities on the road. Refer
http://www.insurancebusinessonline.com.au/news/insurer
206166.aspx
RECOMMENDATION
Risk Management in Light Fleet
10. A Safe Driving Policy is adopted and
employees required to drive a council vehicle with the
requirement that the employee sign off as having read
and understood the policy.
11. Consideration is given to staff undertaking the IPWEA
Online Safe Driving Program.
1.10. Fuel Options
The future is expected to deliver an era of more sophisticated fuels, better engine technology, and
improved recycling of plant and vehicle
include:
Readily Available
• Ethanol ULP mix (E10) – Ethanol is now standard in the eastern states.
• Hybrid cars are now common place in Australia. However, using these vehicles in a rural
environment (in their present configuration) does not offer environmental savings due to the
requirement for the vehicles engine to provide power at speeds over 60km/hr. These vehicles
are best applied in an inner city urban environment where they see full bene
in resale value are making Hybrid vehicles more viable for inner city commuter use.
Review of Light Fleet & Heavy Plant
LIGHT FLEET
aining promotes ‘over confidence’ in drivers and highlights reactive skills
line driver training is measured, referenced and promotes proactive skills
line driver training is more cost effective
line modules allows for reports to be generated, which highlight drivers who are
consistently poor performers. Remedial action can be implemented and driver training programs such
as ‘one on one’ driver assessments undertaken in order to correct these anomalies.
tive include:
safer work and commuter driving for employees
lower fleet and insurance costs
improved fleet productivity
enhanced image and reputation
more effective driving safety management system
enhanced OHS/WHS compliance
on employers to improve and adopt safe vehicle fleet policy in a bid
to reduce staff injuries and avoid preventable fatalities on the road. Refer
http://www.insurancebusinessonline.com.au/news/insurer-nrma-calls-for-increased
Risk Management in Light Fleet Impact to Organisation
A Safe Driving Policy is adopted and distributed to all
employees required to drive a council vehicle with the
requirement that the employee sign off as having read
and understood the policy.
Consideration is given to staff undertaking the IPWEA
Online Safe Driving Program.
The future is expected to deliver an era of more sophisticated fuels, better engine technology, and
improved recycling of plant and vehicle waste. Future fuels that will reduce the environmental impact
Ethanol is now standard in the eastern states.
Hybrid cars are now common place in Australia. However, using these vehicles in a rural
nment (in their present configuration) does not offer environmental savings due to the
requirement for the vehicles engine to provide power at speeds over 60km/hr. These vehicles
are best applied in an inner city urban environment where they see full bene
in resale value are making Hybrid vehicles more viable for inner city commuter use.
LIGHT FLEET 33
aining promotes ‘over confidence’ in drivers and highlights reactive skills
line driver training is measured, referenced and promotes proactive skills
be generated, which highlight drivers who are
consistently poor performers. Remedial action can be implemented and driver training programs such
as ‘one on one’ driver assessments undertaken in order to correct these anomalies.
on employers to improve and adopt safe vehicle fleet policy in a bid
increased-employee-safety-
Ease of Implementation
The future is expected to deliver an era of more sophisticated fuels, better engine technology, and
waste. Future fuels that will reduce the environmental impact
Hybrid cars are now common place in Australia. However, using these vehicles in a rural
nment (in their present configuration) does not offer environmental savings due to the
requirement for the vehicles engine to provide power at speeds over 60km/hr. These vehicles
are best applied in an inner city urban environment where they see full benefit. Improvements
in resale value are making Hybrid vehicles more viable for inner city commuter use.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 33 of 131
• LPG – Commonly available in Australia. Greenhouse ratings are average due to fuel
consumption being higher when compared to the same vehicle powered by
combined with their higher air pollution rating does not necessarily make them an
environmentally friendly fuel alternative.
Not Readily Available
• Fuel cell technology – The cleanest concept available to date, however only available in limited
numbers and extremely expensive due to emerging technology status. Perth currently
operates some trial buses using this technology.
• Compressed Natural Gas (CNG)
due to fuel consumption being higher
This combined with their higher air pollution rating does not necessarily make them an
environmentally friendly fuel alternative.
• Electric vehicles – are in the early stages of commercial availability in
Miev and Nissan Leaf vehicles should be available for delivery in the next 12 months. An
electric vehicle may have a low direct environmental impact. However, it is important to
consider the birth to death environmental impact. We
purchase of electric vehicles until such time as the full cost and environmental impact is
known.
Many of the above fuels and the technology involved in using them are still largely at an early
developmental stage. As a result of reliability issues with some fuels, the resultant downtime,
mechanical failures, and low resale value can make the cost of using them expensive.
Other comments:
• With the introduction of Euro 6 diesel will be cleaner with fuel consumptions expecte
- 100km and diesel cars are excellent for long distance driving.
• When evaluating diesel vehicles, pollution ratings must be considered and with the
introduction of Euro 6 the diesel engine will be cleaner than ever before.
• Re-refined oils are not considered suitable as they conflict with manufacturers’
recommendations.
• Organic fuels are at an early stage of development and there are major quality issues at this
time.
• Synthetic oils are often included in manufacturers’ recommendations where serv
are increased. There is no requirement to specify them as manufacturers are fully aware of
the responsibilities to the environment.
• Noise reduction is part of the development of Australian Design Rules (ADR). All vehicles on
the road have to comply with ADR.
• Fuel economy is addressed in our recommended fleet mix and is considered in whole of life
costs. Its environmental impact is considered in CO2 output and pollution ratings.
Review of Light Fleet & Heavy Plant
LIGHT FLEET
Commonly available in Australia. Greenhouse ratings are average due to fuel
consumption being higher when compared to the same vehicle powered by
combined with their higher air pollution rating does not necessarily make them an
environmentally friendly fuel alternative.
The cleanest concept available to date, however only available in limited
mbers and extremely expensive due to emerging technology status. Perth currently
operates some trial buses using this technology.
Compressed Natural Gas (CNG) – Limited use in Australia. Greenhouse ratings are average
due to fuel consumption being higher when compared to the same vehicle powered by ULP.
This combined with their higher air pollution rating does not necessarily make them an
environmentally friendly fuel alternative.
are in the early stages of commercial availability in Australia. The Mitsubishi
Miev and Nissan Leaf vehicles should be available for delivery in the next 12 months. An
electric vehicle may have a low direct environmental impact. However, it is important to
consider the birth to death environmental impact. We suggest the Council
purchase of electric vehicles until such time as the full cost and environmental impact is
Many of the above fuels and the technology involved in using them are still largely at an early
sult of reliability issues with some fuels, the resultant downtime,
mechanical failures, and low resale value can make the cost of using them expensive.
With the introduction of Euro 6 diesel will be cleaner with fuel consumptions expecte
100km and diesel cars are excellent for long distance driving.
When evaluating diesel vehicles, pollution ratings must be considered and with the
introduction of Euro 6 the diesel engine will be cleaner than ever before.
not considered suitable as they conflict with manufacturers’
Organic fuels are at an early stage of development and there are major quality issues at this
Synthetic oils are often included in manufacturers’ recommendations where serv
are increased. There is no requirement to specify them as manufacturers are fully aware of
the responsibilities to the environment.
Noise reduction is part of the development of Australian Design Rules (ADR). All vehicles on
comply with ADR.
Fuel economy is addressed in our recommended fleet mix and is considered in whole of life
costs. Its environmental impact is considered in CO2 output and pollution ratings.
LIGHT FLEET 34
Commonly available in Australia. Greenhouse ratings are average due to fuel
consumption being higher when compared to the same vehicle powered by ULP. This
combined with their higher air pollution rating does not necessarily make them an
The cleanest concept available to date, however only available in limited
mbers and extremely expensive due to emerging technology status. Perth currently
Limited use in Australia. Greenhouse ratings are average
when compared to the same vehicle powered by ULP.
This combined with their higher air pollution rating does not necessarily make them an
Australia. The Mitsubishi
Miev and Nissan Leaf vehicles should be available for delivery in the next 12 months. An
electric vehicle may have a low direct environmental impact. However, it is important to
Council hold off any
purchase of electric vehicles until such time as the full cost and environmental impact is
Many of the above fuels and the technology involved in using them are still largely at an early
sult of reliability issues with some fuels, the resultant downtime,
mechanical failures, and low resale value can make the cost of using them expensive.
With the introduction of Euro 6 diesel will be cleaner with fuel consumptions expected to be 6lt
When evaluating diesel vehicles, pollution ratings must be considered and with the
not considered suitable as they conflict with manufacturers’
Organic fuels are at an early stage of development and there are major quality issues at this
Synthetic oils are often included in manufacturers’ recommendations where service intervals
are increased. There is no requirement to specify them as manufacturers are fully aware of
Noise reduction is part of the development of Australian Design Rules (ADR). All vehicles on
Fuel economy is addressed in our recommended fleet mix and is considered in whole of life
costs. Its environmental impact is considered in CO2 output and pollution ratings.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 34 of 131
A comparison of vehicles show
• 4 cylinder vehicles produce less
cylinder vehicles
• Per litre of fuel burnt Diesel produces more CO
consumption of diesel vehicles results in a lower CO
• Hybrid vehicles rank highly for low CO
and Toyota Yaris.
While there is a perception that LPG vehicles have a lower CO
vehicles, this is not the case as the fuel consumption on LPG vehicles is higher than ULP
vehicles. This results in higher CO
The argument made against diesel is that it has a higher pollution rating. However, current technology
using exhaust after treatment has, in some cases, reduced air pollution of diesel
than ULP and LPG vehicles. Diesel emissions will be even cleaner following the introduction of Euro
6 vehicles planned for early 2017.
In most cases Council is advised to consider diesel vehicles that have a lower CO
LPG and with an equivalent pollution rating.
CO2 outputs and pollution ratings provide a useful tool in comparing the environmental impacts of
different vehicles. However we recommend against using environmental considerations alone in
vehicle purchase decisions. Hence our recommendation for a weighted criteria approach.
It is predicted by the major manufacturers that in the near future the international vehicle market will
comprise of 20% hybrid technology, 20% ULP and its derivatives, 50% diesel and the
will be a mix of LPG, CNG and bio
fuel cell technology for the longer term.
1.11. Make & Model Selection
A detailed review of Council’s existing make/model light fleet asset base has been undertaken using
our Light Fleet Survey template (refer
The current structure of the fleet by way of make and model is totally suitable for the application at
Clarence Valley. There is however an opportunity to downsize the physical size of vehicles. Many
small cars are now designed with a larger interior space but are still achieving a 5 star safety rating.
Given the large average mileage of the fleet fuel con
vehicles will deliver fuel savings.
For example the current RAV 4 model has physically grown and could be replaced by the Mazda
CX3, Hyundai i40, Nissan Qashqai or Mitsubishi ASX.
1.12. Vehicle Optional Extras
Optional extras fitted to light-fleet vehicles can have a substantial effect on the resale value and
capital purchase costs. Vehicle extras in the not recommended category are not encouraged as they
can reduce resale values.
Review of Light Fleet & Heavy Plant
LIGHT FLEET
A comparison of vehicles shows
4 cylinder vehicles produce less CO2 and have a lower pollution impact compared to 6
Per litre of fuel burnt Diesel produces more CO2 than ULP. However the lower fuel
consumption of diesel vehicles results in a lower CO2 output.
Hybrid vehicles rank highly for low CO2 outputs but so does the Honda Jazz, VW Polo Petrol
While there is a perception that LPG vehicles have a lower CO2 output than ULP and diesel fuelled
vehicles, this is not the case as the fuel consumption on LPG vehicles is higher than ULP
vehicles. This results in higher CO2 outputs in some cases.
The argument made against diesel is that it has a higher pollution rating. However, current technology
using exhaust after treatment has, in some cases, reduced air pollution of diesel vehicles to lower
than ULP and LPG vehicles. Diesel emissions will be even cleaner following the introduction of Euro
6 vehicles planned for early 2017.
In most cases Council is advised to consider diesel vehicles that have a lower CO
LPG and with an equivalent pollution rating.
outputs and pollution ratings provide a useful tool in comparing the environmental impacts of
different vehicles. However we recommend against using environmental considerations alone in
cisions. Hence our recommendation for a weighted criteria approach.
It is predicted by the major manufacturers that in the near future the international vehicle market will
comprise of 20% hybrid technology, 20% ULP and its derivatives, 50% diesel and the
will be a mix of LPG, CNG and bio-products. Most manufacturers are investing heavily in hydrogen
fuel cell technology for the longer term.
Make & Model Selection
A detailed review of Council’s existing make/model light fleet asset base has been undertaken using
our Light Fleet Survey template (refer Appendix 2).
The current structure of the fleet by way of make and model is totally suitable for the application at
Clarence Valley. There is however an opportunity to downsize the physical size of vehicles. Many
small cars are now designed with a larger interior space but are still achieving a 5 star safety rating.
Given the large average mileage of the fleet fuel consumption is a major consideration and smaller
vehicles will deliver fuel savings.
For example the current RAV 4 model has physically grown and could be replaced by the Mazda
CX3, Hyundai i40, Nissan Qashqai or Mitsubishi ASX.
Vehicle Optional Extras
fleet vehicles can have a substantial effect on the resale value and
capital purchase costs. Vehicle extras in the not recommended category are not encouraged as they
LIGHT FLEET 35
and have a lower pollution impact compared to 6
than ULP. However the lower fuel
utputs but so does the Honda Jazz, VW Polo Petrol
output than ULP and diesel fuelled
vehicles, this is not the case as the fuel consumption on LPG vehicles is higher than ULP and diesel
The argument made against diesel is that it has a higher pollution rating. However, current technology
vehicles to lower
than ULP and LPG vehicles. Diesel emissions will be even cleaner following the introduction of Euro
In most cases Council is advised to consider diesel vehicles that have a lower CO2 output rather than
outputs and pollution ratings provide a useful tool in comparing the environmental impacts of
different vehicles. However we recommend against using environmental considerations alone in
cisions. Hence our recommendation for a weighted criteria approach.
It is predicted by the major manufacturers that in the near future the international vehicle market will
comprise of 20% hybrid technology, 20% ULP and its derivatives, 50% diesel and the balance of 10%
products. Most manufacturers are investing heavily in hydrogen
A detailed review of Council’s existing make/model light fleet asset base has been undertaken using
The current structure of the fleet by way of make and model is totally suitable for the application at
Clarence Valley. There is however an opportunity to downsize the physical size of vehicles. Many
small cars are now designed with a larger interior space but are still achieving a 5 star safety rating.
sumption is a major consideration and smaller
For example the current RAV 4 model has physically grown and could be replaced by the Mazda
fleet vehicles can have a substantial effect on the resale value and
capital purchase costs. Vehicle extras in the not recommended category are not encouraged as they
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 35 of 131
Options that add resale value
• Passenger Airbag if 4 star is not available for commercial vehicles
• Cruise control
• Remote central locking
• Air-conditioning
• Light coloured paint (not black, red, dark blue etc)
reduces resale value by up to $1,000
• Floor mats (rubber preferred)
• Mudflaps front and rear
• ABS
• Stability control (ESP) where available as standard
part of the safety considerations in the purchase decision where available as standard
• Auto adjustable rear mirrors
Options that detract from resale value
• Tow bar on passenger vehicles
heavy loads all its life
• Dark coloured duco
• Manual transmission
• Additional solar tint - Is pe
now offer glass that minimises UV rays. All air
quite capable of cooling the vehicle without additional tinting. Tinting film ages and often
requires replacing at resale.
Note:
• Driving with headlights on should be considered as a policy issue rather than an extra to be
specified. Auto headlight on ignition comes at an extra cost and does not currently add to
resale value.
• Care should be taken in drill
Review of Light Fleet & Heavy Plant
LIGHT FLEET
Options that add resale value
Passenger Airbag if 4 star is not available for commercial vehicles
Light coloured paint (not black, red, dark blue etc) - Dark colour duco costs more to repair and
reduces resale value by up to $1,000 at changeover.
Floor mats (rubber preferred)
Stability control (ESP) where available as standard - Stability control should be considered as
part of the safety considerations in the purchase decision where available as standard
Auto adjustable rear mirrors
Options that detract from resale value
Tow bar on passenger vehicles – this creates the perception that the vehicle has been towing
Is perceived as reducing the impact of UV rays but all manufacturers
now offer glass that minimises UV rays. All air-conditioning supplied by manufacturers is
quite capable of cooling the vehicle without additional tinting. Tinting film ages and often
s replacing at resale.
Driving with headlights on should be considered as a policy issue rather than an extra to be
specified. Auto headlight on ignition comes at an extra cost and does not currently add to
Care should be taken in drilling holes for mobile phones, radios and other fittings.
LIGHT FLEET 36
Dark colour duco costs more to repair and
Stability control should be considered as
part of the safety considerations in the purchase decision where available as standard.
this creates the perception that the vehicle has been towing
rceived as reducing the impact of UV rays but all manufacturers
conditioning supplied by manufacturers is
quite capable of cooling the vehicle without additional tinting. Tinting film ages and often
Driving with headlights on should be considered as a policy issue rather than an extra to be
specified. Auto headlight on ignition comes at an extra cost and does not currently add to
ing holes for mobile phones, radios and other fittings.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 36 of 131
RECOMMENDATION
Vehicle Optional Extras
12. The following recommended accessories are included
in specifications for new vehicle purchases.
a) Recommended (for safety & resale value)
• Air Conditioning
• ONLY Light metallic paint
• Floor mats/ Mud flaps front & rear
• Passenger air bag where if not standard
• Cruise control (adaptive if available)
• ABS braking (Essential)
• Stability Control (where available as
• Cargo barriers for station wagons/vans
• Central locking
• Auto adjustable rear mirrors
• Lane assist if available
• Reverse warning sensors or a reversing
camera where available as part of a standard
package
b) Optional
• Headlight and bonnet protector
• Weather shield
c) Not Recommended (can detract from resale
value)
• Tow pack
• Dark colour duco (reduces resale value)
• Manual other than 4WD Utility
• Installation of solar
manufacture
• Bull bars (from a pedestrian safety
perspective)
1.13. Private Use and Fringe Benefits Tax
Private and commuting use of council owned vehicles introduces additional costs to employers. In this
section we look at fringe benefits tax
Council’s FBT liability in 2014/15 amounted to $50,623 for motor vehicles.
This amount of FBT is low for such a large fleet and reflects the level of lease back contributions
being made by staff with full private use and commuting u
Firstly we need to explain how FBT applies and consider the options to minimise FBT.
When does FBT apply?
For Fringe Benefit Tax reasons, a car is:
• a station wagon, sedan, panel van or ute (including four
• any other goods-carrying vehicle that has a capacity to carry 1 tonne or less; or
• any other vehicle which is designed to carry less than nine passengers
Review of Light Fleet & Heavy Plant
LIGHT FLE
Impact to Organisation
The following recommended accessories are included
in specifications for new vehicle purchases.
(for safety & resale value)
ONLY Light metallic paint
Floor mats/ Mud flaps front & rear
Passenger air bag where if not standard
Cruise control (adaptive if available)
ABS braking (Essential)
Stability Control (where available as standard)
Cargo barriers for station wagons/vans
Auto adjustable rear mirrors
Lane assist if available
Reverse warning sensors or a reversing
camera where available as part of a standard
Headlight and bonnet protector
Not Recommended (can detract from resale
Dark colour duco (reduces resale value)
Manual other than 4WD Utility
Installation of solar tint to windows post
Bull bars (from a pedestrian safety
Private Use and Fringe Benefits Tax
Private and commuting use of council owned vehicles introduces additional costs to employers. In this
section we look at fringe benefits tax – how it applies and strategies to minimise FBT liabilities. The
Council’s FBT liability in 2014/15 amounted to $50,623 for motor vehicles.
This amount of FBT is low for such a large fleet and reflects the level of lease back contributions
being made by staff with full private use and commuting use. This is addressed in Section 1.13.3.
Firstly we need to explain how FBT applies and consider the options to minimise FBT.
For Fringe Benefit Tax reasons, a car is:
a station wagon, sedan, panel van or ute (including four-wheel drive utes);
carrying vehicle that has a capacity to carry 1 tonne or less; or
any other vehicle which is designed to carry less than nine passengers
LIGHT FLEET 37
Ease of Implementation
Private and commuting use of council owned vehicles introduces additional costs to employers. In this
e FBT liabilities. The
This amount of FBT is low for such a large fleet and reflects the level of lease back contributions
se. This is addressed in Section 1.13.3.
Firstly we need to explain how FBT applies and consider the options to minimise FBT.
carrying vehicle that has a capacity to carry 1 tonne or less; or
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 37 of 131
Exempt Vehicles
Provided they are only used for home to work travel, business purposes and
and irregular travel:
• Motor Cycles
• Vehicles designed to carry a load of at least 1 tonne
• Taxis, panel vans, utilities and commercial vehicles designed to carry a load of less than 1
tonne but not principally designed to carry pas
o According to MT 2024 this includes Nissan Navara Dual Cab Ute DX, Mazda Bravo
4WD Dual Cab Ute DX5, Toyota Hilux 4x2 Dual Cab Ute, Ford Courier 4x2Crew Cab
pick-up GL and Holden Ute Series III 179kw V8. Other vehicles that have more load
space than passenger space may well qualify.
1.13.1 Fringe Benefit Tax Assessment Methods
There are two methods available to determine the value of a motor vehicle benefit for FBT purposes:
• The statutory method; and
• The operating cost method (log book).
The statutory formula method must be used unless an employer elects to use the operating cost
method. A decision to use the operating cost method must be made no later than the day on which an
FBT return is due to be lodged with the ATO or, by 21 May if a return is
Employers are free to choose whichever method yields the lowest taxable value. There is no need to
notify the ATO of the method chosen as business records are sufficient evidence of this.
A reportable benefit must be included on
benefit. This is calculated by taking the driver’s share of FBT and grossing up to the pre
The reportable benefit will not be included in staff’s assessable (or taxable) income.
reportable benefit is taken into account by the Australian Taxation Office (ATO) for various income
tests. Eg. Superannuation and termination surcharges, HECS, child support etc.
The statutory formula method calculates the taxable value of the
percentage of the car's value, based on the number of days during the FBT year on which the car was
available for private use. The percentage is called the ‘statutory fraction’. Since 1 April 2014 the
statutory rate of 20% applies regardless of kilometres travelled.
Availability for Private Use
A car is considered by the Australian Taxation Office to be available for private use if it is garaged at
or kept at or near an employee’s private residence and/or in their custody and con
from home to work is considered private use for tax purposes.
Situations in which a car is considered
a. the car is off the road for any reason for more than three days e.g. extensive repairs are
carried out, as opposed to a routine service or maintenance;
Review of Light Fleet & Heavy Plant
LIGHT FLEET
Provided they are only used for home to work travel, business purposes and other minor, infrequent
Vehicles designed to carry a load of at least 1 tonne
Taxis, panel vans, utilities and commercial vehicles designed to carry a load of less than 1
tonne but not principally designed to carry passengers.
According to MT 2024 this includes Nissan Navara Dual Cab Ute DX, Mazda Bravo
4WD Dual Cab Ute DX5, Toyota Hilux 4x2 Dual Cab Ute, Ford Courier 4x2Crew Cab
up GL and Holden Ute Series III 179kw V8. Other vehicles that have more load
an passenger space may well qualify.
1.13.1 Fringe Benefit Tax Assessment Methods
There are two methods available to determine the value of a motor vehicle benefit for FBT purposes:
The statutory method; and
The operating cost method (log book).
tory formula method must be used unless an employer elects to use the operating cost
method. A decision to use the operating cost method must be made no later than the day on which an
FBT return is due to be lodged with the ATO or, by 21 May if a return is not required to be lodged.
Employers are free to choose whichever method yields the lowest taxable value. There is no need to
notify the ATO of the method chosen as business records are sufficient evidence of this.
A reportable benefit must be included on the employee’s group certificate for the notional value of that
benefit. This is calculated by taking the driver’s share of FBT and grossing up to the pre
The reportable benefit will not be included in staff’s assessable (or taxable) income.
reportable benefit is taken into account by the Australian Taxation Office (ATO) for various income
tests. Eg. Superannuation and termination surcharges, HECS, child support etc.
The statutory formula method calculates the taxable value of the motor vehicle benefit as a
percentage of the car's value, based on the number of days during the FBT year on which the car was
available for private use. The percentage is called the ‘statutory fraction’. Since 1 April 2014 the
es regardless of kilometres travelled.
A car is considered by the Australian Taxation Office to be available for private use if it is garaged at
or kept at or near an employee’s private residence and/or in their custody and con
from home to work is considered private use for tax purposes.
Situations in which a car is considered not to be available for private use are:
the car is off the road for any reason for more than three days e.g. extensive repairs are
carried out, as opposed to a routine service or maintenance;
LIGHT FLEET 38
other minor, infrequent
Taxis, panel vans, utilities and commercial vehicles designed to carry a load of less than 1
According to MT 2024 this includes Nissan Navara Dual Cab Ute DX, Mazda Bravo
4WD Dual Cab Ute DX5, Toyota Hilux 4x2 Dual Cab Ute, Ford Courier 4x2Crew Cab
up GL and Holden Ute Series III 179kw V8. Other vehicles that have more load
There are two methods available to determine the value of a motor vehicle benefit for FBT purposes:
tory formula method must be used unless an employer elects to use the operating cost
method. A decision to use the operating cost method must be made no later than the day on which an
not required to be lodged.
Employers are free to choose whichever method yields the lowest taxable value. There is no need to
notify the ATO of the method chosen as business records are sufficient evidence of this.
the employee’s group certificate for the notional value of that
benefit. This is calculated by taking the driver’s share of FBT and grossing up to the pre-tax position.
The reportable benefit will not be included in staff’s assessable (or taxable) income. However the
reportable benefit is taken into account by the Australian Taxation Office (ATO) for various income
motor vehicle benefit as a
percentage of the car's value, based on the number of days during the FBT year on which the car was
available for private use. The percentage is called the ‘statutory fraction’. Since 1 April 2014 the
A car is considered by the Australian Taxation Office to be available for private use if it is garaged at
or kept at or near an employee’s private residence and/or in their custody and control. Driving a car
the car is off the road for any reason for more than three days e.g. extensive repairs are being
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 38 of 131
b. the vehicle is not garaged overnight at the employees place of residence e.g. it is garaged at
work and the keys to the vehicle are held by your office and there is a prohibition on the
private use of the vehicle.
The lower the number of days available for private use, the lower the value for FBT purposes. This
means a lower reportable benefit shown on an employee payment summary and less fringe benefits
tax paid by the employer.
The Statutory Method
Under the statutory formula method, the value of the benefit is calculated as follows:
Cost of the Car X Statutory Percentage
Employee Contribution is any after tax
reimbursed by the employer.
The Operating Cost (Log Book) Method
This method calculates the taxable value as a % of the total costs of operating the car during the FBT
year.
• The value for FBT purposes is the private use %.
• To determine the business and private use %, a logbook must be used.
• As a minimum the logbook is required to be maintained for a continuous period of 12 weeks
for the first year the logbook method is used and then ev
2 tax years.
Under the Operating Cost method, the value of the benefit is calculated as follows:
Total Operating Costs
Reducing the value after 4 years
For the purpose of FBT calculations an employer can reduce the base value of a car by one
the FBT year that starts after the car has been owned or leased for four years.
• The reduction applies from 1 April after the fourth anniversary of the date
was first owned or leased.
• The reduction applies only once for a particular car and the reduced base value is used for
subsequent years.
• The reduction does not apply to non
Example:
An employer purchases a car for $30,000 (including GST) on 1 July 2013. The employer can reduce
the base value of the car by one-
Review of Light Fleet & Heavy Plant
LIGHT FLEET
the vehicle is not garaged overnight at the employees place of residence e.g. it is garaged at
work and the keys to the vehicle are held by your office and there is a prohibition on the
private use of the vehicle.
The lower the number of days available for private use, the lower the value for FBT purposes. This
means a lower reportable benefit shown on an employee payment summary and less fringe benefits
Under the statutory formula method, the value of the benefit is calculated as follows:
Statutory Percentage X Days Vehicle Available for Private Use
less Employee Contribution
after tax payment made towards the cost of the car that has not been
The Operating Cost (Log Book) Method
This method calculates the taxable value as a % of the total costs of operating the car during the FBT
or FBT purposes is the private use %.
To determine the business and private use %, a logbook must be used.
As a minimum the logbook is required to be maintained for a continuous period of 12 weeks
for the first year the logbook method is used and then every 5 years. The period may overlap
Under the Operating Cost method, the value of the benefit is calculated as follows:
Total Operating Costs X Percentage of Private Use less Employee Contribution
Reducing the value after 4 years
For the purpose of FBT calculations an employer can reduce the base value of a car by one
the FBT year that starts after the car has been owned or leased for four years.
The reduction applies from 1 April after the fourth anniversary of the date
was first owned or leased.
The reduction applies only once for a particular car and the reduced base value is used for
The reduction does not apply to non-business accessories added after the car is acquired.
An employer purchases a car for $30,000 (including GST) on 1 July 2013. The employer can reduce
-third ($10,000) in the FBT year beginning 1 April 2018.
LIGHT FLEET 39
the vehicle is not garaged overnight at the employees place of residence e.g. it is garaged at
work and the keys to the vehicle are held by your office and there is a prohibition on the
The lower the number of days available for private use, the lower the value for FBT purposes. This
means a lower reportable benefit shown on an employee payment summary and less fringe benefits
Under the statutory formula method, the value of the benefit is calculated as follows:
Days Vehicle Available for Private Use / Days in the Year
payment made towards the cost of the car that has not been
This method calculates the taxable value as a % of the total costs of operating the car during the FBT
As a minimum the logbook is required to be maintained for a continuous period of 12 weeks
ery 5 years. The period may overlap
Under the Operating Cost method, the value of the benefit is calculated as follows:
Employee Contribution
For the purpose of FBT calculations an employer can reduce the base value of a car by one-third in
The reduction applies from 1 April after the fourth anniversary of the date on which the car
The reduction applies only once for a particular car and the reduced base value is used for
business accessories added after the car is acquired.
An employer purchases a car for $30,000 (including GST) on 1 July 2013. The employer can reduce
third ($10,000) in the FBT year beginning 1 April 2018.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 39 of 131
If our recommendation to extend vehicle replacement to 5 years/150,000
applied to low utilisation vehicles.
Utilities
Provided the private use of a utility is limited to:
• travel between home and work,
• travel that is incidental to travel in course of duties of employment, or
• non-work related use that is minor, infrequent and irregular (e.g. occasional use of the ute to
remove domestic rubbish)
then the private use is FBT exempt.
Private use beyond the above is subject to FBT as a residual benefit and this is the most expensive
method of fringe benefits tax calculation based on 55 cents per private use kilometer and this rate is
then also applied to the commuting use.
Further information on FBT and example calculations is provided in
Opportunities to Reduce FBT
While the statutory method is the most commonly used method for calculating FBT payable for car
fringe benefits, the Operating cost method may deliver the lowest FBT liability, particularly where
there is a high percentage of business use. In the case of commercial vehicles used
log books should be used permanently.
CVC predominantly uses the Statutory Formula Method, except for 14 vehicles for which the
operating cost method is used. Most of these vehicles are high business use.
Review of Light Fleet & Heavy Plant
LIGHT FLEET
If our recommendation to extend vehicle replacement to 5 years/150,000km the above benefit can be
applied to low utilisation vehicles.
Provided the private use of a utility is limited to:
travel between home and work,
travel that is incidental to travel in course of duties of employment, or
that is minor, infrequent and irregular (e.g. occasional use of the ute to
remove domestic rubbish)
then the private use is FBT exempt.
Private use beyond the above is subject to FBT as a residual benefit and this is the most expensive
enefits tax calculation based on 55 cents per private use kilometer and this rate is
then also applied to the commuting use.
Further information on FBT and example calculations is provided in Appendix 3.
Opportunities to Reduce FBT
hod is the most commonly used method for calculating FBT payable for car
fringe benefits, the Operating cost method may deliver the lowest FBT liability, particularly where
there is a high percentage of business use. In the case of commercial vehicles used
log books should be used permanently.
CVC predominantly uses the Statutory Formula Method, except for 14 vehicles for which the
operating cost method is used. Most of these vehicles are high business use.
LIGHT FLEET 40
km the above benefit can be
that is minor, infrequent and irregular (e.g. occasional use of the ute to
Private use beyond the above is subject to FBT as a residual benefit and this is the most expensive
enefits tax calculation based on 55 cents per private use kilometer and this rate is
hod is the most commonly used method for calculating FBT payable for car
fringe benefits, the Operating cost method may deliver the lowest FBT liability, particularly where
there is a high percentage of business use. In the case of commercial vehicles used for private use
CVC predominantly uses the Statutory Formula Method, except for 14 vehicles for which the
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 40 of 131
Table 8 – Vehicles with FBT Calc
Plant Number
Registration Number
0123-06 BU09ZV
0128-03 BM57VF
0153-04 BS04FM
0157-04 BP78DV
0165-04 BT97YR
0170-04 BS03FM
0177-03 BV80RE
0178-02 BJ95UE
0190-03 BQ99FS
0194-04 BN19PE
0197-05 BV09ZE
0210-04 BV39ZE
0221-04 BT25MP
* From Uniqco light fleet staff survey
The only way to be sure of which method will minimise FBT liability is to use log books
all private use vehicles and make the decision of which method to adopt on an annual basis. Our
recommended strategy to minimise FBT is:
(i) Selection of vehicles with lower FBT liabilities
(ii) Ensure there are post tax staff contributions for priv
(iii) Use of log books
• For a minimum of 3 months per year for all vehicles (only current practice for selected
vehicles)
• Permanently for FBT applicable vehicles with high business use and commuting use as well
as private use
• Permanently for commercial vehicles with private use
The use of log books can reduce FBT liabilities and provide invaluable information on business use
for managing the fleet.
Review of Light Fleet & Heavy Plant
LIGHT FLEET
Vehicles with FBT Calculated Using Operating Cost Method
Registration Number
Description * Percentage Business Use
BU09ZV Toyota Kluger KXS 62
BM57VF Toyota Corolla Conquest
Sedan 65
BS04FM Hyundai Santa Fe 72
BP78DV Toyota RAV4 CV 4WD 88
BT97YR Toyota Corolla Sedan 60
BS03FM Toyota Corolla Conquest
Sedan 56
BV80RE Holden Colorado 88
BJ95UE Subaru Forester 41
BQ99FS Mitsubishi Triton GLX 4x4
Dual Cab 48
BN19PE Holden Berlina VE Sedan 46
BV09ZE Toyota RAV4 20
BV39ZE Subaru Forester Wagon 82
BT25MP Holden Colorado 4WD Dual 77
From Uniqco light fleet staff survey
The only way to be sure of which method will minimise FBT liability is to use log books
all private use vehicles and make the decision of which method to adopt on an annual basis. Our
recommended strategy to minimise FBT is:
Selection of vehicles with lower FBT liabilities
Ensure there are post tax staff contributions for private use (current practice)
For a minimum of 3 months per year for all vehicles (only current practice for selected
Permanently for FBT applicable vehicles with high business use and commuting use as well
ly for commercial vehicles with private use
The use of log books can reduce FBT liabilities and provide invaluable information on business use
LIGHT FLEET 41
Percentage Business Use
62
65
72
88
60
56
88
41
48
46
20
82
77
The only way to be sure of which method will minimise FBT liability is to use log books permanently in
all private use vehicles and make the decision of which method to adopt on an annual basis. Our
ate use (current practice)
For a minimum of 3 months per year for all vehicles (only current practice for selected
Permanently for FBT applicable vehicles with high business use and commuting use as well
The use of log books can reduce FBT liabilities and provide invaluable information on business use
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 41 of 131
Car Pooling
An increase in car pooling can result in a lower FBT cost particularly
employees receiving benefits below $300 which are exempt under the minor and infrequent rule. If
however the value of the use for employees exceeds the $300 threshold there is no benefit in pooling
versus providing vehicles for exclusive use by staff. The only other benefit that results from pooling is
that the taxable value of the benefit may not need to be reported on the employees PAYG payment
summary as a reportable fringe benefit.
RECOMMENDATION
Private Use and Fringe Benefits Tax
13. Where light vehicles that attract FBT are used for a
substantial amount of work
should use logbooks in accordance with Australian
Taxation Office guidelines to minimise FBT
noting that this will also provide invaluable information
on business use for managing the fleet.
14. For the purpose of FBT calculations Council note the
opportunity for low utilisation vehicles that are held for
5 years, to reduce the base value of a car
in the FBT year that starts after the car has been
owned or leased for four years.
Current Commuter and Private
From the background provided for this review:
“Council staff that have a vehicle provided as part of their employment package pay a leaseback fee
of between $92 and $131 per week to cover private use
received $417,000 from light fleet vehicle leaseback fees.
vehicles such as registration, insurance, fuel and maintenance is covered by council, with the
leaseback fee being set at a rate to cover the privat
All staff allocated a council vehicle for commuting or private use pay a post tax (lease back)
contribution towards the benefit provided. Being post tax means every dollar paid can be used to both
offset operating costs and FBT.
Current staff contributions for private use are shown in
Table 9 - Current Staff Contributions
Vehicle Type
Lease Back Hilux/Colorado/Commodore/Aurion/Triton
Lease Back
Rav4/Forester/Corolla/Hyundai
Commuting Only
Operational On-call
Review of Light Fleet & Heavy Plant
LIGHT FLEET
An increase in car pooling can result in a lower FBT cost particularly if the use results in individual
employees receiving benefits below $300 which are exempt under the minor and infrequent rule. If
however the value of the use for employees exceeds the $300 threshold there is no benefit in pooling
for exclusive use by staff. The only other benefit that results from pooling is
that the taxable value of the benefit may not need to be reported on the employees PAYG payment
summary as a reportable fringe benefit.
Benefits Tax Impact to Organisation
Where light vehicles that attract FBT are used for a
substantial amount of work-related travel, Council
should use logbooks in accordance with Australian
Taxation Office guidelines to minimise FBT liability
noting that this will also provide invaluable information
on business use for managing the fleet.
For the purpose of FBT calculations Council note the
opportunity for low utilisation vehicles that are held for
5 years, to reduce the base value of a car by one-third
in the FBT year that starts after the car has been
owned or leased for four years.
Current Commuter and Private Use Contributions
From the background provided for this review:
“Council staff that have a vehicle provided as part of their employment package pay a leaseback fee
of between $92 and $131 per week to cover private use. For the 2014/15 financial year counc
7,000 from light fleet vehicle leaseback fees. All running costs associated with light fleet
vehicles such as registration, insurance, fuel and maintenance is covered by council, with the
leaseback fee being set at a rate to cover the private component of vehicle use.”
All staff allocated a council vehicle for commuting or private use pay a post tax (lease back)
contribution towards the benefit provided. Being post tax means every dollar paid can be used to both
Current staff contributions for private use are shown in Table 9 below.
Current Staff Contributions
CVC Staff Contributions weekly (after tax)
Hilux/Colorado/Commodore/Aurion/Triton $130.60
Rav4/Forester/Corolla/Hyundai $121.00
$22.30
$11.10
LIGHT FLEET 42
if the use results in individual
employees receiving benefits below $300 which are exempt under the minor and infrequent rule. If
however the value of the use for employees exceeds the $300 threshold there is no benefit in pooling
for exclusive use by staff. The only other benefit that results from pooling is
that the taxable value of the benefit may not need to be reported on the employees PAYG payment
Ease of Implementation
“Council staff that have a vehicle provided as part of their employment package pay a leaseback fee
financial year council
All running costs associated with light fleet
vehicles such as registration, insurance, fuel and maintenance is covered by council, with the
All staff allocated a council vehicle for commuting or private use pay a post tax (lease back)
contribution towards the benefit provided. Being post tax means every dollar paid can be used to both
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 42 of 131
As mentioned in the introduction to this section the current level of staff contributions is substantially
offsetting FBT but they are not covering FBT. To further
could increase the level of contributions across the board or take a more targeted approach and
consider applying an additional charge for “excess” private use. This would also address the higher
operating cost to council.
The light fleet survey revealed a high level of commuting/private travel by a number of staff and as
current lease back charges are based on vehicle categories there is no mechanism to recover any
additional contribution to reflect high levels
to charge an additional contribution to staff with “excess” commuting/private use kilometres. The
challenge is to define the level of usage where any excess would be triggered and at the same time
ensure fairness.
Based on our work with other clients the typical surcharge applied by leasing companies for excess
kilometres above a lease agreement is 14 cents/km.
Table 10 below shows how a lease back surcharge could be applied for excess kilometres
The base line to negate the current level of FBT is 35,000km. In other words if staff whose allocated
vehicle travelled greater than 35,000 km were levied a post tax surcharge of 14 cents per km the
additional income would offset FBT and also c
(see XL sheet V0.13)
Table 10 – Lease Back Surcharge Impact for “Excess” Kilometres
Excess Km > Income $
25,000 142,720
30,000 94,710
35,000 59,238
40,000 36,112
45,000 20,149
50,000 9,875
*Not including Call out vehicles
However, this methodology would not in our view pass a “fairness test” as staff would be penalised by
car pool use and their own business use. Any excess kilometre charges would have to be based on
private/commuting use exceeding a nominated level. Using t
11 identifies vehicles with greater than 50% commuter/private use. The table also includes actual
average annual utilisation and the estimated amount based on the survey.
Council could consider applying a
50% or some lower amount. The surcharge being applied at the rate of 14 cents/km for km exceeding
50% commuting/private use would realise an estimated additional $31,091. Applying a surcharge i
this manner is considered fairer and provides an additional incentive for high private/commuting use
staff to make their allocated vehicle available for car pool use to increase the business percentage
business use. This would conversely lower their exce
Review of Light Fleet & Heavy Plant
LIGHT FLEET
As mentioned in the introduction to this section the current level of staff contributions is substantially
offsetting FBT but they are not covering FBT. To further negate the outstanding FBT liability Council
could increase the level of contributions across the board or take a more targeted approach and
consider applying an additional charge for “excess” private use. This would also address the higher
The light fleet survey revealed a high level of commuting/private travel by a number of staff and as
current lease back charges are based on vehicle categories there is no mechanism to recover any
additional contribution to reflect high levels of commuting/private use. An option available to Council is
to charge an additional contribution to staff with “excess” commuting/private use kilometres. The
challenge is to define the level of usage where any excess would be triggered and at the same time
Based on our work with other clients the typical surcharge applied by leasing companies for excess
kilometres above a lease agreement is 14 cents/km.
below shows how a lease back surcharge could be applied for excess kilometres
The base line to negate the current level of FBT is 35,000km. In other words if staff whose allocated
vehicle travelled greater than 35,000 km were levied a post tax surcharge of 14 cents per km the
additional income would offset FBT and also contribute the same amount to reducing operating costs.
Lease Back Surcharge Impact for “Excess” Kilometres
Income $
142,720
94,710
59,238 Will negate FBT completely
36,112
20,149
9,875
*Not including Call out vehicles
However, this methodology would not in our view pass a “fairness test” as staff would be penalised by
car pool use and their own business use. Any excess kilometre charges would have to be based on
private/commuting use exceeding a nominated level. Using the results of the light fleet survey
identifies vehicles with greater than 50% commuter/private use. The table also includes actual
average annual utilisation and the estimated amount based on the survey.
Council could consider applying a surcharge for vehicles where private use kilometres exceed say
50% or some lower amount. The surcharge being applied at the rate of 14 cents/km for km exceeding
50% commuting/private use would realise an estimated additional $31,091. Applying a surcharge i
this manner is considered fairer and provides an additional incentive for high private/commuting use
staff to make their allocated vehicle available for car pool use to increase the business percentage
business use. This would conversely lower their excess private use liability.
LIGHT FLEET 43
As mentioned in the introduction to this section the current level of staff contributions is substantially
negate the outstanding FBT liability Council
could increase the level of contributions across the board or take a more targeted approach and
consider applying an additional charge for “excess” private use. This would also address the higher
The light fleet survey revealed a high level of commuting/private travel by a number of staff and as
current lease back charges are based on vehicle categories there is no mechanism to recover any
of commuting/private use. An option available to Council is
to charge an additional contribution to staff with “excess” commuting/private use kilometres. The
challenge is to define the level of usage where any excess would be triggered and at the same time
Based on our work with other clients the typical surcharge applied by leasing companies for excess
below shows how a lease back surcharge could be applied for excess kilometres travelled.
The base line to negate the current level of FBT is 35,000km. In other words if staff whose allocated
vehicle travelled greater than 35,000 km were levied a post tax surcharge of 14 cents per km the
ontribute the same amount to reducing operating costs.
However, this methodology would not in our view pass a “fairness test” as staff would be penalised by
car pool use and their own business use. Any excess kilometre charges would have to be based on
he results of the light fleet survey Table
identifies vehicles with greater than 50% commuter/private use. The table also includes actual
surcharge for vehicles where private use kilometres exceed say
50% or some lower amount. The surcharge being applied at the rate of 14 cents/km for km exceeding
50% commuting/private use would realise an estimated additional $31,091. Applying a surcharge in
this manner is considered fairer and provides an additional incentive for high private/commuting use
staff to make their allocated vehicle available for car pool use to increase the business percentage
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 43 of 131
If a surcharge is applied only to excess commuting it would unfairly penalise staff that don’t use lease
back for much more than commuting. There are other options that can achieve a similar outcome but
this relies on the vehicle not being available for car pool use.
Any increase in lease back and commuting charges to staff whether across the board or aligned to an
excess kilometre charge may have HR impacts.
RECOMMENDATION
Private Use and Fringe Benefits Tax
15. To further minimise FBT liability and light fleet
operating costs and to provide a greater incentive for
car-pooling, Council consider a surcharge of 14
cents/km where private/commuter use exceeds 50% of
annual kilometres travelled.
Review of Light Fleet & Heavy Plant
LIGHT FLEET
If a surcharge is applied only to excess commuting it would unfairly penalise staff that don’t use lease
back for much more than commuting. There are other options that can achieve a similar outcome but
not being available for car pool use.
Any increase in lease back and commuting charges to staff whether across the board or aligned to an
excess kilometre charge may have HR impacts.
Private Use and Fringe Benefits Tax Impact to Organisation
To further minimise FBT liability and light fleet
operating costs and to provide a greater incentive for
, Council consider a surcharge of 14
cents/km where private/commuter use exceeds 50% of
es travelled.
LIGHT FLEET 44
If a surcharge is applied only to excess commuting it would unfairly penalise staff that don’t use lease
back for much more than commuting. There are other options that can achieve a similar outcome but
Any increase in lease back and commuting charges to staff whether across the board or aligned to an
Ease of Implementation
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 44 of 131
Table 11 - Private Use Vehicles Exceeding 50%
Plant # Actual
Utilisation Km
Estimated Utilisation
from survey
000101.05 40,173
000102.05 47,893
000106.05 36,776
000108.05 43,377
000112.05 57,306
000114.05 39,121
000118.06 57,194
000120.05 31,148
000124.04 32,787
000151.06 47,831
000155.06 55,765
000156.04 34,100
000169.05 33,347
000176.05 47,770
000178.03 63,150
000181.04 35,298
000183.06 51,724
000185.05 37,288
000190.04 45,974
000191.05 62,696
000192.05 36,492
000197.06 35,213
000198.05 33,866
000201.06 42,341
000203.06 43,088
000205.06 30,587
000224.04 33,046
000230.05 30,147
000241.05 24,218
000505.06 45,097
000538.03 59,145
000101.05 40,173
000102.05 47,893
000106.05 36,776
000108.05 43,377
000112.05 57,306
000114.05 39,121
000118.06 57,194
000120.05 31,148
000124.04 32,787
000151.06 47,831
Estimated surcharge collected at 14 cents/km for more than
Estimated surcharge collected at 14 cents/km for more than
Estimated surcharge collected at 14 cents/km for more than
Review of Light Fleet & Heavy Plant
LIGHT FLEET
Private Use Vehicles Exceeding 50%
Estimated Utilisation rom survey
Km
% Business Use
% Commuting
% Commuting
/ Private
41,280 19% 70% 81%
76,800 50% 47% 50%
42,240 50% 23% 50%
42,240 26% 28% 74%
43,200 6% 72% 94%
24,000 40% 0% 60%
50,880 8% 82% 92%
24,000 40% 30% 60%
28,800 30% 58% 70%
43,200 39% 44% 61%
69,600 49% 37% 51%
32,160 36% 12% 64%
34,944 26% 14% 74%
142,896 13% 75% 87%
57,600 42% 50% 58%
24,000 40% 0% 60%
36,000 20% 67% 80%
34,080 14% 68% 86%
60,000 48% 48% 52%
55,200 35% 61% 65%
32,016 13% 25% 87%
29,280 20% 8% 80%
39,360 49% 39% 51%
38,400 38% 50% 63%
41,520 32% 52% 68%
24,960 48% 4% 52%
36,000 29% 0% 71%
24,576 27% 37% 73%
33,648 44% 37% 56%
40,800 47% 47% 53%
30,720 47% 47% 53%
41,280 19% 70% 81%
76,800 50% 47% 50%
42,240 50% 23% 50%
42,240 26% 28% 74%
43,200 6% 72% 94%
24,000 40% 0% 60%
50,880 8% 82% 92%
24,000 40% 30% 60%
28,800 30% 58% 70%
43,200 39% 44% 61%
Estimated surcharge collected at 14 cents/km for more than 50% private use
Estimated surcharge collected at 14 cents/km for more than 60% private use
Estimated surcharge collected at 14 cents/km for more than 70% private use
LIGHT FLEET 45
Commuting Private
Excess $ payable for over 50%
Private use
81% 1,766
50% 0
50% 0
74% 1,449
94% 3,566
60% 548
92% 3,324
60% 436
70% 918
61% 744
51% 81
64% 677
74% 1,116
87% 2,445
58% 737
60% 494
80% 2,172
86% 1,875
52% 129
65% 1,336
87% 1,903
80% 1,503
51% 58
63% 741
68% 1,063
52% 82
71% 956
73% 973
56% 201
53% 186
53% 259
81% 1,766
50% 0
50% 0
74% 1,449
94% 3,566
60% 548
92% 3,324
60% 436
70% 918
61% 744
$31,091
$17,804
$8,962
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 45 of 131
1.14. Vehicle Values to be Included in Salary Packages
Vehicle values need to be identified in salary packages to firstly ensure existing and potential new
staff are aware of the real cost of providing a motor vehicle. Management staff in particular could be
provided with a number of alternative options such as novated leasing. In order to do this it is
essential to recognise average annual vehicle values in the employment package. Refer
Section 1.5 and example of the Honda Accord Euro at $16,420.
It is recommended that vehicle package values are based on the vehicle make/model and not a set
value according to position in the organisation. This will assist in developing options to attract
employees to select lower cost vehicles with the objectives to redu
emissions. The other reason is to enable comparison with other options for providing vehicles such as
novated leasing.
Increased Vehicle Selection Flexibility for Executive and Senior Management
Senior management could be given t
own personal requirements (and at the same time meet council’s environmental objectives) and take
the balance in cash. Alternatively to upsize and take less cash.
For example a Director currently allocated a Toyota Kluger or equivalent vehicle valued at $22,401 in
their salary package, could opt to take a Toyota Orion Presara valued at $18,990 and salary sacrifice
the difference or take it in salary and pay income tax. Vice versa applies if
upsize.
Cash Out Option for Executive and Senior Management
If an employee is to be offered a cash option in lieu of provision of a fully maintained Council vehicle
then we would recommend a lesser value (say 70
provide a suitable vehicle for business use. This would compensate the employer for the cost of the
use of a pool vehicle or taxis. We estimate this could cost on average $500
addition to the running costs for a pool vehicle.
A cash out option can be particularly attractive to a staff member who lives close to the council
offices.
Where an employee does not provide a vehicle for business use this may also put pressure on the
use of other Council vehicles and c
are used by the staff member who cashed out. If the staff member is offered a lesser cash value when
a vehicle is not provided by him/her for business use then a sense of fairness is more like
experienced by other employees.
If the employee uses his/her own personal car on Council business in terms of workers compensation
insurance, there would be no change to the present position. The employee's workers compensation
would only cover him/her at work or when travelling undertaking duties directed by the employer.
Council could consider using the following policy clause where this option is taken:
Where an employee accepts cash out option in lieu of a motor vehicle the following conditi
apply: -
The employee shall arrange their own transportation:
• To commute to and from home to work
Review of Light Fleet & Heavy Plant
LIGHT FLEET
Vehicle Values to be Included in Salary Packages
Vehicle values need to be identified in salary packages to firstly ensure existing and potential new
staff are aware of the real cost of providing a motor vehicle. Management staff in particular could be
vided with a number of alternative options such as novated leasing. In order to do this it is
essential to recognise average annual vehicle values in the employment package. Refer
and example of the Honda Accord Euro at $16,420.
recommended that vehicle package values are based on the vehicle make/model and not a set
value according to position in the organisation. This will assist in developing options to attract
employees to select lower cost vehicles with the objectives to reduce vehicle costs and CO
emissions. The other reason is to enable comparison with other options for providing vehicles such as
Increased Vehicle Selection Flexibility for Executive and Senior Management
Senior management could be given the option to downsize their vehicle selection to better suite their
own personal requirements (and at the same time meet council’s environmental objectives) and take
the balance in cash. Alternatively to upsize and take less cash.
rrently allocated a Toyota Kluger or equivalent vehicle valued at $22,401 in
their salary package, could opt to take a Toyota Orion Presara valued at $18,990 and salary sacrifice
the difference or take it in salary and pay income tax. Vice versa applies if the employee chooses to
Cash Out Option for Executive and Senior Management
If an employee is to be offered a cash option in lieu of provision of a fully maintained Council vehicle
then we would recommend a lesser value (say 70-80%) be offered where the employee does not
provide a suitable vehicle for business use. This would compensate the employer for the cost of the
use of a pool vehicle or taxis. We estimate this could cost on average $500 - $1000 per annum in
a pool vehicle.
A cash out option can be particularly attractive to a staff member who lives close to the council
Where an employee does not provide a vehicle for business use this may also put pressure on the
use of other Council vehicles and could cause resentment from other staff whose allocated vehicles
are used by the staff member who cashed out. If the staff member is offered a lesser cash value when
a vehicle is not provided by him/her for business use then a sense of fairness is more like
experienced by other employees.
If the employee uses his/her own personal car on Council business in terms of workers compensation
insurance, there would be no change to the present position. The employee's workers compensation
im/her at work or when travelling undertaking duties directed by the employer.
Council could consider using the following policy clause where this option is taken:
Where an employee accepts cash out option in lieu of a motor vehicle the following conditi
The employee shall arrange their own transportation:
To commute to and from home to work
LIGHT FLEET 46
Vehicle values need to be identified in salary packages to firstly ensure existing and potential new
staff are aware of the real cost of providing a motor vehicle. Management staff in particular could be
vided with a number of alternative options such as novated leasing. In order to do this it is
essential to recognise average annual vehicle values in the employment package. Refer Table 4
recommended that vehicle package values are based on the vehicle make/model and not a set
value according to position in the organisation. This will assist in developing options to attract
ce vehicle costs and CO2
emissions. The other reason is to enable comparison with other options for providing vehicles such as
Increased Vehicle Selection Flexibility for Executive and Senior Management
he option to downsize their vehicle selection to better suite their
own personal requirements (and at the same time meet council’s environmental objectives) and take
rrently allocated a Toyota Kluger or equivalent vehicle valued at $22,401 in
their salary package, could opt to take a Toyota Orion Presara valued at $18,990 and salary sacrifice
the employee chooses to
If an employee is to be offered a cash option in lieu of provision of a fully maintained Council vehicle
re the employee does not
provide a suitable vehicle for business use. This would compensate the employer for the cost of the
$1000 per annum in
A cash out option can be particularly attractive to a staff member who lives close to the council
Where an employee does not provide a vehicle for business use this may also put pressure on the
ould cause resentment from other staff whose allocated vehicles
are used by the staff member who cashed out. If the staff member is offered a lesser cash value when
a vehicle is not provided by him/her for business use then a sense of fairness is more likely to be
If the employee uses his/her own personal car on Council business in terms of workers compensation
insurance, there would be no change to the present position. The employee's workers compensation
im/her at work or when travelling undertaking duties directed by the employer.
Council could consider using the following policy clause where this option is taken: -
Where an employee accepts cash out option in lieu of a motor vehicle the following conditions shall
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 46 of 131
• To attend to Council business when a pool vehicle is not available during normal working
hours
• To attend to out of hours meetings. commute direct
required in the course of employment
RECOMMENDATION
Vehicle Values to be Included in Salary Packages
16. Light vehicle values be included in staff salary
packages.
1.15. Options for Procuring Council Owned Light Vehicles
The main options available to procure council vehicles include:
(i) Purchase through the Local Government Procurement contract or State Government Contract
and trade the old vehicle to the new vehicle supplier;
(ii) Purchase through the Local Government Procurement contract or State Government Contract
and auction trade vehicles;
(iii) Purchasing through the tender process with an option to accept the trade price or auction the
trade vehicle using the tendered trade price as the reserve price;
In our experience best value is generally achieved through option (ii) above and this is current
practice.
1.16. Light Fleet Funding Options
(i) Capital purchase
(ii) Outsourcing through Leasing
• Fully maintained operating lease
• Standard operating lease with Council responsibility for fuel, tyres, repairs and maintenance
Leasing (Operating Lease)
The Council currently does not have any vehicles on an operating lease.
Operational Leases are similar to the finance lease with the exception that the risk of loss on sale is
born by the finance lease company and no capital is reported for the Council’s assets. Subs
this lease type carries a risk premium leading to a higher cost to the Council. However, once
agreement is made the Council does not carry any variation to their fleet capital costs. A fully
maintained operating lease includes all servicing in th
finance company or supplier takes the risk on the residual value of the item and the buyer therefore
pays for the risk.
All leases are tied to a period of ownership and budgeted utilisation for the vehicle
obtains the target utilisation within the period of ownership, the Council suffers a lost opportunity with
unused utilisation. Conversely the Council stands to attract additional costs if the budget utilisation is
exceeded. At the end of the lease term the lessee will have four alternatives:
Review of Light Fleet & Heavy Plant
LIGHT
To attend to Council business when a pool vehicle is not available during normal working
To attend to out of hours meetings. commute direct from home to a site where attendance is
required in the course of employment
Vehicle Values to be Included in Salary Packages Impact to Organisation
Light vehicle values be included in staff salary
Options for Procuring Council Owned Light Vehicles
The main options available to procure council vehicles include:
ough the Local Government Procurement contract or State Government Contract
and trade the old vehicle to the new vehicle supplier;
Purchase through the Local Government Procurement contract or State Government Contract
and auction trade vehicles;
ng through the tender process with an option to accept the trade price or auction the
trade vehicle using the tendered trade price as the reserve price;
In our experience best value is generally achieved through option (ii) above and this is current
Light Fleet Funding Options
Outsourcing through Leasing
Fully maintained operating lease
Standard operating lease with Council responsibility for fuel, tyres, repairs and maintenance
Leasing (Operating Lease)
currently does not have any vehicles on an operating lease.
Operational Leases are similar to the finance lease with the exception that the risk of loss on sale is
born by the finance lease company and no capital is reported for the Council’s assets. Subs
this lease type carries a risk premium leading to a higher cost to the Council. However, once
agreement is made the Council does not carry any variation to their fleet capital costs. A fully
maintained operating lease includes all servicing in the cost of the lease payments. In this option the
finance company or supplier takes the risk on the residual value of the item and the buyer therefore
All leases are tied to a period of ownership and budgeted utilisation for the vehicle
obtains the target utilisation within the period of ownership, the Council suffers a lost opportunity with
unused utilisation. Conversely the Council stands to attract additional costs if the budget utilisation is
of the lease term the lessee will have four alternatives:
LIGHT FLEET 47
To attend to Council business when a pool vehicle is not available during normal working
from home to a site where attendance is
Ease of Implementation
ough the Local Government Procurement contract or State Government Contract
Purchase through the Local Government Procurement contract or State Government Contract
ng through the tender process with an option to accept the trade price or auction the
In our experience best value is generally achieved through option (ii) above and this is current
Standard operating lease with Council responsibility for fuel, tyres, repairs and maintenance
Operational Leases are similar to the finance lease with the exception that the risk of loss on sale is
born by the finance lease company and no capital is reported for the Council’s assets. Subsequently,
this lease type carries a risk premium leading to a higher cost to the Council. However, once
agreement is made the Council does not carry any variation to their fleet capital costs. A fully
e cost of the lease payments. In this option the
finance company or supplier takes the risk on the residual value of the item and the buyer therefore
All leases are tied to a period of ownership and budgeted utilisation for the vehicle. Unless the vehicle
obtains the target utilisation within the period of ownership, the Council suffers a lost opportunity with
unused utilisation. Conversely the Council stands to attract additional costs if the budget utilisation is
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 47 of 131
• Upgrade or replace with a new vehicle
• Extend the rental period
• Return the vehicle with no further payments required (conditions apply)
• Purchase the vehicle at a market price
Leasing (Operating lease) of light vehicles is generally not recommended due to the risk of penalties
for over utilisation and effectively “overpayment” for underutilisation. If there is a shortage of capital it
is preferable to lease major items of plant with predictable utilis
Purchase Versus Operating Lease Comparison
Table 12 provides an “apples for apples” comparison of lease versus ownership (purchase) for a
range of vehicles. Based on current low interest rates and if micro managed internally, leasing can
provide a competitive cost effective option. However, leasing of light vehicles is generally not
recommended due to the difficulty in managing varying utilisation and the inherent risk of penalties for
over utilisation and effectively “overpayment” for underutilisati
The average cost of overrunning a lease is $0.14/km however to underrun a lease by comparison is
on average of $0.20 -$0.30/km in lost opportunity. For example a lease on a RAV4 for 150,000
(Average 30,000 km/yr) would cost $33,900 over 5 years or
120,000 km the organisation will still pay $33,900 which represents a lost opportunity cost of $6,780
over the life of the vehicle.
If there is a shortage of capital it is preferable to lease major items of plant wit
The pros and cons of each option are summarised in
TABLE 12 –Lease versus Purchase (Based on 5 years/150,000kms and an average
30,000km/yr)
Vehicle Make / Model
Toyota Camry Atara S
Toyota Camry Hybrid
Volkswagen Tiguan
Holden Captiva SX 7ST(Diesel)
Nissan X Trail (Diesel)
Subaru Forester (Petrol)
Toyota RAV 4 (4x2)
Nissan X Trail (4x2) Diesel
Utilities 4x4 Crew Cab
Ford Ranger XLT DT
Holden Colorado LX RC DT
Mitsubishi Triton GLX DT
Toyota Hilux SR DT
Review of Light Fleet & Heavy Plant
LIGHT FLEET
Upgrade or replace with a new vehicle
Extend the rental period
Return the vehicle with no further payments required (conditions apply)
Purchase the vehicle at a market price
e) of light vehicles is generally not recommended due to the risk of penalties
for over utilisation and effectively “overpayment” for underutilisation. If there is a shortage of capital it
is preferable to lease major items of plant with predictable utilisation.
Purchase Versus Operating Lease Comparison
provides an “apples for apples” comparison of lease versus ownership (purchase) for a
range of vehicles. Based on current low interest rates and if micro managed internally, leasing can
ompetitive cost effective option. However, leasing of light vehicles is generally not
recommended due to the difficulty in managing varying utilisation and the inherent risk of penalties for
over utilisation and effectively “overpayment” for underutilisation.
The average cost of overrunning a lease is $0.14/km however to underrun a lease by comparison is
$0.30/km in lost opportunity. For example a lease on a RAV4 for 150,000
km/yr) would cost $33,900 over 5 years or $0.226/km. If the vehicle only travels
km the organisation will still pay $33,900 which represents a lost opportunity cost of $6,780
If there is a shortage of capital it is preferable to lease major items of plant with predictable utilisation.
The pros and cons of each option are summarised in Table 13.
Lease versus Purchase (Based on 5 years/150,000kms and an average
Cyl Annual Cost owned
4 $8,875
4 $7,888
4 $9,356
Holden Captiva SX 7ST(Diesel) 4 $10,295
4 $7,305
4 $6,870
4 $9,177
4 $8,024
4 $9,996
4 $9,652
4 $9,338
4 $9,441
LIGHT FLEET 48
e) of light vehicles is generally not recommended due to the risk of penalties
for over utilisation and effectively “overpayment” for underutilisation. If there is a shortage of capital it
provides an “apples for apples” comparison of lease versus ownership (purchase) for a
range of vehicles. Based on current low interest rates and if micro managed internally, leasing can
ompetitive cost effective option. However, leasing of light vehicles is generally not
recommended due to the difficulty in managing varying utilisation and the inherent risk of penalties for
The average cost of overrunning a lease is $0.14/km however to underrun a lease by comparison is
$0.30/km in lost opportunity. For example a lease on a RAV4 for 150,000 km
$0.226/km. If the vehicle only travels
km the organisation will still pay $33,900 which represents a lost opportunity cost of $6,780
h predictable utilisation.
Lease versus Purchase (Based on 5 years/150,000kms and an average
Lease cost
$6,204
$6,324
$9,120
$8,976
$9,468
$8,676
$6,780
$9,468
$9,000
$9,600
$8,640
$9,060
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 48 of 131
Table 13 – Own or Lease?
Organisation Owns Vehicle
Positive
• Can deal with varying utilisation
• Has complete control over the vehicle
• Can choose to maintain under a Service Level Agreement (SLA) externally OR internally
• Maintenance is normally well controlled
Positive
• No requirement to provide capital funds for replacement
• Scheduled maintenance included
• No risk on the residual value
RECOMMENDATION
Own or Lease?
17. The Council continues to own rather than lease light
vehicles.
1.17. Options for Provision of Vehicles (Other than Council Owned or
Leased)
There are 3 main options available to Council and these require provision of a car
• Novated lease
• Staff member provides their own vehicle
• Cash out with no vehicle
Each of these options takes away the need to provide for the capital cost of a vehicle and they will
also remove the environmental impact from the Council’s o
these options is inclusion of the real cost of providing a council owned vehicle in salary packages. For
the purpose of discussion we will call this a Car Allowance.
Novated Lease
Organisation packages the car costs
of the lease.
Review of Light Fleet & Heavy Plant
LIGHT FLEET
Organisation Owns Vehicle
Negative
Can deal with varying utilisation
Has complete control over the
Can choose to maintain under a Service Level Agreement (SLA)
Maintenance is normally well
• Ties up capital
• Difficult to estimate true cost of ownership
• FBT paid by the organisation (if there is no leaseback)
Operating Lease
Negative
No requirement to provide capital
Scheduled maintenance included
the residual value
• Over or underutilisation costs
• Maintenance failures not recorded or controlled
• Scheduled maintenance is difficult to control
• FBT paid by the organisation (if there is no leaseback)
• Refurbishment cost of vehicle on return
Impact to Organisation
The Council continues to own rather than lease light
Options for Provision of Vehicles (Other than Council Owned or
There are 3 main options available to Council and these require provision of a car
Staff member provides their own vehicle
Cash out with no vehicle
Each of these options takes away the need to provide for the capital cost of a vehicle and they will
also remove the environmental impact from the Council’s operations. Paramount to the take up of
these options is inclusion of the real cost of providing a council owned vehicle in salary packages. For
the purpose of discussion we will call this a Car Allowance.
Organisation packages the car costs by novating an operating lease and driver pays the FBT as part
LIGHT FLEET 49
Difficult to estimate true cost of
FBT paid by the organisation (if there
costs
Maintenance failures not recorded or
Scheduled maintenance is difficult to
FBT paid by the organisation (if there
Refurbishment cost of vehicle on
Ease of Implementation
Options for Provision of Vehicles (Other than Council Owned or
There are 3 main options available to Council and these require provision of a car allowance include:
Each of these options takes away the need to provide for the capital cost of a vehicle and they will
perations. Paramount to the take up of
these options is inclusion of the real cost of providing a council owned vehicle in salary packages. For
by novating an operating lease and driver pays the FBT as part
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 49 of 131
Under a Novated Lease the vehicle is registered in the name of the council but through a lease
novation agreement belongs to the employee. Because the ATO require this type of lea
the maintenance and running costs for the vehicle, these costs are included in the lease (post tax
payments) and the service is provided by the lease company.
The onus of responsibility is placed on the employee once the novation is signed.
protected at all times by the novation agreement and by indemnities provided by the employee at the
time they enter into the lease. The employee meets all associated costs including the FBT from their
gross pay. Should the employee leave,
lease become the responsibility of the employee.
While the leasing option provides benefits, the difficulty is in obtaining agreement for use of these
vehicles by other staff during work hours.
lease vehicles.
By adopting total vehicle costs in the salary package, a novated lease is a viable option for staff.
Offering a Novated Lease as an option to senior staff
vehicle has significant advantages in staff attraction and retention. Council is also placed at an
advantage in not having to provide funding for capital replacement.
Where the novated lease is an option taken in lieu of an existing Cou
make their leased vehicle available at all times for their business use without any additional payments
from Council or access to the Council’s car pool.
Associated Lease
An Associate Lease is an agreement where an associate
partner), leases an existing or replacement car to the employee’s employer. The employer then
provides the car to the employee via a pre tax
most of the vehicles operating costs from their pre tax salary as a salary sacrifice arrangement.
The associate usually has a lower income than the employee. So after the associate claims
depreciation and car loan interest
minimal or zero.
The cars operating costs (fuel, insurance et
may also be GST savings, depending on how the lease is structured.
results in tax savings for the employee.
age limit.
The downside of an Associated Lease
company, the partner, and the employee.
individual employee our concern is
disagreement arise between the related parties.
Council is advised to seek professional advice
Lease be considered. If approved the car supplied must meet all the guidelines of the council fleet
policy covering individuals using their own cars for Council business
Review of Light Fleet & Heavy Plant
LIGHT FLEET
Under a Novated Lease the vehicle is registered in the name of the council but through a lease
novation agreement belongs to the employee. Because the ATO require this type of lea
the maintenance and running costs for the vehicle, these costs are included in the lease (post tax
payments) and the service is provided by the lease company.
The onus of responsibility is placed on the employee once the novation is signed.
protected at all times by the novation agreement and by indemnities provided by the employee at the
time they enter into the lease. The employee meets all associated costs including the FBT from their
gross pay. Should the employee leave, or the end of the lease term is reached, the full terms of the
lease become the responsibility of the employee.
While the leasing option provides benefits, the difficulty is in obtaining agreement for use of these
vehicles by other staff during work hours. Car pool use would be out of the question for novated
By adopting total vehicle costs in the salary package, a novated lease is a viable option for staff.
Offering a Novated Lease as an option to senior staff who wants the flexibility of choosing their own
vehicle has significant advantages in staff attraction and retention. Council is also placed at an
advantage in not having to provide funding for capital replacement.
Where the novated lease is an option taken in lieu of an existing Council vehicle the employee must
make their leased vehicle available at all times for their business use without any additional payments
from Council or access to the Council’s car pool.
An Associate Lease is an agreement where an associate of the employee (typically spouse or
partner), leases an existing or replacement car to the employee’s employer. The employer then
provides the car to the employee via a pre tax salary sacrifice arrangement. The employee
ting costs from their pre tax salary as a salary sacrifice arrangement.
The associate usually has a lower income than the employee. So after the associate claims
depreciation and car loan interest, if any, the associate’s taxation liability from the le
The cars operating costs (fuel, insurance etc) are paid for in pre tax salary by the employee.
may also be GST savings, depending on how the lease is structured. The pre tax salary sacrifice
employee. Unlike a Novated Lease, an Associate lease has
downside of an Associated Lease is the organisation is dealing with three parties
company, the partner, and the employee. While the lease arrangement may well
employee our concern is the potential complications for Council particularly should
between the related parties.
eek professional advice and clarification from the ATO should an Asso
If approved the car supplied must meet all the guidelines of the council fleet
policy covering individuals using their own cars for Council business.
LIGHT FLEET 50
Under a Novated Lease the vehicle is registered in the name of the council but through a lease
novation agreement belongs to the employee. Because the ATO require this type of lease to include
the maintenance and running costs for the vehicle, these costs are included in the lease (post tax
The onus of responsibility is placed on the employee once the novation is signed. The employer is
protected at all times by the novation agreement and by indemnities provided by the employee at the
time they enter into the lease. The employee meets all associated costs including the FBT from their
or the end of the lease term is reached, the full terms of the
While the leasing option provides benefits, the difficulty is in obtaining agreement for use of these
Car pool use would be out of the question for novated
By adopting total vehicle costs in the salary package, a novated lease is a viable option for staff.
choosing their own
vehicle has significant advantages in staff attraction and retention. Council is also placed at an
ncil vehicle the employee must
make their leased vehicle available at all times for their business use without any additional payments
of the employee (typically spouse or
partner), leases an existing or replacement car to the employee’s employer. The employer then
The employee pays for
ting costs from their pre tax salary as a salary sacrifice arrangement.
The associate usually has a lower income than the employee. So after the associate claims
if any, the associate’s taxation liability from the lease rentals is
) are paid for in pre tax salary by the employee. There
The pre tax salary sacrifice
Unlike a Novated Lease, an Associate lease has no car
is the organisation is dealing with three parties - the lease
arrangement may well be beneficial to the
particularly should a
should an Associated
If approved the car supplied must meet all the guidelines of the council fleet
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 50 of 131
Cash Out Option
If an employee is to be offered a cash option in lieu of pr
then we would recommend a lesser value say 70% be offered where the employee does not provide a
suitable vehicle for business use. This would compensate the employer for the cost of the use of a
pool vehicle or taxis. We estimate this could cost on average $500
the running costs for a pool vehicle.
Where an employee does not provide a vehicle for business use this may also put pressure on the
use of other council vehicles and cou
are used by the staff member who cashed out. If the staff member is offered a lesser cash value then
a sense of fairness is more likely to be experienced by other employees.
The productivity of the employee taking this option may be affected were they to use public transport
to undertake their normal council duties.
Where an employee accepts a “cash out” option the following conditions are recommended:
The employee shall arrange their own trans
• To commute to and from home to work
• To attend to council business when a car pool vehicle is not available during normal working
hours
• To attend to out of hours meetings. commute direct from home to a site where attendance is
required in the course of employment
Staff providing their own Vehicle for Council Business Use
A further option is for the staff member to take the full amount of the package value of the vehicle in
cash or salary sacrifice and supply their own vehicle. If such a request is
should meet all the guidelines for a Council vehicle including:
• Less than 5 years old
• Regularly serviced as per manufacturers guidelines and service records kept
• Business use noted on the insurance certificate
Note that under this scenario all of the costs of owning and operating the vehicle for business and
private use are the responsibility of the employee and a vehicle provided under these circumstances
would not be available for use by other staff.
Discussion on Private Use Ve
In summary there are only 2 scenarios that should be considered.
Scenario 1 - Organisation Owns Vehicle
Use private use contributions to reduce FBT and fleet operating costs
• FBT is the most expensive component of a company supplied vehicle
• FBT can offset by private use contributions (lease back)
Review of Light Fleet & Heavy Plant
LIGHT FLEET
If an employee is to be offered a cash option in lieu of provision of a fully maintained council vehicle
then we would recommend a lesser value say 70% be offered where the employee does not provide a
suitable vehicle for business use. This would compensate the employer for the cost of the use of a
taxis. We estimate this could cost on average $500 - $1000 per annum in addition to
the running costs for a pool vehicle.
Where an employee does not provide a vehicle for business use this may also put pressure on the
use of other council vehicles and could cause resentment from other staff whose allocated vehicles
are used by the staff member who cashed out. If the staff member is offered a lesser cash value then
a sense of fairness is more likely to be experienced by other employees.
the employee taking this option may be affected were they to use public transport
to undertake their normal council duties.
Where an employee accepts a “cash out” option the following conditions are recommended:
The employee shall arrange their own transportation:
To commute to and from home to work
To attend to council business when a car pool vehicle is not available during normal working
To attend to out of hours meetings. commute direct from home to a site where attendance is
rse of employment
their own Vehicle for Council Business Use
A further option is for the staff member to take the full amount of the package value of the vehicle in
cash or salary sacrifice and supply their own vehicle. If such a request is to be granted the vehicle
should meet all the guidelines for a Council vehicle including:
Regularly serviced as per manufacturers guidelines and service records kept
Business use noted on the insurance certificate
s scenario all of the costs of owning and operating the vehicle for business and
private use are the responsibility of the employee and a vehicle provided under these circumstances
would not be available for use by other staff.
Discussion on Private Use Vehicles
In summary there are only 2 scenarios that should be considered.
Organisation Owns Vehicle
Use private use contributions to reduce FBT and fleet operating costs
FBT is the most expensive component of a company supplied vehicle
offset by private use contributions (lease back)
LIGHT FLEET 51
ovision of a fully maintained council vehicle
then we would recommend a lesser value say 70% be offered where the employee does not provide a
suitable vehicle for business use. This would compensate the employer for the cost of the use of a
$1000 per annum in addition to
Where an employee does not provide a vehicle for business use this may also put pressure on the
ld cause resentment from other staff whose allocated vehicles
are used by the staff member who cashed out. If the staff member is offered a lesser cash value then
the employee taking this option may be affected were they to use public transport
Where an employee accepts a “cash out” option the following conditions are recommended: -
To attend to council business when a car pool vehicle is not available during normal working
To attend to out of hours meetings. commute direct from home to a site where attendance is
A further option is for the staff member to take the full amount of the package value of the vehicle in
to be granted the vehicle
Regularly serviced as per manufacturers guidelines and service records kept
s scenario all of the costs of owning and operating the vehicle for business and
private use are the responsibility of the employee and a vehicle provided under these circumstances
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 51 of 131
• Level of contributions has HR implications
Example calculation
• An average car will cost $33,000
• FBT @ 20% = $6600
• Lease back contribution to offset FBT = $127 + GST/week
• This payment will also contribute
• The average $33,000 car costs approx $18,000 a year including FBT to run 20,000km/yr.
• $18,000 – Contributions $6,600 = $11,400
• Cost to organisation = $4,800 per/
Table 14 – Organisation Owns Vehicle
Positive
• The vehicle is available for pool use
• The organisation has complete control over vehicle choice
• If the vehicle is used for pool use the FBT does not appear on the employees group certificate
Scenario 2 - Annual Vehicle Allowance in Lieu of Council Vehicle
• Calculate annual costs and include in employee salary package
• Provides more options for employees and employer
Example calculation
• $18,000 car allowance
• Employee earns $100,000 plus $18,000 car
• Take home after tax $7,020 of their car allowance what can they get for $7,020
• Post tax (and after factoring in a tax deduction based on a 20% business use) the employee
would have $12,384 to spend on vehicle expenses each year
• For a car travelling 20,000km/yr fuel costs = approx $3,100 a year
• What can be leased (operating lease) for $9,300 inc GST
• Toyota Camry Altise $6,600
• Holden Captiva SX $9,240
• Ford Territory Diesel 2WD $10,164
Review of Light Fleet & Heavy Plant
LIGHT FLEET
Level of contributions has HR implications
An average car will cost $33,000
Lease back contribution to offset FBT = $127 + GST/week
This payment will also contribute $6600 towards the operating cost of the car.
The average $33,000 car costs approx $18,000 a year including FBT to run 20,000km/yr.
Contributions $6,600 = $11,400 – there is NO FBT so deduct another $6,600.
Cost to organisation = $4,800 per/yr.
Organisation Owns Vehicle
Negative
The vehicle is available for pool use
The organisation has complete control over vehicle choice
If the vehicle is used for pool use the FBT does not appear on the employees group certificate
• Costs are difficult to control
• Employees tend to take less care of the vehicle
• There is always conflict regarding the choice of vehicle
• Little or no control over the total private utilisation (depends where employee lives and extent of private use)
Annual Vehicle Allowance in Lieu of Council Vehicle
Calculate annual costs and include in employee salary package
Provides more options for employees and employer
Employee earns $100,000 plus $18,000 car allowance.
Take home after tax $7,020 of their car allowance what can they get for $7,020
Post tax (and after factoring in a tax deduction based on a 20% business use) the employee
would have $12,384 to spend on vehicle expenses each year
travelling 20,000km/yr fuel costs = approx $3,100 a year
What can be leased (operating lease) for $9,300 inc GST
Toyota Camry Altise $6,600
Holden Captiva SX $9,240
Ford Territory Diesel 2WD $10,164
LIGHT FLEET 52
$6600 towards the operating cost of the car.
The average $33,000 car costs approx $18,000 a year including FBT to run 20,000km/yr.
there is NO FBT so deduct another $6,600.
Costs are difficult to control
Employees tend to take less care of the
There is always conflict regarding the
Little or no control over the total private utilisation (depends where employee lives and extent of private use)
Take home after tax $7,020 of their car allowance what can they get for $7,020
Post tax (and after factoring in a tax deduction based on a 20% business use) the employee
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 52 of 131
Above figures obtained from a Uniqco lease survey
Table 15 – Car Allowance
Positive
• The true value of the vehicle is understood
• The employee has a number of choices
� Cash out (eg 70-allowance)
� Provide their own vehicle
� Novated lease
� Hire purchase
� Take a council vehicle
A further option is for the staff member to take the full amount of the package value of the vehicle (car
allowance) in cash or salary sacrifice and supply their own vehicle. If such a request is to be granted
the vehicle should meet all the guidelines for a Company vehicl
• Less than 5 years old
• Regularly serviced as per manufacturers guidelines and service records kept
• Business use noted on the insurance certificate
In this situation all of the costs of owning and operating the vehicle for business and private use are
the responsibility of the employee and a vehicle provided under these circumstances would not be
available for use by other staff.
It should be noted that where an employee receives a car allowance within his or her salary and uses
that car to travel to work and to meetings, in the eyes of the law it is part of the company fleet. In the
eyes of most fleet managers it probably isn’t.
Reducing the number of council owned vehicles reduces the effective ‘car pool’ for general staff
transport. The Council already operates at least 5 dedicated pool vehicles and taking out
Executive/Managers vehicles plus ensuring all council owned vehicles are made available for pool
use should minimise any impact.
RECOMMENDATION
Car Allowance
18. Subject to the staff vehicle not being required for car
pool use the Council offer a Car Allowance option to
senior staff on the proviso that the employee must
provide their own vehicle for their business use without
any additional payments from Council
1.18. Improved Light Fleet Reporting
This is addressed in Section 4 of the report.
Review of Light Fleet & Heavy Plant
LIGHT FLEET
Above figures obtained from a Uniqco lease survey
Negative
The true value of the vehicle is
The employee has a number of
-80% of
Provide their own vehicle
Take a council vehicle
• Establishing a fair value to provide for a vehicle
• Vehicle not available for car pool use
• Can appear too complicated for employees
• Employees providing their own car may to try to use Council vehicles for business
• By law it is still part of the company fleet
is for the staff member to take the full amount of the package value of the vehicle (car
allowance) in cash or salary sacrifice and supply their own vehicle. If such a request is to be granted
the vehicle should meet all the guidelines for a Company vehicle:
Regularly serviced as per manufacturers guidelines and service records kept
Business use noted on the insurance certificate
In this situation all of the costs of owning and operating the vehicle for business and private use are
the responsibility of the employee and a vehicle provided under these circumstances would not be
It should be noted that where an employee receives a car allowance within his or her salary and uses
ork and to meetings, in the eyes of the law it is part of the company fleet. In the
eyes of most fleet managers it probably isn’t.
Reducing the number of council owned vehicles reduces the effective ‘car pool’ for general staff
already operates at least 5 dedicated pool vehicles and taking out
Executive/Managers vehicles plus ensuring all council owned vehicles are made available for pool
use should minimise any impact.
Impact to Organisation
Subject to the staff vehicle not being required for car
pool use the Council offer a Car Allowance option to
senior staff on the proviso that the employee must
provide their own vehicle for their business use without
s from Council.
Improved Light Fleet Reporting
This is addressed in Section 4 of the report.
LIGHT FLEET 53
value to provide
Vehicle not available for car pool use
Can appear too complicated for
Employees providing their own car may to try to use Council vehicles for
By law it is still part of the company
is for the staff member to take the full amount of the package value of the vehicle (car
allowance) in cash or salary sacrifice and supply their own vehicle. If such a request is to be granted
Regularly serviced as per manufacturers guidelines and service records kept
In this situation all of the costs of owning and operating the vehicle for business and private use are
the responsibility of the employee and a vehicle provided under these circumstances would not be
It should be noted that where an employee receives a car allowance within his or her salary and uses
ork and to meetings, in the eyes of the law it is part of the company fleet. In the
Reducing the number of council owned vehicles reduces the effective ‘car pool’ for general staff
already operates at least 5 dedicated pool vehicles and taking out
Executive/Managers vehicles plus ensuring all council owned vehicles are made available for pool
Ease of Implementation
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 53 of 131
1.19. Training
This is addressed in Section 4 of the report.
1.20. Organisational Realignment of Fleet & Plant Management
Responsibility
This is addressed in Section 4 of the report.
1.21. Light Fleet Summary Actions
� Ensure vehicle specifications meet business use requirements and only include optional
extras that add to resale value.
� Set minimum acceptance standards for ANCAP Safety Rating and Vehicle Green Guide
Rating.
� Establish vehicle selection criteria and allocate weightings (suggested) for a best value
outcome – Whole of Life Cost (80%), Safety (10%) and Environmental impact (10%).
� Use the IPWEA online Light Fleet Selection model for a whole of life cost comparison of up to
9 vehicles that meet business use requirements and minimum acceptance standards. Charts
will compare the average annual whole of life cost of each vehicle each ye
the associated output table will rank the vehicles on best value.
� Choose from the highest ranked vehicles and use the IPWEA charts to counter any staff
challenges.
� Hold the vehicle for a period of 5 years or up to 150,000km (whichever oc
minimise loss of value in resale. Irrespective of
longer (up to 5 years) will reduce annual ownership costs. High utilisation vehicles can be
held up to 150,000km with little risk
� Purchase roadside assistance for the full 5 years.
� Apply private use contributions (lease back) for private/commuting use vehicles that attract
FBT with a minimum contribution to offset the FBT value.
contributions or a vehicle allowance
� Consider applying an “excess” for high commuting/private use drivers to offset additional
operating costs and encourage greater car pool use.
� Offer a vehicle allowance in lieu of a car for staff whose vehicle is not required for car pool
use. Allowance allows st
opens the door to staff providing their own supplied vehicle including a Novated lease.
� Ensure vehicle policy includes all rules regarding staff supplying their own vehicles where this
option is available.
Our light fleet recommendations, if implemented, have the potential to improve both pooled vehicle
arrangements and salary packaging for employees.
Review of Light Fleet & Heavy Plant
LIGHT FLEET
This is addressed in Section 4 of the report.
Realignment of Fleet & Plant Management
This is addressed in Section 4 of the report.
Light Fleet Summary Actions
Ensure vehicle specifications meet business use requirements and only include optional
extras that add to resale value.
nimum acceptance standards for ANCAP Safety Rating and Vehicle Green Guide
Establish vehicle selection criteria and allocate weightings (suggested) for a best value
Whole of Life Cost (80%), Safety (10%) and Environmental impact (10%).
Use the IPWEA online Light Fleet Selection model for a whole of life cost comparison of up to
9 vehicles that meet business use requirements and minimum acceptance standards. Charts
will compare the average annual whole of life cost of each vehicle each ye
the associated output table will rank the vehicles on best value.
Choose from the highest ranked vehicles and use the IPWEA charts to counter any staff
Hold the vehicle for a period of 5 years or up to 150,000km (whichever oc
minimise loss of value in resale. Irrespective of make or model holding on to the vehicle
longer (up to 5 years) will reduce annual ownership costs. High utilisation vehicles can be
held up to 150,000km with little risk.
sistance for the full 5 years.
Apply private use contributions (lease back) for private/commuting use vehicles that attract
FBT with a minimum contribution to offset the FBT value. Offset FBT by either Leaseback
contributions or a vehicle allowance
r applying an “excess” for high commuting/private use drivers to offset additional
operating costs and encourage greater car pool use.
Offer a vehicle allowance in lieu of a car for staff whose vehicle is not required for car pool
use. Allowance allows staff choice and the organisation has more control over cost. This
opens the door to staff providing their own supplied vehicle including a Novated lease.
Ensure vehicle policy includes all rules regarding staff supplying their own vehicles where this
Our light fleet recommendations, if implemented, have the potential to improve both pooled vehicle
arrangements and salary packaging for employees.
LIGHT FLEET 54
Realignment of Fleet & Plant Management
Ensure vehicle specifications meet business use requirements and only include optional
nimum acceptance standards for ANCAP Safety Rating and Vehicle Green Guide
Establish vehicle selection criteria and allocate weightings (suggested) for a best value
Whole of Life Cost (80%), Safety (10%) and Environmental impact (10%).
Use the IPWEA online Light Fleet Selection model for a whole of life cost comparison of up to
9 vehicles that meet business use requirements and minimum acceptance standards. Charts
will compare the average annual whole of life cost of each vehicle each year for 5 years and
Choose from the highest ranked vehicles and use the IPWEA charts to counter any staff
Hold the vehicle for a period of 5 years or up to 150,000km (whichever occurs first) to
holding on to the vehicle
longer (up to 5 years) will reduce annual ownership costs. High utilisation vehicles can be
Apply private use contributions (lease back) for private/commuting use vehicles that attract
Offset FBT by either Leaseback
r applying an “excess” for high commuting/private use drivers to offset additional
Offer a vehicle allowance in lieu of a car for staff whose vehicle is not required for car pool
aff choice and the organisation has more control over cost. This
opens the door to staff providing their own supplied vehicle including a Novated lease.
Ensure vehicle policy includes all rules regarding staff supplying their own vehicles where this
Our light fleet recommendations, if implemented, have the potential to improve both pooled vehicle
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 54 of 131
2. PLANT & HEAVY VEHICL
2.1. Key deliverables
A detailed review of Clarence Valley Council’s existing heavy plant asset base identifying aspects and
areas where changes and improvements can occur.
The review is to:
• Identify the best options for possession of heavy plant (i.e. purchase vs lease), and
size of the asset base.
• Review Council policies, procedures and protocols related to heavy plant.
• Examine heavy plant age and utilisation against industry benchmarks, including:
o Cost of under utilisation
o Cost of vehicles travelling excess km’s
• Review current internal hire rates for heavy plant and make recommendations for
improvements.
• Investigate value add opportunities:
o Process for optimising fleet & plant utilisation
o Improved fleet and plant reporting
o Training
o Cost reduction opportunities
o Organisational realignment of fleet & plant management responsibility
o Detailed fleet and plant intelligence
o Trend data
o Improved risk management (covering issues related to environmental, safety and
social risks).
o Outsourcing options.
o Optimal 10 year heavy
• Provide Asset Management Plans for heavy plant assets.
The report should also contain recommendations in relation to minimising whole of life costs, covering
the following areas:
• Asset replacement highlighting impacts of deferrin
• Calculation of depreciation
• Purchasing, disposal and financing strategies.
Review of Light Fleet & Heavy Plant
PLANT & HEAVY VEHICL
PLANT & HEAVY VEHICLES
A detailed review of Clarence Valley Council’s existing heavy plant asset base identifying aspects and
areas where changes and improvements can occur.
Identify the best options for possession of heavy plant (i.e. purchase vs lease), and
Review Council policies, procedures and protocols related to heavy plant.
Examine heavy plant age and utilisation against industry benchmarks, including:
Cost of under utilisation
Cost of vehicles travelling excess km’s
iew current internal hire rates for heavy plant and make recommendations for
Investigate value add opportunities:
Process for optimising fleet & plant utilisation
Improved fleet and plant reporting
Cost reduction opportunities
Organisational realignment of fleet & plant management responsibility
Detailed fleet and plant intelligence
Improved risk management (covering issues related to environmental, safety and
social risks).
Outsourcing options.
Optimal 10 year heavy plant replacement program.
Provide Asset Management Plans for heavy plant assets.
The report should also contain recommendations in relation to minimising whole of life costs, covering
Asset replacement highlighting impacts of deferring replacement
Calculation of depreciation
Purchasing, disposal and financing strategies.
PLANT & HEAVY VEHICLES 55
A detailed review of Clarence Valley Council’s existing heavy plant asset base identifying aspects and
Identify the best options for possession of heavy plant (i.e. purchase vs lease), and optimal
Review Council policies, procedures and protocols related to heavy plant.
Examine heavy plant age and utilisation against industry benchmarks, including:
iew current internal hire rates for heavy plant and make recommendations for
Organisational realignment of fleet & plant management responsibility
Improved risk management (covering issues related to environmental, safety and
The report should also contain recommendations in relation to minimising whole of life costs, covering
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 55 of 131
2.2. Heavy Fleet Intelligence and Trends
The biggest change in the area of Plant and Heavy Vehicles is the introduction of On Road Chain of
Responsibility (COR) legislation and this will be followed by the impending legislation around Chain of
Responsibility maintenance requirements. The maintenance aspect is largely covered by the
workplace health and safety legislation but incorporating this into a formalised system at
on road COR will close the loop.
What does this mean?
• All organisations that own, hire or contract in functions that use plant or fleet will need a
systematic process and policy to ensure there are no breaches of COR legislation.
• Fleet Governance including reporting and detailed records will form part of the requirement to
demonstrate compliance.
• Specifications will need to be confirmed and formalised as compliant
• Procurement process will have to demonstrate best value for the organisation
• Operationally organisations will be expected to hold detailed records on compliance, training,
and reporting on risk.
• In the disposal phase there is also associated risk and this needs to be incorporated in the
process.
Resale values will continue to be low for the foreseeable future thereby
review the timing on replacement in order to amortise the depreciation over a longer period. There will
also be a need to review the business case for conti
available.
Technology changes are also going to improve productivity and make it easier and safer to operate
plant and fleet but will require a new level of training and competence in this area.
2.3. Heavy Fleet Review Pro
At the core of Uniqco’s review of heavy fleet is an assessment of the following key performance
indicators:
• Utilisation
• Optimum Replacement Points
• Whole of Life Costs
There are 4 other major key performance indicators for both heavy and light fleet m
these are related to maintenance and addressed in Section 3 Mechanical Maintenance.
• Maintenance Failure Records
• Downtime
• Scheduled Versus Unscheduled Maintenance
• Flat Labour Rates
Review of Light Fleet & Heavy Plant
PLANT & HEAVY VEHICL
Heavy Fleet Intelligence and Trends
The biggest change in the area of Plant and Heavy Vehicles is the introduction of On Road Chain of
ion and this will be followed by the impending legislation around Chain of
Responsibility maintenance requirements. The maintenance aspect is largely covered by the
workplace health and safety legislation but incorporating this into a formalised system at
All organisations that own, hire or contract in functions that use plant or fleet will need a
systematic process and policy to ensure there are no breaches of COR legislation.
nance including reporting and detailed records will form part of the requirement to
demonstrate compliance.
Specifications will need to be confirmed and formalised as compliant
Procurement process will have to demonstrate best value for the organisation
erationally organisations will be expected to hold detailed records on compliance, training,
In the disposal phase there is also associated risk and this needs to be incorporated in the
Resale values will continue to be low for the foreseeable future thereby requiring organisations
review the timing on replacement in order to amortise the depreciation over a longer period. There will
also be a need to review the business case for continued ownership where other options are
Technology changes are also going to improve productivity and make it easier and safer to operate
plant and fleet but will require a new level of training and competence in this area.
Heavy Fleet Review Process
At the core of Uniqco’s review of heavy fleet is an assessment of the following key performance
Optimum Replacement Points
There are 4 other major key performance indicators for both heavy and light fleet m
these are related to maintenance and addressed in Section 3 Mechanical Maintenance.
Maintenance Failure Records
Scheduled Versus Unscheduled Maintenance
PLANT & HEAVY VEHICLES 56
The biggest change in the area of Plant and Heavy Vehicles is the introduction of On Road Chain of
ion and this will be followed by the impending legislation around Chain of
Responsibility maintenance requirements. The maintenance aspect is largely covered by the
workplace health and safety legislation but incorporating this into a formalised system attached to the
All organisations that own, hire or contract in functions that use plant or fleet will need a
systematic process and policy to ensure there are no breaches of COR legislation.
nance including reporting and detailed records will form part of the requirement to
Procurement process will have to demonstrate best value for the organisation
erationally organisations will be expected to hold detailed records on compliance, training,
In the disposal phase there is also associated risk and this needs to be incorporated in the
requiring organisations to
review the timing on replacement in order to amortise the depreciation over a longer period. There will
nued ownership where other options are
Technology changes are also going to improve productivity and make it easier and safer to operate
plant and fleet but will require a new level of training and competence in this area.
At the core of Uniqco’s review of heavy fleet is an assessment of the following key performance
There are 4 other major key performance indicators for both heavy and light fleet management and
these are related to maintenance and addressed in Section 3 Mechanical Maintenance.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 56 of 131
2.4. Utilisation
Utilisation is the extent of use of a particular i
measured by hours worked, or distance travelled in a nominated time frame (generally the calendar
year). Knowledge of actual utilisation in kilometres or engine hours (levels and usage patterns)
enables the fleet management to:
• Service vehicles based on manufacturer's recommended service intervals (programmed
maintenance).
• Track actual use versus timesheet allocations to optimise operational requirements.
• Develop a floating replacement program to reduce co
change of plant at the optimum replacement point.
• Develop accurate budget forecasts.
Utilisation is the key to the procurement and management of the plant and vehicle fleet. Under
utilisation, low, or poor utilisation
coordination of use between work sites and operational units. It also raises the question of ownership
versus hire.
The first step in our review process is to calculate the average annual utilisati
mobile plant/vehicles and this is used to make a comparison against national benchmarks. Using
average annual utilisation provides a guide only as utilisation can vary during the life of the item and it
is important to be aware of trends
discussions with mechanical and operational staff to verify our utilisation assessment. For example an
item may be showing reasonable utilisation over its life but has dropped off in recent years o
versa. Hence we also seek data for the last year where we have reason to believe a variation is
occurring.
A number of heavy fleet items in civil works have shown a drop off in utilisation over the past 12
months. In discussions with the operational
in the type of work being undertaken (flood mitigation works) but this would not continue.
Table 16 identifies items with average annual utilisation at Clarence Valley below IPWEA national
benchmarks. While there are numerous items of plant & heavy vehicles achieving lower than national
benchmarks, the geographic layout of the municipality combined with regular flooding of low lying
areas that isolates communities creates a unique situation for which th
cannot be generally applied. There will always be cases where items are essential for the job
regardless of utilisation.
Our review process included discussions with operational managers on each item of the heavy fleet
and in particular those with lower than benchmark utilisation to identify the reason and also to explore
opportunities for potential rationalisation. Refer XL Sheet and notes in the Heavy Fleet Tab fit for
purpose column.
In summary
• There is potential to downsize a num
understand this has already been undertaken)
• In addition to the decision to dispose of a grader we recommend the change
remaining graders be extended to 12 yrs
yrs / 8,000 hrs.
Review of Light Fleet & Heavy Plant
PLANT & HEAVY VEHICL
Utilisation is the extent of use of a particular item of plant, vehicle or equipment and is usually
measured by hours worked, or distance travelled in a nominated time frame (generally the calendar
year). Knowledge of actual utilisation in kilometres or engine hours (levels and usage patterns)
fleet management to:
Service vehicles based on manufacturer's recommended service intervals (programmed
Track actual use versus timesheet allocations to optimise operational requirements.
Develop a floating replacement program to reduce costs in periods of lower activity, and
change of plant at the optimum replacement point.
Develop accurate budget forecasts.
Utilisation is the key to the procurement and management of the plant and vehicle fleet. Under
utilisation, low, or poor utilisation raises questions about operational management, including
coordination of use between work sites and operational units. It also raises the question of ownership
The first step in our review process is to calculate the average annual utilisation of each item of
mobile plant/vehicles and this is used to make a comparison against national benchmarks. Using
average annual utilisation provides a guide only as utilisation can vary during the life of the item and it
is important to be aware of trends. Without detailed data over a number of years, we rely on
discussions with mechanical and operational staff to verify our utilisation assessment. For example an
item may be showing reasonable utilisation over its life but has dropped off in recent years o
versa. Hence we also seek data for the last year where we have reason to believe a variation is
A number of heavy fleet items in civil works have shown a drop off in utilisation over the past 12
months. In discussions with the operational manager we were advised this has been due to a change
in the type of work being undertaken (flood mitigation works) but this would not continue.
identifies items with average annual utilisation at Clarence Valley below IPWEA national
While there are numerous items of plant & heavy vehicles achieving lower than national
benchmarks, the geographic layout of the municipality combined with regular flooding of low lying
areas that isolates communities creates a unique situation for which the ownership benchmarks
cannot be generally applied. There will always be cases where items are essential for the job
Our review process included discussions with operational managers on each item of the heavy fleet
lar those with lower than benchmark utilisation to identify the reason and also to explore
opportunities for potential rationalisation. Refer XL Sheet and notes in the Heavy Fleet Tab fit for
There is potential to downsize a number of gravel haulage trucks and loaders. (we
understand this has already been undertaken)
In addition to the decision to dispose of a grader we recommend the change
remaining graders be extended to 12 yrs / 10,000 hrs subject to a risk assessment beyond 8
PLANT & HEAVY VEHICLES 57
tem of plant, vehicle or equipment and is usually
measured by hours worked, or distance travelled in a nominated time frame (generally the calendar
year). Knowledge of actual utilisation in kilometres or engine hours (levels and usage patterns)
Service vehicles based on manufacturer's recommended service intervals (programmed
Track actual use versus timesheet allocations to optimise operational requirements.
sts in periods of lower activity, and
Utilisation is the key to the procurement and management of the plant and vehicle fleet. Under-
raises questions about operational management, including
coordination of use between work sites and operational units. It also raises the question of ownership
on of each item of
mobile plant/vehicles and this is used to make a comparison against national benchmarks. Using
average annual utilisation provides a guide only as utilisation can vary during the life of the item and it
. Without detailed data over a number of years, we rely on
discussions with mechanical and operational staff to verify our utilisation assessment. For example an
item may be showing reasonable utilisation over its life but has dropped off in recent years or vice
versa. Hence we also seek data for the last year where we have reason to believe a variation is
A number of heavy fleet items in civil works have shown a drop off in utilisation over the past 12
manager we were advised this has been due to a change
in the type of work being undertaken (flood mitigation works) but this would not continue.
identifies items with average annual utilisation at Clarence Valley below IPWEA national
While there are numerous items of plant & heavy vehicles achieving lower than national
benchmarks, the geographic layout of the municipality combined with regular flooding of low lying
e ownership benchmarks
cannot be generally applied. There will always be cases where items are essential for the job
Our review process included discussions with operational managers on each item of the heavy fleet
lar those with lower than benchmark utilisation to identify the reason and also to explore
opportunities for potential rationalisation. Refer XL Sheet and notes in the Heavy Fleet Tab fit for
ber of gravel haulage trucks and loaders. (we
In addition to the decision to dispose of a grader we recommend the change-over of the
assessment beyond 8
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 57 of 131
• There is potential to dispose of a skid steer loader and increase the utilisation of other such
loaders with shared use.
• A business case review be undertaken for 2 rollers and 4 mowers
• Always base a business case review on actual utilisation (Kilometres or Engine Hours) and
not on timesheet hours
Service delivery options for heavy plant assets are buy, hire or contract out construction and
maintenance activities. Our business case templ
hire decision and the step by step process checklist is included at the end of this section. Contracting
out is a decision driven more by in
in the Fleet Asset Management Plan.
Review of Light Fleet & Heavy Plant
PLANT & HEAVY VEHICL
There is potential to dispose of a skid steer loader and increase the utilisation of other such
loaders with shared use.
A business case review be undertaken for 2 rollers and 4 mowers
Always base a business case review on actual utilisation (Kilometres or Engine Hours) and
Service delivery options for heavy plant assets are buy, hire or contract out construction and
Our business case template is provided in Appendix 4 addresses the own or
hire decision and the step by step process checklist is included at the end of this section. Contracting
out is a decision driven more by in-house capability/capacity and cost and is addressed in more deta
in the Fleet Asset Management Plan.
PLANT & HEAVY VEHICLES 58
There is potential to dispose of a skid steer loader and increase the utilisation of other such
Always base a business case review on actual utilisation (Kilometres or Engine Hours) and
Service delivery options for heavy plant assets are buy, hire or contract out construction and
addresses the own or
hire decision and the step by step process checklist is included at the end of this section. Contracting
house capability/capacity and cost and is addressed in more detail
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 58 of 131
Table 16 - Low Utilisation Compared to National Benchmarks
Item Details A
ss
et
Nu
mb
er
Ma
ke
Mo
de
l
001300.02 Mitsubishi
FM67001301.02 Fuso
001310.02 Mitsubishi
001311.02 Mitsubishi
001308.02 Mitsubishi FM65FL
001309.02 Mitsubishi
001515.02 Mitsubishi FK65
001000.02 Scania G440
001016.01 Scania
001302.02 Mitsubishi FM67
001312.02 Mitsubishi
002203.02 Midland Industries
TAG TRAILER
003001.02 Cat
Grader
003003.02 John Deere
003007.02 Cat
003009.02 John Deere
003008.02 John Deere
003010.02 Cat
003200.01 Hitachi LX100
003201.02 Komatsu WA320 PZ-6003202.02 Komatsu
003203.02 Komatsu WA250 PZ-6
003204.02 Komatsu
003205.02 Komatsu
003208.01 Komatsu WA100
003300.02 John Deere Skid Steer Loader
003302.02 Cat Track Loader
003411.02 Komatsu Wb97r
003707.02 Cat Vibrating Roller
Review of Light Fleet & Heavy Plant
PLANT & HEAVY VEHICL
Low Utilisation Compared to National Benchmarks
Utilisation
Mo
de
l
Ap
pli
ca
tio
n
Av
e A
nn
ua
l U
tili
sa
tio
n
Uti
lis
ati
on
2
01
4-1
5
* N
ati
on
al
Be
nc
hm
ark
FM67
Gravel Haulage
14,323 22,151 35,000
8,813 8,665 35,000
13,567 11,535 35,000
16,815 16,401 35,000
FM65FL 10,881 10,222 20,000
11,878 10,914 20,000
FK65 Gravel/Sand Haulage
9,592 5,122 20,000
G440 Gravel Haulage/ Plant Trailer
26,897 27,382 35,000
21,050 25,381 35,000
FM67
Gravel Haulage/ Drop in water tank
13,992 6,807 35,000
Gravel Mulch Tree Limbs
11,751 7,906 35,000
TAG TRAILER
Plant Haulage 3,579 4,764 10,000
Grader
Mtce Grading Crew
789 776 1,000
749 779 1,000
Const Grading Crew
480 364 1,000
834 806 1,000
Const / Mtce Grading Crew
558 472 1,000
623 398 1,000
LX100
Gravel Loading
376 259
WA320 6
196 93
330 332
WA250 6
321 258
368 297
394 308
WA100-6 264 208
Skid Steer Loader
Mtce Water Cycle 214 204
Track Loader
Mtce/Const/ Drainage
297 318
Wb97r-5 Mtce Water Cycle 176 140
Vibrating Roller
Mtce Heavy Patch Crew
162 13
PLANT & HEAVY VEHICLES 59
Be
nc
hm
ark
U
tili
sa
tio
n
Co
mm
en
ts
on
Uti
lis
ati
on
35,000 Downsize Potential?
35,000 Downsize Potential?
35,000 Downsize Potential?
35,000 Drop in tank ok
20,000 Tows trailer ok
20,000 Downsize Potential?
20,000 Drop 14/15
35,000 Float trailer ok
35,000 Tows excavator ok
35,000 Downsize Potential?
35,000 Drop in tank Town use ok
10,000 Construction site ok
1,000 Geographical Locations may prevent further rationalisation. Consider extending replacement to 12 yrs/ 10,000hrs
1,000
1,000
1,000
1,000
1,000
800
Downsize Potential?
800
800
800
800
800
800
500 Dispose? Share other or hire
500 Utilisation to increase through shared use
500
350 Business case to
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 59 of 131
Item Details
As
se
t N
um
be
r
Ma
ke
Mo
de
l
003708.01 Dynapac 3point Smooth Drum
003907.02 Cat Vibrating Roller
004205.02 John Deere
Tractor004210.02 John Deere
004211.02 John Deere
004212.02 John Deere
004401.02 John Deere
004214.01 Tractor
004601.02 John Deere Compact Tractor
004602.02 Toro 5040
004604.03 Toro Z7210
004606.02 Spider Slope Mower
ILD02
004608.02 John Deere
Mower004609.02 John Deere
004613.01 John Deere
004614.01 Kubota
F3680
004615.01 Kubota
004706.02 Kubota
004603.02 Kubota
004605.02 Kubota
004705.02 Kubota
F2880004713.02 Kubota
004715.03 John Deere
Mower
004716.02 John Deere
004717.02 John Deere
004718.02 John Deere
004719.02 John Deere
004720.03 John Deere
004732.01 John Deere
004733.01 John Deere
004805.02 John Deere
Review of Light Fleet & Heavy Plant
PLANT & HEAVY VEHICL
Utilisation
Mo
de
l
Ap
pli
ca
tio
n
Av
e A
nn
ua
l U
tili
sa
tio
n
Uti
lis
ati
on
2
01
4-1
5
* N
ati
on
al
Be
nc
hm
ark
3point Smooth Drum
Const/ Mtce Grading Crew
124 0
Vibrating Roller
General maintenance
133 103
Tractor
Slashing 162 214
Slashing/Loading 138 208
149 167
Parks Mowing/Loading
262 231
99 112
Landfill Slashing 183 161
Compact Tractor
Mowing
251 218
5040 64 63
Z7210 309 33
ILD02 63 55
Mower
206 96
147 119
128 184
F3680
108 110
250 253
96 94
316 267
153 133
F2880
263 386
119 144
Mower
42 38
93 113
36 60
71 251
124 103
79 57
47 47
27 25
42 300
PLANT & HEAVY VEHICLES 60
Be
nc
hm
ark
U
tili
sa
tio
n
Co
mm
en
ts
on
Uti
lis
ati
on
350 retain
150 Footpath roller ok
500 Airport ok
500 Depot/Town locations ok 500
300 Turf tyred tractor ok
300 Cemetery/multi use ok
300 Dedicated ok
300 ok
100 Bunker rake/other uses
500 Location ok
500
Used on dam wall. Potential to share but distance issue
200 Cemetery ok
300 Treatment works ok
500 Business Case to retain 500
500 Geographical location ok 500
500 Business Case to retain 500
500 ok
500 Business Case to retain
500 Dispose
150 ok
150 Community Mowing
150 ok
150 ok
150 ok
150 Community Mowing 150
150 Reservoir ok
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 60 of 131
Item Details
As
se
t N
um
be
r
Ma
ke
Mo
de
l
005201.01 Lincoln W’POWER 230
005204.01 Kubota J112
005205.01 FG Wilson P500P3/P550E3
006205.01 Sykes Sykes
006206.01 Sykes
* Benchmarks were established through a consultation process conducted during the development of
the IPWEA best practice Manual and reviewed by the IPWEA
Utilisation needs to be constantly monitored throughout the year with monthly reports to management
and supervisory staff. Each year a “budget” or target utilisation should be established and will form the
basis for the internal hire rate.
Asset management plans for infrastructure assets will provide a degree of certainty for maintenance
works but new construction is more difficult to predict. Our recommended strategy is to maintain a
core level of plant & labour for contin
contract out excess work or hire in plant & labour. This is a proven strategy subject to the availability
of contractors or heavy plant for hire.
Over Utilisation
When it comes to plant and heavy
normally has little effect on resale value and only a marginal increase in depreciation. The only
increase in cost is the operational cost and this will be recovered from jobs. High utilisati
in earlier replacement and the need to ensure funds from depreciation are transferred to the plant
reserve. The earlier replacement will be catered for in the 10 year plan if reviewed annually.
Under Utilisation
Under utilisation does come at a cost as fixed costs have to be recovered over less operating hours.
Example - A truck with 20,000
expected $20,000 resale after 8 years
Depreciation = $110,000/8 years = $13,750
= $110,000/ (20,000*8) = $0.69/km
If the vehicle doesn’t travel 20,000
For a vehicle travelling 15,000 km
Review of Light Fleet & Heavy Plant
PLANT & HEAVY VEHICLES
Utilisation
Mo
de
l
Ap
pli
ca
tio
n
Av
e A
nn
ua
l U
tili
sa
tio
n
Uti
lis
ati
on
2
01
4-1
5
* N
ati
on
al
Be
nc
hm
ark
W’POWER 230
Welder/Generator 8 8
J112
Generator
23 134
P500P3/ P550E3
8 8
Sykes Flood Pump 0 0
0 0
Benchmarks were established through a consultation process conducted during the development of
the IPWEA best practice Manual and reviewed by the IPWEA Fleet Panel on a regular basis.
Utilisation needs to be constantly monitored throughout the year with monthly reports to management
and supervisory staff. Each year a “budget” or target utilisation should be established and will form the
Asset management plans for infrastructure assets will provide a degree of certainty for maintenance
works but new construction is more difficult to predict. Our recommended strategy is to maintain a
core level of plant & labour for continuity of work and high utilisation and be prepared to either
contract out excess work or hire in plant & labour. This is a proven strategy subject to the availability
of contractors or heavy plant for hire.
When it comes to plant and heavy vehicles the aim is to maximise utilisation and high utilisation
normally has little effect on resale value and only a marginal increase in depreciation. The only
increase in cost is the operational cost and this will be recovered from jobs. High utilisati
in earlier replacement and the need to ensure funds from depreciation are transferred to the plant
reserve. The earlier replacement will be catered for in the 10 year plan if reviewed annually.
a cost as fixed costs have to be recovered over less operating hours.
km average annual utilisation, costing $130,000 and with an
expected $20,000 resale after 8 years
= $110,000/8 years = $13,750 / yr
$110,000/ (20,000*8) = $0.69/km
If the vehicle doesn’t travel 20,000 km the lower utilisation costs $0.69/Km below 20,000
km / yr the underutilisation cost is $0.69*5,000 km = $3,450 annually
AVY VEHICLES 61
Be
nc
hm
ark
U
tili
sa
tio
n
Co
mm
en
ts
on
Uti
lis
ati
on
200 Workshop ok
200 Emergency
200 Shannon Creek Emergency
10 Maclean Emergency
10 Grafton Emergency
Benchmarks were established through a consultation process conducted during the development of
Fleet Panel on a regular basis.
Utilisation needs to be constantly monitored throughout the year with monthly reports to management
and supervisory staff. Each year a “budget” or target utilisation should be established and will form the
Asset management plans for infrastructure assets will provide a degree of certainty for maintenance
works but new construction is more difficult to predict. Our recommended strategy is to maintain a
uity of work and high utilisation and be prepared to either
contract out excess work or hire in plant & labour. This is a proven strategy subject to the availability
vehicles the aim is to maximise utilisation and high utilisation
normally has little effect on resale value and only a marginal increase in depreciation. The only
increase in cost is the operational cost and this will be recovered from jobs. High utilisation may result
in earlier replacement and the need to ensure funds from depreciation are transferred to the plant
reserve. The earlier replacement will be catered for in the 10 year plan if reviewed annually.
a cost as fixed costs have to be recovered over less operating hours.
km average annual utilisation, costing $130,000 and with an
km the lower utilisation costs $0.69/Km below 20,000
km = $3,450 annually
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 61 of 131
External Plant Hire
CVC doesn’t keep any records of hire regarding type of plant hired or duration. Council calls an
annual tender for the supply of plant to Council. Council then engages plant on a job by job basis as
required to complete specific works after assessing the availability
Records of hire can provide a useful tool in supporting the case for ownership of plant or in raising
questions where similar Council
to continue long term, a business case review for ownership should be considered.
RECOMMENDATION
Utilisation
19. Actual utilisation is regularly reported to management.
20. Consideration is given to:
a) Downsize a number of gravel haulage trucks and
loaders.
b) Extend the change-over of graders to
12yrs/10,000hrs subject to a risk assessment
beyond 8yrs/8,000hrs.
c) Dispose of a skid steer loader and increase the
utilisation of other such loaders with shared use.
d) A business case review to be undertaken for 2
rollers and 4 mowers identified in Table 1
report.
21. A business case review is based on actual utilisation
(Kilometres or Engine Hours) and not on timesheet
hours.
22. External plant hire and hours on hire be recorded so
that plant can be identified as a cost by category and
as wet or dry hire to assist in future audits and any
business case analysis for retention/disposal/purchase
of plant.
2.5. Optimum Replacement Timing
The optimum replacement timing for a plant or heavy vehicle or an item of equipment is calculated th
same as has been explained for light fleet with the difference being with plant and some heavy
vehicles engine hours are the primary measure of utilization.
Hence the optimum time, will be determined in either kilometres or engine hours, and time, to
the lowest average annual cost during the life of the machine.
The optimum replacement point in the life of the plant item is near when the decreasing line of
depreciation intersects with the increasing cost of repairs and maintenance costs. Actual
figures will show two distinct steep drops in resale value. The first significant drop is immediately post
purchase. The second drop is prior to a major component overhaul, which is when second hand
buyers are aware of a large impending rep
Review of Light Fleet & Heavy Plant
PLANT & HEAVY VEHICL
keep any records of hire regarding type of plant hired or duration. Council calls an
annual tender for the supply of plant to Council. Council then engages plant on a job by job basis as
required to complete specific works after assessing the availability and suitability of our own plant.
Records of hire can provide a useful tool in supporting the case for ownership of plant or in raising
owned plant is not being fully utilised. If the level of hire is predicted
long term, a business case review for ownership should be considered.
Impact to Organisation
Actual utilisation is regularly reported to management.
Downsize a number of gravel haulage trucks and
over of graders to
12yrs/10,000hrs subject to a risk assessment
beyond 8yrs/8,000hrs.
Dispose of a skid steer loader and increase the
utilisation of other such loaders with shared use.
A business case review to be undertaken for 2
rollers and 4 mowers identified in Table 16 of the
A business case review is based on actual utilisation
(Kilometres or Engine Hours) and not on timesheet
External plant hire and hours on hire be recorded so
that plant can be identified as a cost by category and
as wet or dry hire to assist in future audits and any
business case analysis for retention/disposal/purchase
Optimum Replacement Timing
The optimum replacement timing for a plant or heavy vehicle or an item of equipment is calculated th
same as has been explained for light fleet with the difference being with plant and some heavy
vehicles engine hours are the primary measure of utilization.
Hence the optimum time, will be determined in either kilometres or engine hours, and time, to
the lowest average annual cost during the life of the machine.
The optimum replacement point in the life of the plant item is near when the decreasing line of
depreciation intersects with the increasing cost of repairs and maintenance costs. Actual
figures will show two distinct steep drops in resale value. The first significant drop is immediately post
purchase. The second drop is prior to a major component overhaul, which is when second hand
buyers are aware of a large impending repair and maintenance bill. (Refer Figure 4
PLANT & HEAVY VEHICLES 62
keep any records of hire regarding type of plant hired or duration. Council calls an
annual tender for the supply of plant to Council. Council then engages plant on a job by job basis as
and suitability of our own plant.
Records of hire can provide a useful tool in supporting the case for ownership of plant or in raising
owned plant is not being fully utilised. If the level of hire is predicted
long term, a business case review for ownership should be considered.
Ease of Implementation
The optimum replacement timing for a plant or heavy vehicle or an item of equipment is calculated the
same as has been explained for light fleet with the difference being with plant and some heavy
Hence the optimum time, will be determined in either kilometres or engine hours, and time, to achieve
The optimum replacement point in the life of the plant item is near when the decreasing line of
depreciation intersects with the increasing cost of repairs and maintenance costs. Actual depreciation
figures will show two distinct steep drops in resale value. The first significant drop is immediately post
purchase. The second drop is prior to a major component overhaul, which is when second hand
Figure 4)
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 62 of 131
Figure 4 - Optimum Replacement Point
Optimum Replacement Calculations
An optimum replacement calculation has many variables and therefore can only really be applied to
each unit individually based on given utilisation. If the utilisation increases the optimum replacement
point will occur sooner and if the utilisation drops there may be an opportunity to delay replacing a
unit. The key drivers of optimum replacement are:
• Downtime costs (lost opportunity cost of existing plant + cost of hire equipment)
• Maintenance Costs
• Resale value
When calculated as per the above example and using Net Present Value (NPV) we can establish the
year of lowest average cost and this is the optimum replacement point.
We have prepared an optimum replacement calculation for a grader based on an average annual
utilisation of 1,000 engine hours. Refer
occurs at 8,000 hrs and hence the optimum replacement is 8 year
Optimum Replacement Benchmarks
IPWEA national benchmarks provide a guide to optimum replacement points in a simplified format
whereby high utilisation equipment is replaced on meter limits (hrs or kms) and lower utilisation
equipment is replaced (in years) before a significant drop in resale value is experienced. This is the
time when the unit becomes too old for the second hand buyer to finance in its entirety. This generally
occurs at 10 years.
While the Council has adopted optimum replacement benchmar
age and/or utilisation (whichever occurs first) some parameters need adjustment based on current
Review of Light Fleet & Heavy Plant
PLANT & HEAVY VEHICL
Optimum Replacement Point – Example only
Optimum Replacement Calculations
An optimum replacement calculation has many variables and therefore can only really be applied to
based on given utilisation. If the utilisation increases the optimum replacement
point will occur sooner and if the utilisation drops there may be an opportunity to delay replacing a
unit. The key drivers of optimum replacement are:
portunity cost of existing plant + cost of hire equipment)
When calculated as per the above example and using Net Present Value (NPV) we can establish the
year of lowest average cost and this is the optimum replacement point.
We have prepared an optimum replacement calculation for a grader based on an average annual
utilisation of 1,000 engine hours. Refer Appendix 5. The calculation shows the lowest average cost
occurs at 8,000 hrs and hence the optimum replacement is 8 years.
Optimum Replacement Benchmarks
IPWEA national benchmarks provide a guide to optimum replacement points in a simplified format
whereby high utilisation equipment is replaced on meter limits (hrs or kms) and lower utilisation
rs) before a significant drop in resale value is experienced. This is the
time when the unit becomes too old for the second hand buyer to finance in its entirety. This generally
has adopted optimum replacement benchmarks mostly based on a combination of
age and/or utilisation (whichever occurs first) some parameters need adjustment based on current
PLANT & HEAVY VEHICLES 63
An optimum replacement calculation has many variables and therefore can only really be applied to
based on given utilisation. If the utilisation increases the optimum replacement
point will occur sooner and if the utilisation drops there may be an opportunity to delay replacing a
portunity cost of existing plant + cost of hire equipment)
When calculated as per the above example and using Net Present Value (NPV) we can establish the
We have prepared an optimum replacement calculation for a grader based on an average annual
. The calculation shows the lowest average cost
IPWEA national benchmarks provide a guide to optimum replacement points in a simplified format
whereby high utilisation equipment is replaced on meter limits (hrs or kms) and lower utilisation
rs) before a significant drop in resale value is experienced. This is the
time when the unit becomes too old for the second hand buyer to finance in its entirety. This generally
ks mostly based on a combination of
age and/or utilisation (whichever occurs first) some parameters need adjustment based on current
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 63 of 131
IPWEA benchmarks and in some cases corrections for the unique geographical constraints. (Refer
Table 18).
It is important to note that utilisation can be as critical in optimum replacement as age. A good
example in the Council’s fleet is the Komatsu Wheel Loader used at the landfill site which has an
average annual utilisation of 1638 hours. The optimum replacement benchmark
or 8,000 hrs. Based on this level of utilisation the loader could be changed at 5 years or less.
Adopting optimum replacement in practice will reduce annual plant replacement costs in the long
term, reduce maintenance costs and mos
We also recommend an operating risk analysis be undertaken prior to making a decision to hold an
item beyond its optimum replacement point. The process involved in undertaking an operating risk
assessment can be found in Section 1.8 of the IPWEA Plant & Vehicle Management Manual.
Given the relative low utilisation to benchmark of so many heavy fleet items there is the potential to
extend the replacement timing beyond the benchmark. A good example i
recommended the change-over of graders be extended to 12
assessment beyond 8 yrs / 8,000
Low utilisation has already lead to the decision to hold heavy fleet items longer than policy. A de
was made in May 2014 to hold off on any replacements pending a fleet review.
There are a relatively high number of items that have been held beyond optimum replacement
benchmarks and these are identified in
replacement of those items ie utilisation (hrs/km) or age. A number of older items beyond optimum
replacement have already been identified for disposal (Refer
Impact of Taxation
Elected members often ask why the public sector changes plant and vehicles more frequently than
the private sector. The answer lies in taxation liability:
• Government funded fleets do not have the requirement to pay tax on income from the sale of
fleet items.
• Income from the sale of
exposes the business to an increased tax liability.
• The tax liability results in an increase in the cost of owning plant and vehicles and extends the
optimum replacement point for the pri
Example - A public sector organisation purchases an item of plant for $200,000. After 8 years
the plant item has been depreciated to a net value of $50,000.
They resell the item for $100,000. The full $100,000 returns to the organisation as
private sector company does exactly the same but must pay tax on the difference between the written
down value (WDV) and the sale price. They pay tax on $50,000 at the company tax rate.
Review of Light Fleet & Heavy Plant
PLANT & HEAVY VEHICL
IPWEA benchmarks and in some cases corrections for the unique geographical constraints. (Refer
to note that utilisation can be as critical in optimum replacement as age. A good
example in the Council’s fleet is the Komatsu Wheel Loader used at the landfill site which has an
average annual utilisation of 1638 hours. The optimum replacement benchmark for a loader is 8 years
hrs. Based on this level of utilisation the loader could be changed at 5 years or less.
Adopting optimum replacement in practice will reduce annual plant replacement costs in the long
term, reduce maintenance costs and most importantly minimise downtime in the outside operations.
We also recommend an operating risk analysis be undertaken prior to making a decision to hold an
item beyond its optimum replacement point. The process involved in undertaking an operating risk
sessment can be found in Section 1.8 of the IPWEA Plant & Vehicle Management Manual.
Given the relative low utilisation to benchmark of so many heavy fleet items there is the potential to
extend the replacement timing beyond the benchmark. A good example is the graders where we have
over of graders be extended to 12 yrs / 10,000 hrs subject to a risk
8,000 hrs.
Low utilisation has already lead to the decision to hold heavy fleet items longer than policy. A de
was made in May 2014 to hold off on any replacements pending a fleet review.
There are a relatively high number of items that have been held beyond optimum replacement
benchmarks and these are identified in Table 17 together with a comment on the t
replacement of those items ie utilisation (hrs/km) or age. A number of older items beyond optimum
replacement have already been identified for disposal (Refer Table 18). Their disposal is supported.
why the public sector changes plant and vehicles more frequently than
the private sector. The answer lies in taxation liability:
Government funded fleets do not have the requirement to pay tax on income from the sale of
plant in private enterprise results in increased profitability that
exposes the business to an increased tax liability.
The tax liability results in an increase in the cost of owning plant and vehicles and extends the
optimum replacement point for the private sector.
A public sector organisation purchases an item of plant for $200,000. After 8 years
the plant item has been depreciated to a net value of $50,000.
They resell the item for $100,000. The full $100,000 returns to the organisation as
private sector company does exactly the same but must pay tax on the difference between the written
down value (WDV) and the sale price. They pay tax on $50,000 at the company tax rate.
PLANT & HEAVY VEHICLES 64
IPWEA benchmarks and in some cases corrections for the unique geographical constraints. (Refer
to note that utilisation can be as critical in optimum replacement as age. A good
example in the Council’s fleet is the Komatsu Wheel Loader used at the landfill site which has an
for a loader is 8 years
hrs. Based on this level of utilisation the loader could be changed at 5 years or less.
Adopting optimum replacement in practice will reduce annual plant replacement costs in the long
t importantly minimise downtime in the outside operations.
We also recommend an operating risk analysis be undertaken prior to making a decision to hold an
item beyond its optimum replacement point. The process involved in undertaking an operating risk
sessment can be found in Section 1.8 of the IPWEA Plant & Vehicle Management Manual.
Given the relative low utilisation to benchmark of so many heavy fleet items there is the potential to
s the graders where we have
hrs subject to a risk
Low utilisation has already lead to the decision to hold heavy fleet items longer than policy. A decision
There are a relatively high number of items that have been held beyond optimum replacement
together with a comment on the trigger for
replacement of those items ie utilisation (hrs/km) or age. A number of older items beyond optimum
). Their disposal is supported.
why the public sector changes plant and vehicles more frequently than
Government funded fleets do not have the requirement to pay tax on income from the sale of
plant in private enterprise results in increased profitability that
The tax liability results in an increase in the cost of owning plant and vehicles and extends the
A public sector organisation purchases an item of plant for $200,000. After 8 years
They resell the item for $100,000. The full $100,000 returns to the organisation as they pay no tax. A
private sector company does exactly the same but must pay tax on the difference between the written
down value (WDV) and the sale price. They pay tax on $50,000 at the company tax rate.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 64 of 131
RECOMMENDATION
Optimum Replacement Timing
23. The IPWEA optimum replacement benchmarks based
on a combination of age and utilisation are adopted.
24. Prior to holding an item beyond optimum replacement
an operating risk analysis is undertaken.
2.6. Whole of Life Cost
Whole of life cost is the total cost of owning and operating an item of fleet over the estimated life of
the item. Having established the optimum point at which to
management tool is knowledge of whole of life costs. Whole of life costs include:
• Annual depreciation to an anticipated residual.
• Finance or opportunity costs.
• Operating costs, tyres, fuel, repairs and maintenance.
• Fixed costs, overhead recovery, insurance, wages, license.
• FBT for light vehicles.
Whole of Life Costs should be used in calculating internal hire rates and in purchasing decisions.
The hire rate needs to be established at the time of purchase of a new ite
used to support the purchase decision) and should be generally retained over the life of the item. In
the early life of the item there is a substantial over recovery available to be transferred to reserve but
later in the life of the item this is needed to fund increasing maintenance costs.
Whole of life costs will reflect how much of the equipment’s annual costs will be based on annual
utilisation and an optimum replacement point that has already been established. The annual cos
calculated will provide a projected (budget) annual cost for the life of the equipment. A simple
spreadsheet can be used to develop whole of life costs and provide an estimate of the total annual
cost of an item of plant.
By dividing annual cost by the operational timesheet hours used to recover the cost of operating plant,
internal charge out rates can be determined.
hire rates. When these rates are applied they will provide the appropriate recover
replacement reserve to fund plant replacement at the optimum time. Example whole of life cost
calculations is included in Appendix 7.
Knowing whole of life costs we can provide:
• Annual maintenance budget
• Annual replacement provision
• Annual operational costs
• Internal hire rates.
Low internal hire rates combined with low utilisation compounds the under recovery of actual fleet
costs and can disguise the full cost of plant & vehicle ownership resulting in fleet effectively
Review of Light Fleet & Heavy Plant
PLANT & HEAVY VEHICL
Optimum Replacement Timing Impact to Organisation
The IPWEA optimum replacement benchmarks based
on a combination of age and utilisation are adopted.
Prior to holding an item beyond optimum replacement
an operating risk analysis is undertaken.
Whole of Life Cost
Whole of life cost is the total cost of owning and operating an item of fleet over the estimated life of
the item. Having established the optimum point at which to replace the vehicle/equipment, the next
management tool is knowledge of whole of life costs. Whole of life costs include:
Annual depreciation to an anticipated residual.
Finance or opportunity costs.
Operating costs, tyres, fuel, repairs and maintenance.
Fixed costs, overhead recovery, insurance, wages, license.
Whole of Life Costs should be used in calculating internal hire rates and in purchasing decisions.
The hire rate needs to be established at the time of purchase of a new item (based on the utilisation
used to support the purchase decision) and should be generally retained over the life of the item. In
the early life of the item there is a substantial over recovery available to be transferred to reserve but
f the item this is needed to fund increasing maintenance costs.
Whole of life costs will reflect how much of the equipment’s annual costs will be based on annual
utilisation and an optimum replacement point that has already been established. The annual cos
calculated will provide a projected (budget) annual cost for the life of the equipment. A simple
spreadsheet can be used to develop whole of life costs and provide an estimate of the total annual
operational timesheet hours used to recover the cost of operating plant,
internal charge out rates can be determined. Appendix 6 provides an example of calculating internal
When these rates are applied they will provide the appropriate recovery of costs to a plant
replacement reserve to fund plant replacement at the optimum time. Example whole of life cost
calculations is included in Appendix 7.
Knowing whole of life costs we can provide:
Annual maintenance budget
Annual replacement provision
nnual operational costs
Low internal hire rates combined with low utilisation compounds the under recovery of actual fleet
costs and can disguise the full cost of plant & vehicle ownership resulting in fleet effectively
PLANT & HEAVY VEHICLES 65
Ease of Implementation
Whole of life cost is the total cost of owning and operating an item of fleet over the estimated life of
replace the vehicle/equipment, the next
Whole of Life Costs should be used in calculating internal hire rates and in purchasing decisions.
m (based on the utilisation
used to support the purchase decision) and should be generally retained over the life of the item. In
the early life of the item there is a substantial over recovery available to be transferred to reserve but
Whole of life costs will reflect how much of the equipment’s annual costs will be based on annual
utilisation and an optimum replacement point that has already been established. The annual costs
calculated will provide a projected (budget) annual cost for the life of the equipment. A simple
spreadsheet can be used to develop whole of life costs and provide an estimate of the total annual
operational timesheet hours used to recover the cost of operating plant,
Appendix 6 provides an example of calculating internal
y of costs to a plant
replacement reserve to fund plant replacement at the optimum time. Example whole of life cost
Low internal hire rates combined with low utilisation compounds the under recovery of actual fleet
costs and can disguise the full cost of plant & vehicle ownership resulting in fleet effectively
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 65 of 131
subsidising operations. This can lead to retention of low utilisation items when other options such as
long term hire can be more cost effective.
Where utilisation will dictate the timing of replacement ahead of age as the trigger point, a higher level
of depreciation is allocated to fully fund the earlier replacement. This applies to only a few items of the
heavy fleet at Clarence Valley.
Table 17 - Items beyond Optimum Replacement
Asset Data
As
se
t #
Ma
ke
Mo
de
l
001011.02 Mitsubishi FM61FM
001012.01 Nissan CWA445
001013.01 Nissan CWA445
001304.02 Nissan PK245
001305.02 Nissan PK245
001309.02 Mitsubishi FM65FL
001319.01 Mitsubishi FK61
001320.01 Isuzu FRR500
001500.02 Isuzu NKR200
001700.02 Isuzu FVY1400
Paveliner
001705.02 Nissan CW385
002201.01 Rogers Trailer
002204.01 Dean Trailer
003000.02 Cat Grader
003001.02 Cat Grader
003004.02 Cat Grader
003010.02 Cat Grader
003200.01 Hitachi LX100
003600.01 Cat 320CL
004003.01 Howard EHD180
Review of Light Fleet & Heavy Plant
PLANT & HEAVY VEHICL
rations. This can lead to retention of low utilisation items when other options such as
long term hire can be more cost effective.
Where utilisation will dictate the timing of replacement ahead of age as the trigger point, a higher level
allocated to fully fund the earlier replacement. This applies to only a few items of the
Items beyond Optimum Replacement Benchmarks
Changeover Years
Mo
de
l
Ap
pli
ca
tio
n
Ag
e (
Yrs
)
Av
era
ge
A
nn
ua
l U
tili
sa
tio
n
CV
C
Ch
an
ge
ove
r P
oli
cy
FM61FM Crew Truck 8.1 12,984 8 / 500,000
CWA445 Gravel Haul 9.1 34,089 8 / 500,000
CWA445 Gravel Haul 9.1 35,849 8 / 500,000
PK245 Gravel Haul 8.3 36,369 8 / 200,000
PK245 Gravel Haul 9.4 41,466 8 / 200,000
FM65FL Gravel Haul 8.0 11,878 8 / 200,000
FK61 Flood Gate
Maintenance 10.2 16,601 8 / 200,000
FRR500 Mobile library
18.7 15,709 8 / 200,000
NKR200 Carpenters 8.6 10,433 7 / 150,000
FVY1400 /
Paveliner Autopatcher 8.5 25,866 7 / 500,000
CW385 Watercart 9.2 10,118 8 / 500,000
Trailer Plant
Haulage 15.3 0 10
Trailer Plant
Haulage 15.3 0 10
Grader Mtce/Const/
Grading 10.1 589
8 / 8,000 hrs
Grader
Maintenance
Grading Crew
10.1 789 8 / 8,000
hrs
Grader
Maintenance
Grading Crew
10.1 870 8 / 8,000
hrs
Grader Mtce/Const/
Grading 10.1 623
8 / 8,000 hrs
LX100 Gravel
Loading 18.5 376
8 / 8,000 hrs
320CL Mtce/Const/
Drge 10.6 589
8 / 8,000 hrs
EHD180 Slashing 14.7 0 5
PLANT & HEAVY VEHICLES 66
rations. This can lead to retention of low utilisation items when other options such as
Where utilisation will dictate the timing of replacement ahead of age as the trigger point, a higher level
allocated to fully fund the earlier replacement. This applies to only a few items of the
Changeover Years / Km / Hrs
Be
nc
hm
ark
C
ha
ng
eo
ve
r
Ch
an
ge
T
rig
ge
r
8/200,000 Age
8/500,000 Age
8/500,000 Age
8/500,000 Age
8/500,000 Age
8/200,000 Age
8/200,000 Age
8/200,000 Age
8/150,000 Age
8 Age
8 Age
8/150,000 Age
15/150,000 Age
10 / 8,000 hrs
Age
10 / 8,000 hrs
Age
10 / 8,000 hrs
Age
10 / 8,000 hrs
Age
8 / 8,000 hrs
Age
8 / 8,000 hrs
Age
5 Age
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 66 of 131
Asset Data
As
se
t #
Ma
ke
Mo
de
l
004019.02 Agrifarm APM/361
004020.02 Howard EHD180
004208.01 John Deere Tractor
004214.01 Tractor Tractor
004602.02 Toro 5040
004702.01 Ransome
160d
Ransome
160D
004703.02 John Deere Greens
Mower
004732.01 John Deere Mower
004733.01 John Deere Mower
004805.02 John Deere Mower
006002.01 Komatsu FD20T
12
007256.01 Ditch Witch 7020JD
001701.03 Hino RosmechSweeper
003207.02 Komatsu WA250
PZ
004506.02 Aebi TT270
004600.03 Toro Z7210
006500.01 Compair Hulman
001314.02 Mitsubishi FM61FM
001316.02 Nissan PK265
001511.02 Isuzu NPR200
002003.02 Shephards A399A
002005.02 Shephards A399A
002007.01 Trailer Peak
001504.02 Mitsubishi Canter
Review of Light Fleet & Heavy Plant
PLANT & HEAVY VEHICL
Changeover Years
Mo
de
l
Ap
pli
ca
tio
n
Ag
e (
Yrs
)
Av
era
ge
A
nn
ua
l U
tili
sa
tio
n
CV
C
Ch
an
ge
ove
r P
oli
cy
APM/361 Slashing 6.2 0 5
EHD180 Slashing 6.2 0 5
Tractor Roadwork
Broom 12.2 254
8 / 5,000 hrs
Tractor Landfill
Slashing 17.0 183
8 / 5,000 hrs
5040 Mowing 6.0 64 4
Ransome
160D Golf Course 10.2 211 8
Greens
Mower Golf Course 10.2 199 7
Mower Mowing 7.6 47 5
Mower Mowing 7.6 27 5
Mower Mowing 6.5 42 5
FD20T-12
Forklift 17.0 79 10
7020JD Water Cycle 18.7 143 10
Rosmech Sweeper
SWEEPER 4.6 1,450 4 / 6,000
hrs
WA250 PZ-6
Landfill Tip Face
5.1 1,638 6 / 8,000
hrs
TT270 All Terrain
Mowing 6.4 369 5
Z7210 Mowing 4.0 531 4
Hulman Trailer Air
compressor 14.7 381 15
FM61FM Road Patch
Crew 7.7 26,676 8 / 200,000
PK265 Road Patch
Crew 7.5 34,301 8 / 200,000
NPR200 Line Marking
& Signs 6.7 23,190 7 / 150,000
A399A Dog Gravel
Haulage 6.4 27,521 8
A399A Dog Gravel
Haulage 6.4 26,201 8
Peak Dog Gravel
Haulage 13.4 16,294 8
Canter Village
Maintenance 8.7 22,385 8 / 150,000
PLANT & HEAVY VEHICLES 67
Changeover Years / Km / Hrs
Be
nc
hm
ark
C
ha
ng
eo
ve
r
Ch
an
ge
T
rig
ge
r
5 age
5 age
7 / 5,000 age
7 / 5,000 age
5 / 2,000 age
5 / 2,000 age
5 / 2,000 age
5 / 2,000 age
5 / 2,000 age
5 / 2,000 age
10 / 5,000 age
15 / 5,000 age
8 / 8,000 hrs
8 / 8,000 hrs
5 / 2,000 age
5 / 2,000 hrs
15 / 5,000 hrs
8 / 200,000 km
8 / 200,000 km
8 / 150,000 km
15 /
150,000 km
15 /
150,000 km
15 /
150,000 km
8 / 150,000 km/age
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 67 of 131
Table 18 - Items Listed for Disposal 2015
Asset Data A
ss
et
#
Ma
ke
Mo
de
l
002008.01 Trailer Peak
003403.02 Komatsu WB97F
004006.01 Howard EHD180
004204.01 John Deere Tractor
004721.01 John Deere Mower
004722.02 John Deere Mower
004724.02 John Deere Mower
004725.02 John Deere Mower
007250.01 Pacific Pacific
Best practice involves charging an internal hire rate that reflects full cost recovery and we have
calculated rates for each individual item. The aim is to ensure over time that there will be sufficient
funds in the reserve to fully fund plant replacement.
Based on the data provided we believe that the council is recovering sufficient operational cost,
however to enable true costing, we recommend full cost recovery including depreciation as a hire
charge against every machine. This will allow council to t
external service delivery
Tabs in the master XL sheet provide the hire rates and details of the calculation methodology which
will enable the finance manager to make adjustments as required.
Some organisations are using net purchase price in purchase decisions and ignoring operating costs
and expected repair & maintenance costs over the life of the item and this can lead to decisions being
made that do not provide best value. Based on the advi
the Council is using whole of life costs as part of the weighted evaluation in the purchase decision.
While Council’s Purchasing Procedures don’t require whole of life costs to be considered for
purchases lower than $80,000 we recommend the level be set at $20,000 for fleet. At $80,000 there
would be no requirement to consider whole of life costs in purchase decisions for light vehicles for
example and this would not be delivering best value and would be inconsist
recommendations in this report.
Procurement and calculating whole of life costs is addressed in more detail in Section 4 Management.
Review of Light Fleet & Heavy Plant
PLANT & HEAVY VEHICL
Disposal 2015-16
Changeover Years/Km/Hrs
Mo
de
l
Ap
pli
ca
tio
n
Ag
e (
Yrs
)
Av
era
ge
A
nn
ua
l U
tili
sa
tio
n
CV
C
Ch
an
ge
ove
r
Peak Dog Gravel
Haulage 17.3 6,396 8
WB97F Maintenance
Civil Services
10.1 488 8 / 5,000
hrs
EHD180 Slashing 12.1 0 5
Tractor Slashing 10.4 451 6 / 5,000
hrs
Mower Mowing 10.3 0 5
Mower Mowing 5.6 17 5
Mower Mowing 7.2 17 10
Mower Mowing 6.5 21 5
Pacific Drawn Road
Broom 23.4 0 10
Best practice involves charging an internal hire rate that reflects full cost recovery and we have
calculated rates for each individual item. The aim is to ensure over time that there will be sufficient
funds in the reserve to fully fund plant replacement.
Based on the data provided we believe that the council is recovering sufficient operational cost,
however to enable true costing, we recommend full cost recovery including depreciation as a hire
charge against every machine. This will allow council to truly benchmark their internal costing against
Tabs in the master XL sheet provide the hire rates and details of the calculation methodology which
will enable the finance manager to make adjustments as required.
Some organisations are using net purchase price in purchase decisions and ignoring operating costs
and expected repair & maintenance costs over the life of the item and this can lead to decisions being
made that do not provide best value. Based on the advice received via the questionnaire response
is using whole of life costs as part of the weighted evaluation in the purchase decision.
While Council’s Purchasing Procedures don’t require whole of life costs to be considered for
han $80,000 we recommend the level be set at $20,000 for fleet. At $80,000 there
would be no requirement to consider whole of life costs in purchase decisions for light vehicles for
example and this would not be delivering best value and would be inconsistent with other
Procurement and calculating whole of life costs is addressed in more detail in Section 4 Management.
PLANT & HEAVY VEHICLES 68
Changeover Years/Km/Hrs
Be
nc
hm
ark
C
ha
ng
eo
ve
r
Ch
an
ge
T
rig
ge
r
8/150,000 age
8/8,000 age
5 age
7/5,000 age
5/2,000 age
5/2,000 age
5/2,000 age
5/2,000 age
15 age
Best practice involves charging an internal hire rate that reflects full cost recovery and we have
calculated rates for each individual item. The aim is to ensure over time that there will be sufficient
Based on the data provided we believe that the council is recovering sufficient operational cost,
however to enable true costing, we recommend full cost recovery including depreciation as a hire
ruly benchmark their internal costing against
Tabs in the master XL sheet provide the hire rates and details of the calculation methodology which
Some organisations are using net purchase price in purchase decisions and ignoring operating costs
and expected repair & maintenance costs over the life of the item and this can lead to decisions being
ce received via the questionnaire response
is using whole of life costs as part of the weighted evaluation in the purchase decision.
While Council’s Purchasing Procedures don’t require whole of life costs to be considered for
han $80,000 we recommend the level be set at $20,000 for fleet. At $80,000 there
would be no requirement to consider whole of life costs in purchase decisions for light vehicles for
ent with other
Procurement and calculating whole of life costs is addressed in more detail in Section 4 Management.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 68 of 131
RECOMMENDATION
Whole of Life Cost
25. Internal hire rates are based on whole of life costs and
annual “budget” internal hire rates reflect full cost
recovery including the cost of replacement.
26. The proposed internal hire rates be adopted applied
either as an annual charge to the end user department
or recovered through time sheet hours.
27. A comparison is made between timesheet hours
against actual utilisation and regularly monitored to
ensure that any changes in actual utilisation must be
matched by a corresponding increase or decrease in
the timesheet hours
28. To simplify administrative work whole of life costs be
recovered through an annual charge rather than hourly
rates for maintenance plant such as mowers.
29. Whole of life costs be used in purchasing
all items over $20,000.
Review of Light Fleet & Heavy Plant
PLANT & HEAVY VEHICL
Impact to Organisation
are based on whole of life costs and
annual “budget” internal hire rates reflect full cost
recovery including the cost of replacement.
The proposed internal hire rates be adopted applied
either as an annual charge to the end user department
or recovered through time sheet hours.
A comparison is made between timesheet hours
against actual utilisation and regularly monitored to
ensure that any changes in actual utilisation must be
matched by a corresponding increase or decrease in
To simplify administrative work whole of life costs be
recovered through an annual charge rather than hourly
rates for maintenance plant such as mowers.
Whole of life costs be used in purchasing decisions for
PLANT & HEAVY VEHICLES 69
Ease of Implementation
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 69 of 131
2.7. Plant & Heavy Vehicles Best Practice
Figure 3 – Plant & Heavy Fleet Management Best Practice
Source: IPWEA Plant & Vehicle Management Manual Section 8.
Review of Light Fleet & Heavy Plant
PLANT & HEAVY VEHICL
Plant & Heavy Vehicles Best Practice
Plant & Heavy Fleet Management Best Practice
Source: IPWEA Plant & Vehicle Management Manual Section 8.
PLANT & HEAVY VEHICLES 70
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 70 of 131
3. MECHANICAL SERVICES
3.1. Key Deliverables
A review of current mechanical workshop practices, recommend optimal service level for mechanical
maintenance including labour required, and provide a process for benchmarking performance.
The main KPI’s that provide a performance benchmarks in mechanical ma
• Scheduled Versus Unscheduled Maintenance
• Maintenance failure records
• Downtime costs
• Labour flat rates
3.2. Provision of Mechanical Services
Current Position Overview
Clarence Valley Council was formed in February 2004 by the amalgamation of the
Maclean Shire, and parts of Copmanhurst, Pristine Waters and
areas.
The legacy of the amalgamation remains with 4
close proximity in Grafton. The decision has already been made to reduce the number to one new
state of the art depot in Grafton and retention of the existing relatively new depot in north east corner
of the Shire at Townsend.
Each workshop has a Supervisor and there are 5 mechanics and 2 apprentices.
It is understood that all servicing and
Scheduled servicing is planned a fortnight in advance for the heavy fleet and
fleet.
Outsourced work includes hydraulic hose replacement, air conditioning repairs/re
electrical outside testing equipment capability, custom fabrication, and major repairs to items such as
tipper bodies, tipper tail gates and large hydraulic cylinder resealing.
Tyre management is outsourced to the tyre supplier.
The workshop is reliant on TechnologyOne’s Works & Assets for all records and reporting. There are
no regular fleet management reports available but there i
fleet reporting capability. However, we are not aware to what extent.
Current Position Assessment
Our assessment is that both the number and location of depots proposed is the correct decision.
To not have an in-house maintenance capability in a rural location like Clarence Valley would have a
detrimental impact on the Council’s operational services. The in
critical to:
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
MECHANICAL SERVICES
review of current mechanical workshop practices, recommend optimal service level for mechanical
maintenance including labour required, and provide a process for benchmarking performance.
The main KPI’s that provide a performance benchmarks in mechanical maintenance are:
Scheduled Versus Unscheduled Maintenance
Maintenance failure records
Provision of Mechanical Services
was formed in February 2004 by the amalgamation of the
Maclean Shire, and parts of Copmanhurst, Pristine Waters and Richmond Valley
The legacy of the amalgamation remains with 4 Council depots, 3 of which are located in relative
close proximity in Grafton. The decision has already been made to reduce the number to one new
state of the art depot in Grafton and retention of the existing relatively new depot in north east corner
Each workshop has a Supervisor and there are 5 mechanics and 2 apprentices.
servicing and most mechanical repairs is undertaken in house.
Scheduled servicing is planned a fortnight in advance for the heavy fleet and 3-4 days for the light
Outsourced work includes hydraulic hose replacement, air conditioning repairs/re-
electrical outside testing equipment capability, custom fabrication, and major repairs to items such as
l gates and large hydraulic cylinder resealing.
Tyre management is outsourced to the tyre supplier.
The workshop is reliant on TechnologyOne’s Works & Assets for all records and reporting. There are
no regular fleet management reports available but there is an expectation that Works & Assets
. However, we are not aware to what extent.
Current Position Assessment
Our assessment is that both the number and location of depots proposed is the correct decision.
se maintenance capability in a rural location like Clarence Valley would have a
detrimental impact on the Council’s operational services. The in-house maintenance capability is
MECHANICAL SERVICES 71
review of current mechanical workshop practices, recommend optimal service level for mechanical
maintenance including labour required, and provide a process for benchmarking performance.
intenance are:
was formed in February 2004 by the amalgamation of the City of Grafton and
Richmond Valley local government
depots, 3 of which are located in relative
close proximity in Grafton. The decision has already been made to reduce the number to one new
state of the art depot in Grafton and retention of the existing relatively new depot in north east corner
mechanical repairs is undertaken in house.
4 days for the light
-gassing, auto
electrical outside testing equipment capability, custom fabrication, and major repairs to items such as
The workshop is reliant on TechnologyOne’s Works & Assets for all records and reporting. There are
s an expectation that Works & Assets has
Our assessment is that both the number and location of depots proposed is the correct decision.
se maintenance capability in a rural location like Clarence Valley would have a
house maintenance capability is
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 71 of 131
• Planning and conducting preventative maintenance
• Managing contractors
• Liaison with end users
• Capturing data for improved fleet management reporting
• Providing a quick response to analyse failures and to undertake minor repairs on site
• The maintenance "Chain of Responsibility" and the need to increase the frequenc
and compliance checks on plant/vehicles/equipment.
• Small plant servicing
While some work is currently outsourced we believe this has the potential to be increased in future for
a number of reasons:
• Increasing sophisticated technology plant/veh
equipment for servicing engines and new skills required by mechanics who conduct services.
This includes light fleet servicing.
• Purchase of the specialist equipment and training of staff in a small workshop for s
spread of plant, vehicles and equipment isn’t practical when other options are readily
available.
• Where available dealer service facilities are often better equipped to provide scheduled
service and maintenance.
• Improved resale values for vehic
Good recording and monitoring systems need to be in place for mechanical maintenance to ensure
that repair and maintenance times are controlled, performance standards are met and that accurate
records of each repair are kept. Apart from monitoring cost and performance, detailed workshop
records are essential to avoid the issue of liability in the case of operational accidents being open to
question. This will become even more important in future with national harm
The workshop will be required to keep maintenance records up to date and this will add to current
administrative workloads. Since the use of AusFleet was discontinued the workshop has been
severely disadvantaged and highly exposed to liabil
priority. Refer Section 4 Management.
What is the Council not doing that it should be doing?
We recommend Service Level Agreements
mechanical services (both internal and external) and Council’s operating departments to provide
greater accountability, a high level of service and control costs.
Documentation of the reasons for
system. While reasons for failures are being recorded on job cards the information is not readily
available to management. Failure records provide valuable management information in understanding
the reasons for repairs and enabling corrective action to be taken by operations manage
Documentation is also important in risk management and occupational health & safety considerations.
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
Planning and conducting preventative maintenance
Capturing data for improved fleet management reporting
Providing a quick response to analyse failures and to undertake minor repairs on site
The maintenance "Chain of Responsibility" and the need to increase the frequenc
and compliance checks on plant/vehicles/equipment.
While some work is currently outsourced we believe this has the potential to be increased in future for
Increasing sophisticated technology plant/vehicles/equipment and the need for specialist
equipment for servicing engines and new skills required by mechanics who conduct services.
This includes light fleet servicing.
Purchase of the specialist equipment and training of staff in a small workshop for s
spread of plant, vehicles and equipment isn’t practical when other options are readily
Where available dealer service facilities are often better equipped to provide scheduled
service and maintenance.
Improved resale values for vehicles maintained by authorised service agents
Good recording and monitoring systems need to be in place for mechanical maintenance to ensure
that repair and maintenance times are controlled, performance standards are met and that accurate
air are kept. Apart from monitoring cost and performance, detailed workshop
records are essential to avoid the issue of liability in the case of operational accidents being open to
question. This will become even more important in future with national harmonisation laws.
The workshop will be required to keep maintenance records up to date and this will add to current
administrative workloads. Since the use of AusFleet was discontinued the workshop has been
severely disadvantaged and highly exposed to liability risk and this needs to be addressed as a
priority. Refer Section 4 Management.
not doing that it should be doing?
Service Level Agreements (SLA’s) be established between Fleet Management,
nal and external) and Council’s operating departments to provide
greater accountability, a high level of service and control costs.
Documentation of the reasons for maintenance failures (repairs) in a fleet management reporting
ailures are being recorded on job cards the information is not readily
available to management. Failure records provide valuable management information in understanding
the reasons for repairs and enabling corrective action to be taken by operations manage
Documentation is also important in risk management and occupational health & safety considerations.
HANICAL SERVICES 72
Providing a quick response to analyse failures and to undertake minor repairs on site
The maintenance "Chain of Responsibility" and the need to increase the frequency of safety
While some work is currently outsourced we believe this has the potential to be increased in future for
icles/equipment and the need for specialist
equipment for servicing engines and new skills required by mechanics who conduct services.
Purchase of the specialist equipment and training of staff in a small workshop for such a wide
spread of plant, vehicles and equipment isn’t practical when other options are readily
Where available dealer service facilities are often better equipped to provide scheduled
les maintained by authorised service agents
Good recording and monitoring systems need to be in place for mechanical maintenance to ensure
that repair and maintenance times are controlled, performance standards are met and that accurate
air are kept. Apart from monitoring cost and performance, detailed workshop
records are essential to avoid the issue of liability in the case of operational accidents being open to
onisation laws.
The workshop will be required to keep maintenance records up to date and this will add to current
administrative workloads. Since the use of AusFleet was discontinued the workshop has been
ity risk and this needs to be addressed as a
(SLA’s) be established between Fleet Management,
nal and external) and Council’s operating departments to provide
in a fleet management reporting
ailures are being recorded on job cards the information is not readily
available to management. Failure records provide valuable management information in understanding
the reasons for repairs and enabling corrective action to be taken by operations management.
Documentation is also important in risk management and occupational health & safety considerations.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 72 of 131
There is a need for a formal process for follow up with Operational supervisors and this should be
addressed in the SLA.
Downtime brings with it additional costs associated with hire of external plant, lost time on the job,
inefficient redeployment of staff to other work etc. However, as it is not being measured the extent
and cost impact cannot be identified. While not a high priority at present, futu
reporting on downtime will provide important information for operations management.
A contract for scheduled servicing and maintenance
preparing tender documents for new and replacement plant purchases.
servicing would need to be specified to be conducted at the
possible.
Workshop Maintenance Processes
process (chain of responsibility requi
Manual and this will need to be a focus for internal maintenance staff.
What the Council is doing well?
We strongly believe that the Council
capability. This is essential to ensure a high level of service and emergency response capability. The
question is to what extent in the longer term.
The Council’s mechanical services section is providing a high level of preventative
maintenance/safety checks and this should continue to minimise downtime in operational
departments.
3.3. Maintenance Failure Records
All repair and maintenance work at the
failures.
Maintenance failure records provide th
identifying downtime, failures and repair costs which will be reflected in charge out rates. Failure
records also provide an understanding of the impact of failures that may not be directly attr
the equipment itself. Maintenance failure records identify:
• Lack of daily maintenance such as failure to check the oil and water at start up,
• Exceeding equipment application or incorrect operational use such as the wrong machine
being used for the task required to be performed),
• Operator negligence – in the field or lack of daily maintenance,
• Accidents,
• Manufacturer's design failures,
• Age of the machine (expected component failure), or
• Customisation.
The accurate recording of the reasons for fai
and vehicle fleet management. When an item fails in the field, the impact on costs is not restricted to
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
There is a need for a formal process for follow up with Operational supervisors and this should be
tional costs associated with hire of external plant, lost time on the job,
inefficient redeployment of staff to other work etc. However, as it is not being measured the extent
and cost impact cannot be identified. While not a high priority at present, future recording and
reporting on downtime will provide important information for operations management.
contract for scheduled servicing and maintenance should be included as an option when
preparing tender documents for new and replacement plant purchases. For this to be efficient
servicing would need to be specified to be conducted at the Council’s workshop facility wherever
Workshop Maintenance Processes need to comply with the 8 step maintenance management
process (chain of responsibility requirements) detailed in the IPWEA Plant & Vehicle Management
Manual and this will need to be a focus for internal maintenance staff.
is doing well?
Council should continue to maintain an in house mechanical servic
capability. This is essential to ensure a high level of service and emergency response capability. The
question is to what extent in the longer term.
’s mechanical services section is providing a high level of preventative
hecks and this should continue to minimise downtime in operational
Maintenance Failure Records
All repair and maintenance work at the Council is recorded on job cards including the reasons for
Maintenance failure records provide the historical information for decisions affecting equipment by
identifying downtime, failures and repair costs which will be reflected in charge out rates. Failure
records also provide an understanding of the impact of failures that may not be directly attr
the equipment itself. Maintenance failure records identify:
Lack of daily maintenance such as failure to check the oil and water at start up,
Exceeding equipment application or incorrect operational use such as the wrong machine
the task required to be performed),
in the field or lack of daily maintenance,
Manufacturer's design failures,
Age of the machine (expected component failure), or
The accurate recording of the reasons for failures is a fundamental step in controlling costs in plant
and vehicle fleet management. When an item fails in the field, the impact on costs is not restricted to
MECHANICAL SERVICES 73
There is a need for a formal process for follow up with Operational supervisors and this should be
tional costs associated with hire of external plant, lost time on the job,
inefficient redeployment of staff to other work etc. However, as it is not being measured the extent
re recording and
reporting on downtime will provide important information for operations management.
should be included as an option when
For this to be efficient
’s workshop facility wherever
need to comply with the 8 step maintenance management
rements) detailed in the IPWEA Plant & Vehicle Management
should continue to maintain an in house mechanical service
capability. This is essential to ensure a high level of service and emergency response capability. The
’s mechanical services section is providing a high level of preventative
hecks and this should continue to minimise downtime in operational
is recorded on job cards including the reasons for
e historical information for decisions affecting equipment by
identifying downtime, failures and repair costs which will be reflected in charge out rates. Failure
records also provide an understanding of the impact of failures that may not be directly attributed to
Lack of daily maintenance such as failure to check the oil and water at start up,
Exceeding equipment application or incorrect operational use such as the wrong machine
lures is a fundamental step in controlling costs in plant
and vehicle fleet management. When an item fails in the field, the impact on costs is not restricted to
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 73 of 131
the repairs. Feedback to end users on the reasons for failures is critical if a failure is due
operator or inappropriate use of the item. Numerous hidden costs start to compound:
• The mechanic is sent to investigate the failure, resulting in the delay of planned maintenance
on items scheduled for service.
• The operator stands idle while
• A cost is involved to recover the item from the field to the workshop.
• The team relying on the item is held up until a replacement item is provided.
• Additional expenditure in replacement plant h
Being aware of the cause of the failures is particularly important to operational managers to provide
the information to become proactive in their approach to staff training and the correct equipment
application in the field. Recording the reasons for failures and reporting to operations management is
an important step to reducing repeat failures and thereby reducing costs attributable to failures. It will
also assist to optimise plant and vehicle availability by reducin
It is important that the mechanic (internal or external) records the failures of plant and fleet and the
cost of each failure is allocated to each category. With information on the reasons and cost of failures,
management will be in a better p
• action planned maintenance,
• assess the need for operator training,
• develop simple procedures to reduce the impact of these failures on operations, or
• make a decision on the need for replacement with a more appropriate item of plant.
Documentation is also important in risk management and occupational health & safety considerations.
Records kept in diaries or on timesheets can be damaged or lost and don’t meet current OH&S
requirements.
As mentioned in the Current Position Assessment while re
cards the information is not readily available to management.
RECOMMENDATION
Maintenance Failure Records
30. Maintenance failures and the reasons for failures are
documented in a future management reporting system
by the mechanical service team.
3.4. Downtime Cost
Downtime cost is all costs associated with an item of the fleet being out of action for repairs or
maintenance other than the costs of the work on the item. Downtime should be measured from when
the machine is reported down in normal working hours until th
Downtime should also be recorded in the case where a machine is brought to the workshop for
repairs. While the repair itself may only take a few hours there can be substantial delays (downtime)
in waiting for parts for unanticipated work.
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
the repairs. Feedback to end users on the reasons for failures is critical if a failure is due
operator or inappropriate use of the item. Numerous hidden costs start to compound:
The mechanic is sent to investigate the failure, resulting in the delay of planned maintenance
on items scheduled for service.
The operator stands idle while the equipment is assessed for suitability for field repairs.
A cost is involved to recover the item from the field to the workshop.
The team relying on the item is held up until a replacement item is provided.
Additional expenditure in replacement plant hire should the activity be critical.
Being aware of the cause of the failures is particularly important to operational managers to provide
the information to become proactive in their approach to staff training and the correct equipment
field. Recording the reasons for failures and reporting to operations management is
an important step to reducing repeat failures and thereby reducing costs attributable to failures. It will
also assist to optimise plant and vehicle availability by reducing downtime.
It is important that the mechanic (internal or external) records the failures of plant and fleet and the
cost of each failure is allocated to each category. With information on the reasons and cost of failures,
management will be in a better position to;
action planned maintenance,
assess the need for operator training,
develop simple procedures to reduce the impact of these failures on operations, or
make a decision on the need for replacement with a more appropriate item of plant.
tation is also important in risk management and occupational health & safety considerations.
Records kept in diaries or on timesheets can be damaged or lost and don’t meet current OH&S
As mentioned in the Current Position Assessment while reasons for failures are being recorded on job
cards the information is not readily available to management.
Maintenance Failure Records Impact to Organisation
Maintenance failures and the reasons for failures are
documented in a future management reporting system
by the mechanical service team.
Downtime cost is all costs associated with an item of the fleet being out of action for repairs or
maintenance other than the costs of the work on the item. Downtime should be measured from when
the machine is reported down in normal working hours until the machine gets back on the road.
Downtime should also be recorded in the case where a machine is brought to the workshop for
repairs. While the repair itself may only take a few hours there can be substantial delays (downtime)
nticipated work.
MECHANICAL SERVICES 74
the repairs. Feedback to end users on the reasons for failures is critical if a failure is due to either the
operator or inappropriate use of the item. Numerous hidden costs start to compound:
The mechanic is sent to investigate the failure, resulting in the delay of planned maintenance
the equipment is assessed for suitability for field repairs.
The team relying on the item is held up until a replacement item is provided.
ire should the activity be critical.
Being aware of the cause of the failures is particularly important to operational managers to provide
the information to become proactive in their approach to staff training and the correct equipment
field. Recording the reasons for failures and reporting to operations management is
an important step to reducing repeat failures and thereby reducing costs attributable to failures. It will
It is important that the mechanic (internal or external) records the failures of plant and fleet and the
cost of each failure is allocated to each category. With information on the reasons and cost of failures,
develop simple procedures to reduce the impact of these failures on operations, or
make a decision on the need for replacement with a more appropriate item of plant.
tation is also important in risk management and occupational health & safety considerations.
Records kept in diaries or on timesheets can be damaged or lost and don’t meet current OH&S
asons for failures are being recorded on job
Ease of Implementation
Downtime cost is all costs associated with an item of the fleet being out of action for repairs or
maintenance other than the costs of the work on the item. Downtime should be measured from when
e machine gets back on the road.
Downtime should also be recorded in the case where a machine is brought to the workshop for
repairs. While the repair itself may only take a few hours there can be substantial delays (downtime)
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 74 of 131
Downtime costs can accumulate and the associated increased operational costs often go undetected
unless accurate assessment of the downtime is made. Downtime needs to be tracked in order to
identify how much the downtime is costing for e
mechanical service provider needs to record the time:
• Vehicle arrived for service or breakdown was reported
• Mechanic commenced work on the vehicle
• Waiting for parts (if any)
• Job was completed
• Vehicle was collected
While not currently being recorded nor a high priority at present, future reporting on downtime will
provide important information for operations management if a fleet management reporting system is
reinstated.
RECOMMENDATION
Downtime Cost
31. Downtime is recorded on job cards to facilitate future
management reporting.
3.5. Scheduled Versus Unscheduled Maintenance Ratio
A comparison of scheduled versus unscheduled maintenance (repairs) can provide a valuable KPI
and tool in fleet management reporting but care should be taken when applying this as a mechanical
workshop performance indicator because repairs are generally outside the control of the workshop.
The terms scheduled and unscheduled maintenance have different interpretations and these are
defined as follows:
• Scheduled services includes all lube services which involve
and a general safety check including electronics, i.e. all of the tasks that be expected to
maintain the item within Manufacturer’s requirements.
• Scheduled maintenance includes tyre changes, clutch and brake repairs, cha
sharpening blades, replacing worn bearings, bushes etc, i.e. all of the tasks that be expected
to maintain the item within Manufacturer’s requirements.
• Unscheduled maintenance (repairs) is not part of normal preventative maintenance.
The target is that labour time allocated to scheduled services and maintenance should, as a
minimum, equal the time spent on unscheduled maintenance (repairs). However, if the fleet is not
being replaced at the optimum time or is being mismanaged by operations, this wil
substantially on the workshop’s ability to meet this benchmark.
If the organisation fails to adopt and fund optimum replacement, the incidence of failures will most
certainly increase. The workshop also has no control of failures due to:
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
Downtime costs can accumulate and the associated increased operational costs often go undetected
unless accurate assessment of the downtime is made. Downtime needs to be tracked in order to
identify how much the downtime is costing for each item. In order to accurately record downtime, the
mechanical service provider needs to record the time:
Vehicle arrived for service or breakdown was reported
Mechanic commenced work on the vehicle
While not currently being recorded nor a high priority at present, future reporting on downtime will
provide important information for operations management if a fleet management reporting system is
Impact to Organisation
Downtime is recorded on job cards to facilitate future
Scheduled Versus Unscheduled Maintenance Ratio
A comparison of scheduled versus unscheduled maintenance (repairs) can provide a valuable KPI
and tool in fleet management reporting but care should be taken when applying this as a mechanical
mance indicator because repairs are generally outside the control of the workshop.
The terms scheduled and unscheduled maintenance have different interpretations and these are
Scheduled services includes all lube services which involves changing oils, filters, greasing
and a general safety check including electronics, i.e. all of the tasks that be expected to
maintain the item within Manufacturer’s requirements.
Scheduled maintenance includes tyre changes, clutch and brake repairs, cha
sharpening blades, replacing worn bearings, bushes etc, i.e. all of the tasks that be expected
to maintain the item within Manufacturer’s requirements.
Unscheduled maintenance (repairs) is not part of normal preventative maintenance.
that labour time allocated to scheduled services and maintenance should, as a
minimum, equal the time spent on unscheduled maintenance (repairs). However, if the fleet is not
being replaced at the optimum time or is being mismanaged by operations, this wil
substantially on the workshop’s ability to meet this benchmark.
If the organisation fails to adopt and fund optimum replacement, the incidence of failures will most
certainly increase. The workshop also has no control of failures due to:
MECHANICAL SERVICES 75
Downtime costs can accumulate and the associated increased operational costs often go undetected
unless accurate assessment of the downtime is made. Downtime needs to be tracked in order to
ach item. In order to accurately record downtime, the
While not currently being recorded nor a high priority at present, future reporting on downtime will
provide important information for operations management if a fleet management reporting system is
Ease of Implementation
A comparison of scheduled versus unscheduled maintenance (repairs) can provide a valuable KPI
and tool in fleet management reporting but care should be taken when applying this as a mechanical
mance indicator because repairs are generally outside the control of the workshop.
The terms scheduled and unscheduled maintenance have different interpretations and these are
s changing oils, filters, greasing
and a general safety check including electronics, i.e. all of the tasks that be expected to
Scheduled maintenance includes tyre changes, clutch and brake repairs, changing &
sharpening blades, replacing worn bearings, bushes etc, i.e. all of the tasks that be expected
Unscheduled maintenance (repairs) is not part of normal preventative maintenance.
that labour time allocated to scheduled services and maintenance should, as a
minimum, equal the time spent on unscheduled maintenance (repairs). However, if the fleet is not
being replaced at the optimum time or is being mismanaged by operations, this will impact
If the organisation fails to adopt and fund optimum replacement, the incidence of failures will most
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 75 of 131
• operator negligence - in the field or lack of daily maintenance (such as failure to check the oil
and water at start-up) and
• application of the machine being used
However, the workshop does have a responsibilit
referral to operational management.
The ratio of scheduled maintenance to unscheduled maintenance (repairs) should be adopted as an
important organisation fleet performance indicator with the workshop
responsible for the outcome. The role of the workshop is to ensure manufacturers’ minimum service
standards are implemented and work is undertaken based on the agreed flat
Unfortunately, it is not uncommo
around 30/70. The aim should be to reverse this ratio to 70/30 and at minimum the target is to achieve
a 50/50 result. These KPI’s are overall targets only as there are high maintenance items su
sweepers, rubbish collection vehicles, landfill site plant where the average 30% unscheduled
maintenance will most certainly be exceeded.
Where 70% of workshop maintenance is reactive, responding to breakdowns, the end result is more
than just the downtime of the item and the repair costs. The flow
work crews and even more downtime costs associated with the repair.
RECOMMENDATION
Scheduled to Unscheduled Maintenance Ratio
32. An overall scheduled to unscheduled maintenance
ratio of 70/30 be considered as a future KPI target
once a fleet management reporting capability is in
place.
3.6. Maintenance Standards and Specifications
Manufacturer’s of fleet assets provide standards for both the timing (engine hours/kilometres
travelled) of scheduled services and the specification for the
should be undertaken. The risk of not following those standards includes:
• loss of warranty (during a warranty period)
• increased downtime due to breakdowns and
• liability being placed on the asset owner
Plant and vehicle operators are required to undertake daily checks and complete a “tick and flick”
sheet with responsibility for follow up resting with the works supervisors, workshop supervisors and
the Fleet Coordinator.
Table 19 details our recommended preventative mainte
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
in the field or lack of daily maintenance (such as failure to check the oil
up) and
application of the machine being used – wrong machine for the task required to be performed.
However, the workshop does have a responsibility to record and report on the reasons for failures for
referral to operational management.
The ratio of scheduled maintenance to unscheduled maintenance (repairs) should be adopted as an
important organisation fleet performance indicator with the workshop playing their part but not being
responsible for the outcome. The role of the workshop is to ensure manufacturers’ minimum service
standards are implemented and work is undertaken based on the agreed flat-rate labour hours.
Unfortunately, it is not uncommon for the ratio of scheduled to unscheduled maintenance to be
around 30/70. The aim should be to reverse this ratio to 70/30 and at minimum the target is to achieve
a 50/50 result. These KPI’s are overall targets only as there are high maintenance items su
sweepers, rubbish collection vehicles, landfill site plant where the average 30% unscheduled
maintenance will most certainly be exceeded.
Where 70% of workshop maintenance is reactive, responding to breakdowns, the end result is more
he downtime of the item and the repair costs. The flow-on effects are idle and frustrated
work crews and even more downtime costs associated with the repair.
Scheduled to Unscheduled Maintenance Ratio Impact to Organisation
An overall scheduled to unscheduled maintenance
ratio of 70/30 be considered as a future KPI target
once a fleet management reporting capability is in
Maintenance Standards and Specifications
Manufacturer’s of fleet assets provide standards for both the timing (engine hours/kilometres
travelled) of scheduled services and the specification for the preventative maintenance work that
should be undertaken. The risk of not following those standards includes:
loss of warranty (during a warranty period)
increased downtime due to breakdowns and
liability being placed on the asset owner
erators are required to undertake daily checks and complete a “tick and flick”
sheet with responsibility for follow up resting with the works supervisors, workshop supervisors and
details our recommended preventative maintenance strategies.
MECHANICAL SERVICES 76
in the field or lack of daily maintenance (such as failure to check the oil
wrong machine for the task required to be performed.
y to record and report on the reasons for failures for
The ratio of scheduled maintenance to unscheduled maintenance (repairs) should be adopted as an
playing their part but not being
responsible for the outcome. The role of the workshop is to ensure manufacturers’ minimum service
rate labour hours.
n for the ratio of scheduled to unscheduled maintenance to be
around 30/70. The aim should be to reverse this ratio to 70/30 and at minimum the target is to achieve
a 50/50 result. These KPI’s are overall targets only as there are high maintenance items such as road
sweepers, rubbish collection vehicles, landfill site plant where the average 30% unscheduled
Where 70% of workshop maintenance is reactive, responding to breakdowns, the end result is more
on effects are idle and frustrated
Ease of Implementation
Manufacturer’s of fleet assets provide standards for both the timing (engine hours/kilometres
preventative maintenance work that
erators are required to undertake daily checks and complete a “tick and flick”
sheet with responsibility for follow up resting with the works supervisors, workshop supervisors and
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 76 of 131
Table 19 – Planned Maintenance Strategies
Strategy Activities
Driver/Operator initiated
• Daily checks by drivers/operators (must be recorded in duplicate)
• Documenting/reporting defects to workshop staff,
• Arrange unscheduled work if
• Document maintenance failures
Preventative Maintenance Servicing
• Maintenance schedules as per manufactures specification,
• Compare scheduled to unscheduled
• Recording of maintenance performed, labour and materials used.
• Maintain
• Prioritisation of maintenance work to minimise operational downtime
• Use of genuine parts
• Oil sampling and analysis on major plant items to include high utilisation items beyond manufacturer’s warranty pepreventative maintenance tool
Safety Inspections
• All plant including minor items
• Major high maintenance plant such as road sweepers
• Small engine plant/equipment and a minor service every 6 months by a mechanic
Service Standards for Availability of Plant
As a minimum Manufacturer’s recommendations should be adopted. There is also a need for
proactive safety checks in addition to Manufacturer’s scheduled servicing. We believe that the
proactive safety requirements required in the National Heavy Vehicle Main
Accreditation guide will eventually apply to all internal maintenance facilities.
As mentioned in Section 3.4, the ratio of
performance measure for the organisation more than the mechanical
Maintenance Management Accreditation encourages heavy vehicle operators to take more
responsibility for servicing their vehicles regularly and ensuring their vehicles are safe at all times. It
has been developed to provide c
reduce down time associated with breakdowns and annual inspections. It will also lead to greater road
safety. Further information can be obtained from the National Heavy Vehicle Accreditatio
(NHVAS).
There is also a need for proactive safety checks in addition to Manufacturer’s scheduled servicing. All
plant including minor items should be subject to a safety check a minimum of every 6 months. This
safety check is not only to ensure t
asset data base which is particularly important with minor plant.
We recommend the frequency of safety checks are even higher for major plant items such as road
sweeper vehicles (high utilisation, high risk maintenance items) to ensure downtime is minimised. For
example:
• replacing brake linings well before they cause subsequent damage to drums
• replacing bearings and bushes before they can cause any additional failure or safety risk
operating outside their known wear tolerances
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
Planned Maintenance Strategies
Daily checks by drivers/operators (must be recorded in duplicate)
Documenting/reporting defects to workshop staff,
Arrange unscheduled work if required
Document maintenance failures
Maintenance schedules as per manufactures specification,
Compare scheduled to unscheduled – target is 50/50
Recording of maintenance performed, labour and materials used.
Maintain register of maintenance issues and condition reports
Prioritisation of maintenance work to minimise operational downtime
Use of genuine parts
Oil sampling and analysis on major plant items to include high utilisation items beyond manufacturer’s warranty periods as an important preventative maintenance tool
All plant including minor items - Min 6 months
Major high maintenance plant such as road sweepers –
Small engine plant/equipment - Weekly safety check by the operator minor service every 6 months by a mechanic
Service Standards for Availability of Plant
As a minimum Manufacturer’s recommendations should be adopted. There is also a need for
proactive safety checks in addition to Manufacturer’s scheduled servicing. We believe that the
proactive safety requirements required in the National Heavy Vehicle Maintenance Management
Accreditation guide will eventually apply to all internal maintenance facilities.
As mentioned in Section 3.4, the ratio of scheduled to unscheduled maintenance
performance measure for the organisation more than the mechanical workshop where it is measured.
Maintenance Management Accreditation encourages heavy vehicle operators to take more
responsibility for servicing their vehicles regularly and ensuring their vehicles are safe at all times. It
has been developed to provide clear procedures for ensuring vehicles are well maintained, and to
reduce down time associated with breakdowns and annual inspections. It will also lead to greater road
safety. Further information can be obtained from the National Heavy Vehicle Accreditatio
There is also a need for proactive safety checks in addition to Manufacturer’s scheduled servicing. All
plant including minor items should be subject to a safety check a minimum of every 6 months. This
safety check is not only to ensure the mechanical condition of the item but also registration on the
asset data base which is particularly important with minor plant.
We recommend the frequency of safety checks are even higher for major plant items such as road
ation, high risk maintenance items) to ensure downtime is minimised. For
replacing brake linings well before they cause subsequent damage to drums
replacing bearings and bushes before they can cause any additional failure or safety risk
outside their known wear tolerances
MECHANICAL SERVICES 77
Daily checks by drivers/operators (must be recorded in duplicate)
Maintenance schedules as per manufactures specification,
Recording of maintenance performed, labour and materials used.
register of maintenance issues and condition reports
Prioritisation of maintenance work to minimise operational downtime
Oil sampling and analysis on major plant items to include high utilisation riods as an important
– fortnightly
Weekly safety check by the operator
As a minimum Manufacturer’s recommendations should be adopted. There is also a need for
proactive safety checks in addition to Manufacturer’s scheduled servicing. We believe that the
tenance Management
scheduled to unscheduled maintenance is a key
workshop where it is measured.
Maintenance Management Accreditation encourages heavy vehicle operators to take more
responsibility for servicing their vehicles regularly and ensuring their vehicles are safe at all times. It
lear procedures for ensuring vehicles are well maintained, and to
reduce down time associated with breakdowns and annual inspections. It will also lead to greater road
safety. Further information can be obtained from the National Heavy Vehicle Accreditation Scheme
There is also a need for proactive safety checks in addition to Manufacturer’s scheduled servicing. All
plant including minor items should be subject to a safety check a minimum of every 6 months. This
he mechanical condition of the item but also registration on the
We recommend the frequency of safety checks are even higher for major plant items such as road
ation, high risk maintenance items) to ensure downtime is minimised. For
replacing brake linings well before they cause subsequent damage to drums
replacing bearings and bushes before they can cause any additional failure or safety risk
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 77 of 131
Small engine plant and equipment should be subject to a weekly safety check by the operator and a
safety inspection every 6 months by a mechanic. We understand this requirement is being currently
addressed by small plant being checked or serviced when the parent item is being serviced.
The benefits of being proactive in safety checks can include:
• improvements in productivity and efficiency
• improved skills and accountability of drivers/operators and mechanics
• reduced down time
• greater confidence in the condition of the Council’s plant/vehicles/equipment
• increased vehicle life and lower maintenance costs
• improved driver/operator morale
• improved safety
RECOMMENDATION
Maintenance Standards and Specifications
33. The planned and preventative maintenance schedules
detailed in Table 19 of the report be adopted as a
minimum to reduce OH&S risk and downtime.
3.7. Labour Flat Rates
Labour flat rates refer to an adopted industry standard for the expected time for a maintenance task.
The term is applied by the vehicle
machinery.
Flat rates determine the amount of time allocated for a mechanic to complete services and
maintenance on every item of plant, vehicle and equipment in the fleet. Once flat rates
with mechanical staff they provide the mechanic with the time to complete the task and can be
extrapolated over the whole fleet to determine workshop resourcing requirements. Flat rates provide
the opportunity for benchmarking against indus
For the purpose of assessing minimum workshop labour requirements we have developed flat rates
taking into consideration the rural location on the North Coast. These should be refined in consultation
with the Fleet Coordinator who will h
documented. Details of the proposed flat rates are included in the separately attached XL sheet tab
titled 10 Year Plan.
Flat rates however do not cover maintenance that is attributed to failures (unex
as:
• Lack of daily checks
• Incorrect application
• Age
• Manufacturers fault
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
Small engine plant and equipment should be subject to a weekly safety check by the operator and a
safety inspection every 6 months by a mechanic. We understand this requirement is being currently
being checked or serviced when the parent item is being serviced.
The benefits of being proactive in safety checks can include:
improvements in productivity and efficiency
improved skills and accountability of drivers/operators and mechanics
greater confidence in the condition of the Council’s plant/vehicles/equipment
increased vehicle life and lower maintenance costs
improved driver/operator morale
Maintenance Standards and Specifications Impact to Organisation
The planned and preventative maintenance schedules
of the report be adopted as a
minimum to reduce OH&S risk and downtime.
Labour Flat Rates
Labour flat rates refer to an adopted industry standard for the expected time for a maintenance task.
The term is applied by the vehicle industry to every task undertaken in the maintenance and repair of
Flat rates determine the amount of time allocated for a mechanic to complete services and
maintenance on every item of plant, vehicle and equipment in the fleet. Once flat rates
with mechanical staff they provide the mechanic with the time to complete the task and can be
extrapolated over the whole fleet to determine workshop resourcing requirements. Flat rates provide
the opportunity for benchmarking against industry best practice.
For the purpose of assessing minimum workshop labour requirements we have developed flat rates
taking into consideration the rural location on the North Coast. These should be refined in consultation
with the Fleet Coordinator who will have a very good idea of service times if these are not
documented. Details of the proposed flat rates are included in the separately attached XL sheet tab
Flat rates however do not cover maintenance that is attributed to failures (unexpected repairs) such
CAL SERVICES 78
Small engine plant and equipment should be subject to a weekly safety check by the operator and a
safety inspection every 6 months by a mechanic. We understand this requirement is being currently
being checked or serviced when the parent item is being serviced.
greater confidence in the condition of the Council’s plant/vehicles/equipment
Ease of Implementation
Labour flat rates refer to an adopted industry standard for the expected time for a maintenance task.
industry to every task undertaken in the maintenance and repair of
Flat rates determine the amount of time allocated for a mechanic to complete services and
maintenance on every item of plant, vehicle and equipment in the fleet. Once flat rates are negotiated
with mechanical staff they provide the mechanic with the time to complete the task and can be
extrapolated over the whole fleet to determine workshop resourcing requirements. Flat rates provide
For the purpose of assessing minimum workshop labour requirements we have developed flat rates
taking into consideration the rural location on the North Coast. These should be refined in consultation
ave a very good idea of service times if these are not
documented. Details of the proposed flat rates are included in the separately attached XL sheet tab
pected repairs) such
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 78 of 131
• Operator inattention
RECOMMENDATION
Labour Flat Rates
34. In the long term flat rate labour times are adopted for
standard servicing by internal and external service
providers.
3.8. Estimated Mechanical Maintenance Labour Requirements
At the core of Uniqco’s estimated labour requirements is an assessment of:
• Average annual utilisation
• Age and utilisation over the life of each item
• Manufacturer’s scheduled servicing requirements and
• An assessment of annual unscheduled maintenance
As detailed in Section 2, Average Annual Utilisation
vehicle or equipment and is measured in either engine hours (for p
trucks. Actual annual utilisation data is used, along with age, to calculate the number of services
required for each plant/vehicle item.
Age and Life to date utilisation
been held beyond its optimum replacement it will impact on workshop labour requirements and
repairs & maintenance costs will increase. Maintaining an optimum replacement policy will minimise
annual plant replacement costs in the long term, re
reduce downtime in the outside operations. The
replacement and this has not been an issue for the labour assessment.
Scheduled maintenance intervals
a minimum. Scheduled maintenance is based on age or utilisation whichever occurs first.
Our assessment of flat rate labour hours
and experience and has been reviewed by the Fleet Coordinator. Similarly our estimates for
unscheduled maintenance are based on the age/utilisation of the fleet, our experience and
discussions with the Fleet Coordinator.
Section 11.7 of the IPWEA best Practice Plant & Vehicle Manageme
provides a step by step methodology for calculating workshop labour requirements using first
principles. This methodology was developed by us and peer reviewed by IPWEA’s national panel of
fleet managers prior to inclusion in
Principles followed in estimating mechanical workshop labour requirements
Step
1. Calculate the average annual utilisation of each item. This is needed to enable an estimate for
the number of services recommended by the manufacturer.
2. Obtain the manufacturer’s recommended service intervals. Scheduled service intervals are
specified by the manufacturer based on time or utilisation whichever comes first. This allows a
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
Impact to Organisation
In the long term flat rate labour times are adopted for
standard servicing by internal and external service
Estimated Mechanical Maintenance Labour Requirements
At the core of Uniqco’s estimated labour requirements is an assessment of:
Average annual utilisation
Age and utilisation over the life of each item
scheduled servicing requirements and
An assessment of annual unscheduled maintenance
Average Annual Utilisation is the extent of use of a particular item of plant,
vehicle or equipment and is measured in either engine hours (for plant) and kilometres travelled for
trucks. Actual annual utilisation data is used, along with age, to calculate the number of services
required for each plant/vehicle item.
Age and Life to date utilisation can have an impact on unscheduled maintenance. I
been held beyond its optimum replacement it will impact on workshop labour requirements and
repairs & maintenance costs will increase. Maintaining an optimum replacement policy will minimise
annual plant replacement costs in the long term, reduce maintenance costs and most importantly
reduce downtime in the outside operations. The Council is generally on target with optimum
replacement and this has not been an issue for the labour assessment.
Scheduled maintenance intervals are recommended by the manufacturer and must be followed as
a minimum. Scheduled maintenance is based on age or utilisation whichever occurs first.
flat rate labour hours for scheduled maintenance is based on industry standards
eviewed by the Fleet Coordinator. Similarly our estimates for
unscheduled maintenance are based on the age/utilisation of the fleet, our experience and
discussions with the Fleet Coordinator.
Section 11.7 of the IPWEA best Practice Plant & Vehicle Management Manual (3rd edition
provides a step by step methodology for calculating workshop labour requirements using first
principles. This methodology was developed by us and peer reviewed by IPWEA’s national panel of
fleet managers prior to inclusion in the Manual.
Principles followed in estimating mechanical workshop labour requirements
Calculate the average annual utilisation of each item. This is needed to enable an estimate for
the number of services recommended by the manufacturer.
Obtain the manufacturer’s recommended service intervals. Scheduled service intervals are
specified by the manufacturer based on time or utilisation whichever comes first. This allows a
MECHANICAL SERVICES 79
Ease of Implementation
Estimated Mechanical Maintenance Labour Requirements
is the extent of use of a particular item of plant,
lant) and kilometres travelled for
trucks. Actual annual utilisation data is used, along with age, to calculate the number of services
can have an impact on unscheduled maintenance. If an item has
been held beyond its optimum replacement it will impact on workshop labour requirements and
repairs & maintenance costs will increase. Maintaining an optimum replacement policy will minimise
duce maintenance costs and most importantly
is generally on target with optimum
the manufacturer and must be followed as
a minimum. Scheduled maintenance is based on age or utilisation whichever occurs first.
for scheduled maintenance is based on industry standards
eviewed by the Fleet Coordinator. Similarly our estimates for
unscheduled maintenance are based on the age/utilisation of the fleet, our experience and
nt Manual (3rd edition - 2012)
provides a step by step methodology for calculating workshop labour requirements using first
principles. This methodology was developed by us and peer reviewed by IPWEA’s national panel of
Principles followed in estimating mechanical workshop labour requirements - Step by
Calculate the average annual utilisation of each item. This is needed to enable an estimate for
Obtain the manufacturer’s recommended service intervals. Scheduled service intervals are
specified by the manufacturer based on time or utilisation whichever comes first. This allows a
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 79 of 131
schedule to be developed for the number and type of services required
scheduled services and scheduled maintenance.
3. When a major service is undertaken a minor service and safety check is undertaken at the
same time. When a minor service is undertaken we allow for a safety check at the same time.
An allowance is added for proactive safety checks in between scheduled services and
scheduled maintenance. Safety checks will be undertaken a minimum of every 6 months or
lesser period to meet local conditions or OH&S requirements.
4. In house services generally provide a
provided externally and we have made allowances for this in the flat rates. These were
discussed and agreed with Coordinator Fleet Management based on the tasks recommended
by the Manufacturer.
5. Obtain the number of services (minor and major) by dividing the utilisation by the service
interval or recommended minimum time. Round the number of services down to nearest
whole number.
6. Provision for scheduled maintenance is made based on agreed ratios for ea
plant/vehicle/equipment
7. Calculate total labour hours for scheduled maintenance.
8. Allocate a percentage allowance for repairs. The allowance will be higher for high wear/tear
items like a street sweeper than low wear items like a motor car. Apply
age of the fleet, local conditions, experience and in liaison with mechanical maintenance staff.
9. Allow a percentage of labour hours for administrative tasks such as completing job cards,
fleet management system entries, parts ordering an
10. Based on the estimated flat rates we are able to calculate the number of mechanic labour
hours required to meet the scheduled service and maintenance requirements including
proactive safety checks.
11. Calculate total hours and di
number of full time employees required to complete the work.
Note: Our estimate of the labour required to maintain Council’s fleet is based on the flat rate labour hours. These
rates should be incorporated within a service level agreement between fleet management and the mechanical
workshop. A ratio of scheduled maintenance to scheduled services has been applied and these rates vary
between for different items of plant/vehicles/equipment. For the Ap
available hours to be spent on mechanical maintenance.
Our “base load” estimates for labour requirements for the mechanical workshop are calculated in the
separately attached XL sheet refer Tabs Maintenance Hours L
based on:
• Current average annual utilisation
• the estimated flat rate labour rates to maintain each item of the fleet
• the recommended level of additional servicing and proactive safety checks in between
manufacturer’s servicing requirements
• A ratio of scheduled to unscheduled maintenance as detailed in the XL sheet
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
schedule to be developed for the number and type of services required annually, i.e.
scheduled services and scheduled maintenance.
When a major service is undertaken a minor service and safety check is undertaken at the
same time. When a minor service is undertaken we allow for a safety check at the same time.
s added for proactive safety checks in between scheduled services and
scheduled maintenance. Safety checks will be undertaken a minimum of every 6 months or
lesser period to meet local conditions or OH&S requirements.
In house services generally provide a higher level of service to their customers than would be
provided externally and we have made allowances for this in the flat rates. These were
discussed and agreed with Coordinator Fleet Management based on the tasks recommended
n the number of services (minor and major) by dividing the utilisation by the service
interval or recommended minimum time. Round the number of services down to nearest
Provision for scheduled maintenance is made based on agreed ratios for ea
Calculate total labour hours for scheduled maintenance.
Allocate a percentage allowance for repairs. The allowance will be higher for high wear/tear
items like a street sweeper than low wear items like a motor car. Apply allowance based on
age of the fleet, local conditions, experience and in liaison with mechanical maintenance staff.
Allow a percentage of labour hours for administrative tasks such as completing job cards,
fleet management system entries, parts ordering and other non mechanical tasks.
Based on the estimated flat rates we are able to calculate the number of mechanic labour
hours required to meet the scheduled service and maintenance requirements including
Calculate total hours and divide by 1400 annual hours available/mechanic to obtain the
number of full time employees required to complete the work.
Note: Our estimate of the labour required to maintain Council’s fleet is based on the flat rate labour hours. These
rporated within a service level agreement between fleet management and the mechanical
workshop. A ratio of scheduled maintenance to scheduled services has been applied and these rates vary
between for different items of plant/vehicles/equipment. For the Apprentices we have adopted a percentage of
available hours to be spent on mechanical maintenance.
Our “base load” estimates for labour requirements for the mechanical workshop are calculated in the
separately attached XL sheet refer Tabs Maintenance Hours LF & Maintenance Hours HP and are
Current average annual utilisation
the estimated flat rate labour rates to maintain each item of the fleet
the recommended level of additional servicing and proactive safety checks in between
ing requirements
A ratio of scheduled to unscheduled maintenance as detailed in the XL sheet
MECHANICAL SERVICES 80
annually, i.e.
When a major service is undertaken a minor service and safety check is undertaken at the
same time. When a minor service is undertaken we allow for a safety check at the same time.
s added for proactive safety checks in between scheduled services and
scheduled maintenance. Safety checks will be undertaken a minimum of every 6 months or
higher level of service to their customers than would be
provided externally and we have made allowances for this in the flat rates. These were
discussed and agreed with Coordinator Fleet Management based on the tasks recommended
n the number of services (minor and major) by dividing the utilisation by the service
interval or recommended minimum time. Round the number of services down to nearest
Provision for scheduled maintenance is made based on agreed ratios for each item of
Allocate a percentage allowance for repairs. The allowance will be higher for high wear/tear
allowance based on
age of the fleet, local conditions, experience and in liaison with mechanical maintenance staff.
Allow a percentage of labour hours for administrative tasks such as completing job cards,
d other non mechanical tasks.
Based on the estimated flat rates we are able to calculate the number of mechanic labour
hours required to meet the scheduled service and maintenance requirements including
vide by 1400 annual hours available/mechanic to obtain the
Note: Our estimate of the labour required to maintain Council’s fleet is based on the flat rate labour hours. These
rporated within a service level agreement between fleet management and the mechanical
workshop. A ratio of scheduled maintenance to scheduled services has been applied and these rates vary
prentices we have adopted a percentage of
Our “base load” estimates for labour requirements for the mechanical workshop are calculated in the
F & Maintenance Hours HP and are
the recommended level of additional servicing and proactive safety checks in between
A ratio of scheduled to unscheduled maintenance as detailed in the XL sheet
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 80 of 131
• Up to date fleet and no items in operation beyond their optimum replacement in terms of
utilisation or age
Assumptions for Available Hours
• Workshop Supervisor wil
• Workshop Supervisor will be 80% admin / overhead at Grafton
• Of the current 2 additional 2 workshop supervisors 1 will be redeployed in a full time
Scheduling role.
• The remaining workshop supervisor will be redeployed
required to cover for the 2 workshop supervisors and the Scheduler and hence will be
available less 12 weeks (456 hrs)
• The Apprentice Mechanics will attend TAFE classes and developing skills and are available
say 50% of the time.
Available Labour Hours
Based on expected staffing levels under the 2 workshop scenario there will be 6 plant mechanics and
2 apprentices providing 9, 344 available maintenance hours which is 6.67 FTE mechanics. Refer
Table 20.
Table 20 - Available Labour Hours
Staff Annual Hours
Mechanics (5) 1,400
Redeployed Supervisor Mechanic
1,400
Less
456
Apprentices (2) 1,400
Note: Uniqco adopts 1400 as the annual available mechanic hours
Projected Minimum Labour Requirements for Mechanical Maintenance
Our first principles assessment of
requirement for 7,798 hours which equates to 5.57 FTE mechanics
• all plant/vehicles are up to date in respect to optimum replacement principles
• continued outsourcing of some light fleet servic
• mechanics are not used for non mechanical tasks which is not currently the case. We
understand mechanics are used to collect and deliver light vehicles which is not good use of a
skilled resource.
We have allowed 30% to the calculated labour requiremen
by mechanics to get to/from a job.
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
Up to date fleet and no items in operation beyond their optimum replacement in terms of
Assumptions for Available Hours
Workshop Supervisor will be fully admin / overhead at Grafton
Workshop Supervisor will be 80% admin / overhead at Grafton
Of the current 2 additional 2 workshop supervisors 1 will be redeployed in a full time
The remaining workshop supervisor will be redeployed as a mechanic but will also be
required to cover for the 2 workshop supervisors and the Scheduler and hence will be
available less 12 weeks (456 hrs)
The Apprentice Mechanics will attend TAFE classes and developing skills and are available
Based on expected staffing levels under the 2 workshop scenario there will be 6 plant mechanics and
2 apprentices providing 9, 344 available maintenance hours which is 6.67 FTE mechanics. Refer
Labour Hours
Annual Hours Total Hours % Allocated to Maintenance
400 7,000 100
400
Less
456
944 100
400 2,800 50
Note: Uniqco adopts 1400 as the annual available mechanic hours Total
FTE Mechanics = 9,344/1,400
Projected Minimum Labour Requirements for Mechanical Maintenance
Our first principles assessment of mechanical maintenance requirements indicates a minimum
requirement for 7,798 hours which equates to 5.57 FTE mechanics (refer Table 21
all plant/vehicles are up to date in respect to optimum replacement principles
continued outsourcing of some light fleet servicing
mechanics are not used for non mechanical tasks which is not currently the case. We
understand mechanics are used to collect and deliver light vehicles which is not good use of a
We have allowed 30% to the calculated labour requirement to cater for the amount of travel required
by mechanics to get to/from a job.
MECHANICAL SERVICES 81
Up to date fleet and no items in operation beyond their optimum replacement in terms of
Of the current 2 additional 2 workshop supervisors 1 will be redeployed in a full time
as a mechanic but will also be
required to cover for the 2 workshop supervisors and the Scheduler and hence will be
The Apprentice Mechanics will attend TAFE classes and developing skills and are available
Based on expected staffing levels under the 2 workshop scenario there will be 6 plant mechanics and
2 apprentices providing 9, 344 available maintenance hours which is 6.67 FTE mechanics. Refer
Total Available Hours
7,000
944
1,400
9,344 Hours
6.67 FTE
Projected Minimum Labour Requirements for Mechanical Maintenance
indicates a minimum
Table 21) provided that:
all plant/vehicles are up to date in respect to optimum replacement principles
mechanics are not used for non mechanical tasks which is not currently the case. We
understand mechanics are used to collect and deliver light vehicles which is not good use of a
t to cater for the amount of travel required
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 81 of 131
Table 21 – Calculated Mechanic Hours
Item
Plant & Heavy Vehicles
Light Fleet
Small plant
Total
Plus 30% Travel Time allowance
Total required hours
Annual hours per FTE mechanic
Calculated FTE Mechanics
Under the current 4 workshop arrangement the resource requirement is greater than with only 2
workshops because of the need for shift coverage and supervisors leave.
While this exercise is an indication there may be a surplus mechanic position in future,
to be reassessed12 months after the 2 workshops scenario is in place.
Apart from the in-house capability there is a need to have the skills and knowledge to be able to
manage external services providers. In future there will be an increasing
processes and record more information for reporting purposes and this will create a net increase in
administrative work for mechanics and reduce the time available for maintenance tasks.
RECOMMENDATION
Estimated Mechanical Maintena
Requirements
35. Council note the current level of mechanical resources
is appropriate to the size of the fleet and the challenges
of a rural environment.
36. A further resourcing assessment is undertaken 12
months following the implementation of the 2
workshops scenario.
37. Light fleet maintenance be outsourced for cars and
station wagons only. Because of operational demand
utilities continue to be serviced in house as these can
be completed when staff do not require the vehicle.
3.9. Ancillary Equipment and Minor Plant
Ancillary and minor plant and equipment
water pumps, radios, electronic sign trailers, light trailers, plate compactors, and concrete saws.
Servicing of these items is currently undertaken within the depot workshop.
Our preferred option is to charge an annual fee to the end user department for each item.
In our experience, ancillary plant and small items can easily go unnoticed within operational budgets.
Without some degree of control these minor items can become costly in terms of lost pro
operational expense.
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
Calculated Mechanic Hours
Calculated Annual Hours
3,578
719
1,701
5,998
allowance 1,800
7,798
Annual hours per FTE mechanic 1,400
5.57
Under the current 4 workshop arrangement the resource requirement is greater than with only 2
workshops because of the need for shift coverage and supervisors leave.
While this exercise is an indication there may be a surplus mechanic position in future,
to be reassessed12 months after the 2 workshops scenario is in place.
house capability there is a need to have the skills and knowledge to be able to
manage external services providers. In future there will be an increasing requirement to document
processes and record more information for reporting purposes and this will create a net increase in
administrative work for mechanics and reduce the time available for maintenance tasks.
Estimated Mechanical Maintenance Labour Impact to Organisation
Council note the current level of mechanical resources
is appropriate to the size of the fleet and the challenges
A further resourcing assessment is undertaken 12
months following the implementation of the 2
Light fleet maintenance be outsourced for cars and
station wagons only. Because of operational demand
utilities continue to be serviced in house as these can
eted when staff do not require the vehicle.
Ancillary Equipment and Minor Plant
Ancillary and minor plant and equipment includes items such as push mowers, edgers, chainsaws,
water pumps, radios, electronic sign trailers, light trailers, plate compactors, and concrete saws.
Servicing of these items is currently undertaken within the depot workshop.
o charge an annual fee to the end user department for each item.
In our experience, ancillary plant and small items can easily go unnoticed within operational budgets.
Without some degree of control these minor items can become costly in terms of lost pro
MECHANICAL SERVICES 82
Under the current 4 workshop arrangement the resource requirement is greater than with only 2
While this exercise is an indication there may be a surplus mechanic position in future, this will need
house capability there is a need to have the skills and knowledge to be able to
requirement to document
processes and record more information for reporting purposes and this will create a net increase in
administrative work for mechanics and reduce the time available for maintenance tasks.
Ease of Implementation
includes items such as push mowers, edgers, chainsaws,
water pumps, radios, electronic sign trailers, light trailers, plate compactors, and concrete saws.
o charge an annual fee to the end user department for each item.
In our experience, ancillary plant and small items can easily go unnoticed within operational budgets.
Without some degree of control these minor items can become costly in terms of lost productivity and
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 82 of 131
The following management guidelines are recommended for ancillary plant:
• Itemise every minor item and tag them with an identification number or, preferably, a bar code
which is more efficient. Simple metal tags can howe
can be monitored, these items should not be lumped into one all inclusive account where high
cost items cannot be identified.
• Develop a schedule to ensure each item is serviced at least once every 12 months and t
is tagged and recorded as serviceable.
• Ensure that internal hire rates include the cost for both the maintenance and replacement of
these items of plant. For example, when a work
basis, the vehicle hire rate as
(say a couple of dollars) to recover the costs of the ancillary plant.
• Ensure replacement criteria are established and made known to equipment maintenance staff
to avoid more money being spent o
example, it is not wise to spend 15 hours removing and replacing a piston and crankshaft in a
pump that can be replaced for $800.
• Review maintenance costs on minor equipment every six months. Items that
presented for service or maintenance may not be used regularly and may not be required at
all.
• Spare replacement items should be available for machines that are subject to heavy use to
ensure a job is not held up while the item is in the work
• Ensure new operators of minor and major items are trained on how to start and operate the
equipment and trained in the correct procedure in the case of a machine failure. Minimal
operator training on an item as small
maintenance costs.
• Develop a schedule of annual charges for these smaller items. Ensure end user managers and
supervisors are aware of the annual cost of ownership to their departments.
• Light, highly mobile items such as pumps, chainsaws and edgers are extremely difficult to
secure. It is recommended that all operators be required to present these items on a regular
basis for ongoing safety and stock
• Ancillary equipment is best controlle
efficiently serviced items in return for units requiring maintenance. A storeman can regularly
ensure all items are still issued to the person responsible for their operations. The store can
provide the facility for operational repair assessment and incident recording to ensure abuse
and mishandling issues are recorded for monitoring by management.
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
The following management guidelines are recommended for ancillary plant:
Itemise every minor item and tag them with an identification number or, preferably, a bar code
which is more efficient. Simple metal tags can however be just as effective. To ensure costs
can be monitored, these items should not be lumped into one all inclusive account where high
cost items cannot be identified.
Develop a schedule to ensure each item is serviced at least once every 12 months and t
is tagged and recorded as serviceable.
Ensure that internal hire rates include the cost for both the maintenance and replacement of
these items of plant. For example, when a work-crew needs a chainsaw on a permanent
basis, the vehicle hire rate associated with that crew can be increased by a marginal amount
(say a couple of dollars) to recover the costs of the ancillary plant.
Ensure replacement criteria are established and made known to equipment maintenance staff
to avoid more money being spent on repairs than the cost of a replacement item. For
example, it is not wise to spend 15 hours removing and replacing a piston and crankshaft in a
pump that can be replaced for $800.
Review maintenance costs on minor equipment every six months. Items that
presented for service or maintenance may not be used regularly and may not be required at
Spare replacement items should be available for machines that are subject to heavy use to
ensure a job is not held up while the item is in the workshop for a minor breakdown or service.
Ensure new operators of minor and major items are trained on how to start and operate the
equipment and trained in the correct procedure in the case of a machine failure. Minimal
operator training on an item as small as a trimmer can save time and both operational and
Develop a schedule of annual charges for these smaller items. Ensure end user managers and
supervisors are aware of the annual cost of ownership to their departments.
mobile items such as pumps, chainsaws and edgers are extremely difficult to
secure. It is recommended that all operators be required to present these items on a regular
basis for ongoing safety and stock-take purposes.
Ancillary equipment is best controlled from an issue store. The store can provide clean,
efficiently serviced items in return for units requiring maintenance. A storeman can regularly
ensure all items are still issued to the person responsible for their operations. The store can
e facility for operational repair assessment and incident recording to ensure abuse
and mishandling issues are recorded for monitoring by management.
MECHANICAL SERVICES 83
Itemise every minor item and tag them with an identification number or, preferably, a bar code
ver be just as effective. To ensure costs
can be monitored, these items should not be lumped into one all inclusive account where high
Develop a schedule to ensure each item is serviced at least once every 12 months and the item
Ensure that internal hire rates include the cost for both the maintenance and replacement of
crew needs a chainsaw on a permanent
sociated with that crew can be increased by a marginal amount
Ensure replacement criteria are established and made known to equipment maintenance staff
n repairs than the cost of a replacement item. For
example, it is not wise to spend 15 hours removing and replacing a piston and crankshaft in a
Review maintenance costs on minor equipment every six months. Items that have not been
presented for service or maintenance may not be used regularly and may not be required at
Spare replacement items should be available for machines that are subject to heavy use to
shop for a minor breakdown or service.
Ensure new operators of minor and major items are trained on how to start and operate the
equipment and trained in the correct procedure in the case of a machine failure. Minimal
as a trimmer can save time and both operational and
Develop a schedule of annual charges for these smaller items. Ensure end user managers and
supervisors are aware of the annual cost of ownership to their departments.
mobile items such as pumps, chainsaws and edgers are extremely difficult to
secure. It is recommended that all operators be required to present these items on a regular
d from an issue store. The store can provide clean,
efficiently serviced items in return for units requiring maintenance. A storeman can regularly
ensure all items are still issued to the person responsible for their operations. The store can
e facility for operational repair assessment and incident recording to ensure abuse
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 83 of 131
RECOMMENDATION
Ancillary and Minor Plant
38. A separate budget allocation is made for ancillary plant
and funds for this are recovered through an annual
charge to end users.
39. Ancillary plant and small items be subject to
accountability along the lines proposed in the report.
40. Each item of minor plant is serviced at least once every
12 months and checked for safety every 6 months by a
mechanic.
3.10. Minimising Risk in Mechanical Maintenance
Minimising Risk in the Workshop
Detailed Records
Apart from monitoring cost and performance, detailed records of servicing and repair and
maintenance are essential to avoid the issue of liability in the case of operational accidents being
open to question.
Use of Genuine Parts
Wherever possible, genuine manufacturer’s parts should be specified in repairs.
• Warranty on genuine spare parts often ensures subsequent premature failures are also
covered by warranty.
• Where evidence can be produced that genuine parts have been used, this will normally
improve the resale value.
Programmed Safety Checks
Safety checks on every item of plant and vehicle are critical.
• Miscellaneous plant must be checked every year as a minimum
• Low utilisation plant should be checked and serviced regularly (ev
ensure there is no downtime accumulated from flat batteries and the like when the plant or
vehicle is required for operational use.
Repairs to Manufacturer’s Specifications
When specifying repairs, ensure that the repair is under
specifications.
• In many circumstances items are repaired just to keep them running, but this often causes
more failures.
• Where repairs are undertaken by an in
is a greater likelihood that warranty claims will be accepted.
Review of Light Fleet & Heavy Plant
MECHANICAL
Impact to Organisation
budget allocation is made for ancillary plant
and funds for this are recovered through an annual
Ancillary plant and small items be subject to
accountability along the lines proposed in the report.
Each item of minor plant is serviced at least once every
12 months and checked for safety every 6 months by a
Minimising Risk in Mechanical Maintenance
Minimising Risk in the Workshop
Apart from monitoring cost and performance, detailed records of servicing and repair and
maintenance are essential to avoid the issue of liability in the case of operational accidents being
manufacturer’s parts should be specified in repairs.
Warranty on genuine spare parts often ensures subsequent premature failures are also
Where evidence can be produced that genuine parts have been used, this will normally
e resale value.
Programmed Safety Checks
Safety checks on every item of plant and vehicle are critical.
Miscellaneous plant must be checked every year as a minimum – 6 months recommended.
Low utilisation plant should be checked and serviced regularly (every six months minimum) to
ensure there is no downtime accumulated from flat batteries and the like when the plant or
vehicle is required for operational use.
Repairs to Manufacturer’s Specifications
When specifying repairs, ensure that the repair is undertaken to the plant or vehicle to manufacturer's
In many circumstances items are repaired just to keep them running, but this often causes
Where repairs are undertaken by an in-house workshop to manufacturer’s specification th
is a greater likelihood that warranty claims will be accepted.
MECHANICAL SERVICES 84
Ease of Implementation
Apart from monitoring cost and performance, detailed records of servicing and repair and
maintenance are essential to avoid the issue of liability in the case of operational accidents being
Warranty on genuine spare parts often ensures subsequent premature failures are also
Where evidence can be produced that genuine parts have been used, this will normally
6 months recommended.
ery six months minimum) to
ensure there is no downtime accumulated from flat batteries and the like when the plant or
taken to the plant or vehicle to manufacturer's
In many circumstances items are repaired just to keep them running, but this often causes
house workshop to manufacturer’s specification there
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 84 of 131
Avoid Specifications that are too
In writing specifications, it is important to give the supplier all of the information about what the item
will be used for to avoid the purch
• The product if what is specified cannot meet the requirements of job.
• Personal Injury as a result of the item being incorrectly used.
Undertake a Risk Assessment on New Items of Plant/vehicles
OH&S legislation places a positive obligation on employers and site/contract controllers to provide a
safe place of work, specifically requiring that all plant & equipment is safe for use.
Suppliers of plant & equipment also have a positive obligation to provide all relevant hazard
safety information to a purchaser of an item. State Regulations & the associated Code of Practice
specifies the requirement on employers to conduct plant & equipment risk assessments.
Simply put, if you supply, operate or control plant & equipment in
assessment and developing a safe system around plant is essential.
AS/NZS 4360 Risk Management Standard clarifies and confirms the process of hazard identification,
risk assessment and control to be the most effective proce
specifies a 3 stage process, and the use of the “consequence/likelihood matrix” for risk rating, and the
“hierarchy of controls”. AS/NZS 4360 is effectively echoed in State regulations and Codes of Practice,
which provide a clear expectation of employers for the process and form of plant & equipment risk
assessments.
A risk assessment should be required from suppliers as part of the tender process for new plant. The
Council should also ensure a risk assessment is undertak
the item.
Minimising Risk in Operational Use of Plant and Vehicles
Ensure Appropriate Staff Training
Staff must be adequately (and continuously) trained in the proper use of plant/vehicles/equipment.
Induction training is required each time a new item of plant/vehicle is introduced or the operator will
use an existing item for the first time. Having a licence does not ensure an operator will be familiar
with a machine they haven’t used before. This also applies
Ensure Staff have the Appropriate Licence to Operate/Drive
It is the responsibility of Operational supervisors to ensure their staff hold the necessary licenses for
the work to be performed.
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
Avoid Specifications that are too prescriptive
In writing specifications, it is important to give the supplier all of the information about what the item
will be used for to avoid the purchaser accepting liability risk for:
The product if what is specified cannot meet the requirements of job.
Personal Injury as a result of the item being incorrectly used.
Undertake a Risk Assessment on New Items of Plant/vehicles
sitive obligation on employers and site/contract controllers to provide a
safe place of work, specifically requiring that all plant & equipment is safe for use.
Suppliers of plant & equipment also have a positive obligation to provide all relevant hazard
safety information to a purchaser of an item. State Regulations & the associated Code of Practice
specifies the requirement on employers to conduct plant & equipment risk assessments.
Simply put, if you supply, operate or control plant & equipment in a workplace, conducting a risk
assessment and developing a safe system around plant is essential.
AS/NZS 4360 Risk Management Standard clarifies and confirms the process of hazard identification,
risk assessment and control to be the most effective process to conduct a risk assessment. It
specifies a 3 stage process, and the use of the “consequence/likelihood matrix” for risk rating, and the
“hierarchy of controls”. AS/NZS 4360 is effectively echoed in State regulations and Codes of Practice,
e a clear expectation of employers for the process and form of plant & equipment risk
A risk assessment should be required from suppliers as part of the tender process for new plant. The
Council should also ensure a risk assessment is undertaken after delivery and prior to operation of
Minimising Risk in Operational Use of Plant and Vehicles
Ensure Appropriate Staff Training
Staff must be adequately (and continuously) trained in the proper use of plant/vehicles/equipment.
training is required each time a new item of plant/vehicle is introduced or the operator will
use an existing item for the first time. Having a licence does not ensure an operator will be familiar
with a machine they haven’t used before. This also applies to light vehicles.
Ensure Staff have the Appropriate Licence to Operate/Drive
It is the responsibility of Operational supervisors to ensure their staff hold the necessary licenses for
MECHANICAL SERVICES 85
In writing specifications, it is important to give the supplier all of the information about what the item
sitive obligation on employers and site/contract controllers to provide a
safe place of work, specifically requiring that all plant & equipment is safe for use.
Suppliers of plant & equipment also have a positive obligation to provide all relevant hazard and
safety information to a purchaser of an item. State Regulations & the associated Code of Practice
specifies the requirement on employers to conduct plant & equipment risk assessments.
a workplace, conducting a risk
AS/NZS 4360 Risk Management Standard clarifies and confirms the process of hazard identification,
ss to conduct a risk assessment. It
specifies a 3 stage process, and the use of the “consequence/likelihood matrix” for risk rating, and the
“hierarchy of controls”. AS/NZS 4360 is effectively echoed in State regulations and Codes of Practice,
e a clear expectation of employers for the process and form of plant & equipment risk
A risk assessment should be required from suppliers as part of the tender process for new plant. The
en after delivery and prior to operation of
Staff must be adequately (and continuously) trained in the proper use of plant/vehicles/equipment.
training is required each time a new item of plant/vehicle is introduced or the operator will
use an existing item for the first time. Having a licence does not ensure an operator will be familiar
It is the responsibility of Operational supervisors to ensure their staff hold the necessary licenses for
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 85 of 131
RECOMMENDATION
Minimising Risk in Mechanical
41. In order to minimise risk the items listed in Section 3.9
of the report be included in processes and procedures.
42. Operational supervisors are reminded of their
responsibilities under OH&S laws to ensure staff are
adequately (and continuously) trained in the proper use
of plant/vehicles/equipment, noting that induction
training is required each time a new item of
plant/vehicle is introduced or the operator will use an
existing item for the first time.
3.11. Contract Maintenance on New Plant
A contract for scheduled servicing and maintenance is recommended as an option to be called when
preparing tender documents for new and replacement plant purchases
maintenance contract the following issues need to be addressed:
• Does the service provider have the necessary qualifications and specialist skills?
• Is servicing available out of hours?
• Where will the servicing be conducted?
o Breakdowns on site?
o Planned maintenance?
o Who will be responsible for transport of vehicle/plant and in what circumstances?
• What is the contract term? Are there any “out” clauses if the service level provided is not as
expected?
• What performance benchmarks will be use
o Unless fixed rates are offered by a contractor, the contractor must be subject to
meeting flat rate repair times. To not do so is to provide an open cheque book.
o A contractor shall always be responsible for rework at his cost.
• What are the downtime cost
o The cost of transporting the unit to the contractor’s workshop facility must be added to
the contractor’s price unless the contractor has a mobile service or the work can be
undertaken in the client’s workshop.
• Total cost comparisons between options
o Tendered prices
o Downtime comparisons
o Transport and labour taking plant to and from the service provider
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
Minimising Risk in Mechanical Maintenance Impact to Organisation
In order to minimise risk the items listed in Section 3.9
of the report be included in processes and procedures.
Operational supervisors are reminded of their
responsibilities under OH&S laws to ensure staff are
adequately (and continuously) trained in the proper use
of plant/vehicles/equipment, noting that induction
training is required each time a new item of
plant/vehicle is introduced or the operator will use an
existing item for the first time.
Contract Maintenance on New Plant
A contract for scheduled servicing and maintenance is recommended as an option to be called when
preparing tender documents for new and replacement plant purchases. When assessing a
maintenance contract the following issues need to be addressed:
Does the service provider have the necessary qualifications and specialist skills?
Is servicing available out of hours?
Where will the servicing be conducted?
on site?
Planned maintenance?
Who will be responsible for transport of vehicle/plant and in what circumstances?
What is the contract term? Are there any “out” clauses if the service level provided is not as
What performance benchmarks will be used?
Unless fixed rates are offered by a contractor, the contractor must be subject to
meeting flat rate repair times. To not do so is to provide an open cheque book.
A contractor shall always be responsible for rework at his cost.
What are the downtime costs?
The cost of transporting the unit to the contractor’s workshop facility must be added to
the contractor’s price unless the contractor has a mobile service or the work can be
undertaken in the client’s workshop.
Total cost comparisons between options
ndered prices
Downtime comparisons
Transport and labour taking plant to and from the service provider
MECHANICAL SERVICES 86
Ease of Implementation
A contract for scheduled servicing and maintenance is recommended as an option to be called when
. When assessing a
Does the service provider have the necessary qualifications and specialist skills?
Who will be responsible for transport of vehicle/plant and in what circumstances?
What is the contract term? Are there any “out” clauses if the service level provided is not as
Unless fixed rates are offered by a contractor, the contractor must be subject to
meeting flat rate repair times. To not do so is to provide an open cheque book.
The cost of transporting the unit to the contractor’s workshop facility must be added to
the contractor’s price unless the contractor has a mobile service or the work can be
Transport and labour taking plant to and from the service provider
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 86 of 131
The following assessment matrix shown in
a contractor with the in house team.
Table 22 –Maintenance Contract Assessment Matrix
Selection Criteria
Weight Factor
Specialist Skills 20
Out of Hours Servicing
15
Field Servicing 15
Warranty 5
Cost 35
Benchmarking 5
Downtime 5
TOTALS: 100
RECOMMENDATION
Contract Maintenance
43. For new and replacement plant &
where practical a contract maintenance option be
included as part of the tender specification.
3.12. Service Level Agreements (SLA’s)
In our experience the SLA approach to managing the servicing, maintenance and repairs to plant and
vehicles can deliver improved service and cost control and we recommend a service level agreement
is put in place with all external service providers. All agreements need to provide clear definitions of
responsibility and guidelines to follow when performance requirements are not met. A draft service
level agreement is attached in Appendix 8
Uniqco clients.
RECOMMENDATION
Service Level Agreements
44. Service level agreements are put in place with regular
external service providers when work is outsourced.
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
The following assessment matrix shown in Table 22 provides a mechanism to compare contractors or
a contractor with the in house team.
Maintenance Contract Assessment Matrix
Maintenance Service Provider
Supplier 1 Supplier
Score Total Score
Impact to Organisation
For new and replacement plant & vehicle purchases,
where practical a contract maintenance option be
included as part of the tender specification.
Level Agreements (SLA’s)
In our experience the SLA approach to managing the servicing, maintenance and repairs to plant and
vehicles can deliver improved service and cost control and we recommend a service level agreement
service providers. All agreements need to provide clear definitions of
responsibility and guidelines to follow when performance requirements are not met. A draft service
Appendix 8. The draft SLA is based on agreements in pla
Impact to Organisation
Service level agreements are put in place with regular
external service providers when work is outsourced.
MECHANICAL SERVICES 87
provides a mechanism to compare contractors or
Maintenance Service Provider
Supplier 2
Total
Ease of Implementation
In our experience the SLA approach to managing the servicing, maintenance and repairs to plant and
vehicles can deliver improved service and cost control and we recommend a service level agreement
service providers. All agreements need to provide clear definitions of
responsibility and guidelines to follow when performance requirements are not met. A draft service
. The draft SLA is based on agreements in place at other
Ease of Implementation
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 87 of 131
3.13. Summary Mechanical Workshop Best Practice
Figure 4 – Mechanical Workshop Best Practice
Source: IPWEA Plant & Vehicle Management Manual Section 11.
Review of Light Fleet & Heavy Plant
MECHANICAL SERVICES
Summary Mechanical Workshop Best Practice
Mechanical Workshop Best Practice
Source: IPWEA Plant & Vehicle Management Manual Section 11.
MECHANICAL SERVICES 88
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 88 of 131
4. MANAGEMENT
4.1. Introduction
Plant & Fleet represents a significant organisational expenditure that requires competent and ongoing
management.
Apart from ensuring value for money is achieved from procurement and operational performance,
actively managing the plant and vehicle fleet is essential in delivering efficient works and services in
public works
Managing the mechanical plant and vehicle fleet like any other resource requires accurate, reliable,
timely, relevant and quantifiable information. The lack of
plant and fleet at Clarence Valley poses a high risk for the Council not only in cost risk but also Work
Health & Safety risk and risk of legal compliance is a big issue and cannot be understated
Such data is required to set charge out rates for full cost recovery, undertake buy / hire business case
assessments, develop maintenance programs and set service and works programs and budgets.
Plant and vehicle fleet items are capital goods that need to be treated and ac
way to fixed capital assets such as land and buildings. Applying systematic analysis to the
procurement, management and maintenance of the fleet will provide a foundation to maximise the
return on investment.
In our experience our recommendations for change, if accepted, will not be successfully implemented
without the full support of senior management. It is also critical that management has an
understanding of the drivers for improvement and is involved in the change process.
Uniqco has developed its own reporting system and tailored management reports that provide the
assessment framework to deliver performance monitoring and improvement through the KPI’s
recommended in the IPWEA best practice Plant & Vehicle Management Manual
Our focus in this section is management issues in relation to fleet including:
• Fleet Management Reporting
• Governance
• Procurement
• 10 Year Plant & Vehicle Replacement Plan
• Funding the Plant & Vehicle Fleet
• Chain of Responsibility
• Fleet Management – Structure, Staff Skills and Knowledge Transfer
• Assessment Framework
Review of Light Fleet & Heavy Plant
MANAGEMENT
Plant & Fleet represents a significant organisational expenditure that requires competent and ongoing
Apart from ensuring value for money is achieved from procurement and operational performance,
lant and vehicle fleet is essential in delivering efficient works and services in
Managing the mechanical plant and vehicle fleet like any other resource requires accurate, reliable,
timely, relevant and quantifiable information. The lack of useable information for the management of
plant and fleet at Clarence Valley poses a high risk for the Council not only in cost risk but also Work
Health & Safety risk and risk of legal compliance is a big issue and cannot be understated
red to set charge out rates for full cost recovery, undertake buy / hire business case
assessments, develop maintenance programs and set service and works programs and budgets.
Plant and vehicle fleet items are capital goods that need to be treated and accounted for in a similar
way to fixed capital assets such as land and buildings. Applying systematic analysis to the
procurement, management and maintenance of the fleet will provide a foundation to maximise the
recommendations for change, if accepted, will not be successfully implemented
without the full support of senior management. It is also critical that management has an
understanding of the drivers for improvement and is involved in the change process.
Uniqco has developed its own reporting system and tailored management reports that provide the
assessment framework to deliver performance monitoring and improvement through the KPI’s
recommended in the IPWEA best practice Plant & Vehicle Management Manual.
Our focus in this section is management issues in relation to fleet including:
Fleet Management Reporting
10 Year Plant & Vehicle Replacement Plan
Funding the Plant & Vehicle Fleet
Structure, Staff Skills and Knowledge Transfer
Assessment Framework
MANAGEMENT 89
Plant & Fleet represents a significant organisational expenditure that requires competent and ongoing
Apart from ensuring value for money is achieved from procurement and operational performance,
lant and vehicle fleet is essential in delivering efficient works and services in
Managing the mechanical plant and vehicle fleet like any other resource requires accurate, reliable,
useable information for the management of
plant and fleet at Clarence Valley poses a high risk for the Council not only in cost risk but also Work
Health & Safety risk and risk of legal compliance is a big issue and cannot be understated
red to set charge out rates for full cost recovery, undertake buy / hire business case
assessments, develop maintenance programs and set service and works programs and budgets.
counted for in a similar
way to fixed capital assets such as land and buildings. Applying systematic analysis to the
procurement, management and maintenance of the fleet will provide a foundation to maximise the
recommendations for change, if accepted, will not be successfully implemented
without the full support of senior management. It is also critical that management has an
understanding of the drivers for improvement and is involved in the change process.
Uniqco has developed its own reporting system and tailored management reports that provide the
assessment framework to deliver performance monitoring and improvement through the KPI’s
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 89 of 131
4.2. Fleet Management Reporting
Council is reliant on the TechnologyOne
managing the fleet. We understand that there
management or financial reports available since use of AusFleet ceased.
address this shortfall we are unaware of the details.
Fleet staff are currently unable to monitor utilisation of the fleet and fuel data
TechnologyOne system.
As a result the management reports needed to monitor fleet KPI’s and minimise life cycle costs are
not currently available. More effective fleet management reporting is considered one of the highest
priorities for optimising plant & fleet utilisation, reducing fleet life cycle costs and minimising financial
and WHS risk.
Reporting for financial risk by asset includes:
• A Plant and Equipment List
registration number, serial number, supplier, the purchase date and the current engine hour
and/or kilometres registered on that plant item.
• Utilisation - provides data on actual utilisation versus projected utilisation and a comparison
of timesheet hours allocated to t
• Fuel Consumption in litres per 100km but also ‘over a given period per plant item and/or
per department’ and Fuel Consumption analysis.
• Fuel Tax credit and FBT liability reporting
• Income & Budget Vs Actual
actual and allowing for adjustments to eliminate overrun and under
• Downtime all costs associated with an item of the fleet being out of action for repairs or
maintenance other than the costs of the work on the item.
• 10 Year Replacement program
Reporting for workplace health and safety risk includes:
• Optimum replacement timing
• Services Due and Complete
• Maintenance Failure Records
owner.
• Scheduled Maintenance due
manner and electronic records are regularly maintained for every asset including
• Scheduled Vs Unscheduled labour hours
maintenance that equals 70% of scheduled maintenance
Most of the above items have been discussed in the earlier sections of this report other than
Consumption.
Review of Light Fleet & Heavy Plant
MANAGEMENT
Fleet Management Reporting
Council is reliant on the TechnologyOne - Work & Assets module and Excel spreadsheets for
managing the fleet. We understand that there has been no formal specific fleet performance
or financial reports available since use of AusFleet ceased. While there are plans to
address this shortfall we are unaware of the details.
unable to monitor utilisation of the fleet and fuel data is unavailable in the
As a result the management reports needed to monitor fleet KPI’s and minimise life cycle costs are
not currently available. More effective fleet management reporting is considered one of the highest
or optimising plant & fleet utilisation, reducing fleet life cycle costs and minimising financial
Reporting for financial risk by asset includes:
A Plant and Equipment List - includes the plant number, the make, the model, the
mber, serial number, supplier, the purchase date and the current engine hour
and/or kilometres registered on that plant item.
provides data on actual utilisation versus projected utilisation and a comparison
of timesheet hours allocated to the plant.
in litres per 100km but also ‘over a given period per plant item and/or
per department’ and Fuel Consumption analysis.
Fuel Tax credit and FBT liability reporting
Income & Budget Vs Actual providing a detailed analysis of budget expenditure, verses
actual and allowing for adjustments to eliminate overrun and under-recovery.
all costs associated with an item of the fleet being out of action for repairs or
maintenance other than the costs of the work on the item.
eplacement program based on km or engines or years.
Reporting for workplace health and safety risk includes:
Optimum replacement timing in years or actual utilisation whichever occurs first
Services Due and Complete based on manufacturers recommendations
Maintenance Failure Records type of failure. Reason for the failures by driver and/or
Scheduled Maintenance due to ensure that all maintenance is undertaken in a timely
manner and electronic records are regularly maintained for every asset including
Scheduled Vs Unscheduled labour hours for highlighting where assets have unscheduled
maintenance that equals 70% of scheduled maintenance
Most of the above items have been discussed in the earlier sections of this report other than
MANAGEMENT 90
Work & Assets module and Excel spreadsheets for
performance
While there are plans to
is unavailable in the
As a result the management reports needed to monitor fleet KPI’s and minimise life cycle costs are
not currently available. More effective fleet management reporting is considered one of the highest
or optimising plant & fleet utilisation, reducing fleet life cycle costs and minimising financial
includes the plant number, the make, the model, the
mber, serial number, supplier, the purchase date and the current engine hour
provides data on actual utilisation versus projected utilisation and a comparison
in litres per 100km but also ‘over a given period per plant item and/or
expenditure, verses
recovery.
all costs associated with an item of the fleet being out of action for repairs or
in years or actual utilisation whichever occurs first
based on manufacturers recommendations
type of failure. Reason for the failures by driver and/or
to ensure that all maintenance is undertaken in a timely
manner and electronic records are regularly maintained for every asset including minor plant
for highlighting where assets have unscheduled
Most of the above items have been discussed in the earlier sections of this report other than Fuel
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 90 of 131
Fuel consumption in litres per hundred kilometres or litres per engine hour is an important
performance measure and unless closely monitored can be the source of avoidable financial losses.
It is important accurate records are maintained
the plant number and mileage or engine hours of the item requiring the fuel. This is particularly
important where items are refuelled from a bulk fuel trailer/tanker in the field. The fuel needs to be
correctly allocated to the receiving item and the mileage/engine hours recorded in order to accurately
calculate utilisation and allocate fuel costs.
Accurate fuel data allocation will also maximise fuel rebates. We understand Finance is responsible
for this activity.
Fuel Management is also important as fuel issued to a plant and vehicle fleet located over a wide
geographical area needs to be well controlled and accounted for.
All fuel issued needs to be allocated to a vehicle or plant number and reconciled
fuel consumption of the equipment.
Each fuel transaction record needs a date, time, litres pumped, plant number or rego number of the
vehicle or plant it is issued to, and the kilometre or engine hour meter reading. The fuel transacti
for plant and fleet that is refuelled from bulk tanks at remote locations also needs to be recorded. The
process would begin with recording the fuel issued to a bulk tank, and then allocating it to that bulk
tank. The fuel pumped from the bulk tank in
total litres issued to ensure no leakage from the bulk tank has occurred.
The reconciliation process is similar whether issues are made to a bulk tank, or directly via a fuel
card, to equipment that has no hour meter, such as pumps, chainsaws, lighting plant, mowers, etc.
The bulk issue can be made to a number of assets, and there is no need to itemise each item’s fuel
usage, e.g. 2 litres to a chainsaw. All fuel issued to the non
the number of small plant items allocated to that tank or fuel card.
Reconciliation of fuel issues has a number of advantages:
• Cost control on fuel
• Reduced fuel leakage (a potential environmental issue)
• Fuel usage records are easily
• Many items have significant tax benefits through fuel tax rebate claims.
RECOMMENDATION
Fleet Management Reporting
45. Fleet management reporting is given a priority in order
to optimising plant & fleet utilisation, reducing fleet life
cycle costs and minimising financial and WHS risk.
46. Accurate records are maintained of the type and
amount of fuel issued, together with the plant number
and mileage or engine hours of the item receiving the
fuel including where items are refuelled from a bulk fuel
trailer/tanker in the field.
Review of Light Fleet & Heavy Plant
MANAGEMENT
Fuel consumption in litres per hundred kilometres or litres per engine hour is an important
performance measure and unless closely monitored can be the source of avoidable financial losses.
It is important accurate records are maintained of the type and amount of fuel issued, together with
the plant number and mileage or engine hours of the item requiring the fuel. This is particularly
important where items are refuelled from a bulk fuel trailer/tanker in the field. The fuel needs to be
orrectly allocated to the receiving item and the mileage/engine hours recorded in order to accurately
calculate utilisation and allocate fuel costs.
Accurate fuel data allocation will also maximise fuel rebates. We understand Finance is responsible
is also important as fuel issued to a plant and vehicle fleet located over a wide
geographical area needs to be well controlled and accounted for.
All fuel issued needs to be allocated to a vehicle or plant number and reconciled using the estimated
fuel consumption of the equipment.
Each fuel transaction record needs a date, time, litres pumped, plant number or rego number of the
vehicle or plant it is issued to, and the kilometre or engine hour meter reading. The fuel transacti
for plant and fleet that is refuelled from bulk tanks at remote locations also needs to be recorded. The
process would begin with recording the fuel issued to a bulk tank, and then allocating it to that bulk
tank. The fuel pumped from the bulk tank into plant and vehicle items is then reconciled back to the
total litres issued to ensure no leakage from the bulk tank has occurred.
The reconciliation process is similar whether issues are made to a bulk tank, or directly via a fuel
has no hour meter, such as pumps, chainsaws, lighting plant, mowers, etc.
The bulk issue can be made to a number of assets, and there is no need to itemise each item’s fuel
usage, e.g. 2 litres to a chainsaw. All fuel issued to the non-metered equipment is then reconciled to
the number of small plant items allocated to that tank or fuel card.
Reconciliation of fuel issues has a number of advantages:
Reduced fuel leakage (a potential environmental issue)
Fuel usage records are easily converted to total carbon CO2 output (environmental reporting)
Many items have significant tax benefits through fuel tax rebate claims.
Fleet Management Reporting Impact to Organisation
Fleet management reporting is given a priority in order
to optimising plant & fleet utilisation, reducing fleet life
cycle costs and minimising financial and WHS risk.
Accurate records are maintained of the type and
amount of fuel issued, together with the plant number
and mileage or engine hours of the item receiving the
fuel including where items are refuelled from a bulk fuel
MANAGEMENT 91
Fuel consumption in litres per hundred kilometres or litres per engine hour is an important
performance measure and unless closely monitored can be the source of avoidable financial losses.
of the type and amount of fuel issued, together with
the plant number and mileage or engine hours of the item requiring the fuel. This is particularly
important where items are refuelled from a bulk fuel trailer/tanker in the field. The fuel needs to be
orrectly allocated to the receiving item and the mileage/engine hours recorded in order to accurately
Accurate fuel data allocation will also maximise fuel rebates. We understand Finance is responsible
is also important as fuel issued to a plant and vehicle fleet located over a wide
using the estimated
Each fuel transaction record needs a date, time, litres pumped, plant number or rego number of the
vehicle or plant it is issued to, and the kilometre or engine hour meter reading. The fuel transactions
for plant and fleet that is refuelled from bulk tanks at remote locations also needs to be recorded. The
process would begin with recording the fuel issued to a bulk tank, and then allocating it to that bulk
to plant and vehicle items is then reconciled back to the
The reconciliation process is similar whether issues are made to a bulk tank, or directly via a fuel
has no hour meter, such as pumps, chainsaws, lighting plant, mowers, etc.
The bulk issue can be made to a number of assets, and there is no need to itemise each item’s fuel
is then reconciled to
output (environmental reporting)
Ease of Implementation
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 91 of 131
4.3. GPS
At face value GPS is an excellent fleet management tool however research shows that the level of
data GPS provides is often overwhelmi
be $200 plus installation and then $7.00 to $25 a month depending on what data is to be retrieved.
Positives of GPS
• You can immediately locate a vehicle, and allow for remote distress signals worker) but the worker has to be in or near t
• Accurate engine hour meter and odometer readings can be obtained. There is no human error induced by manual mileage entry.service scheduling.
• Analysing productivity. Can detect when vehicles are operating inefficiently or outside zones. Even with GPS it can still be
• Effective tool for measuring productivity of roadmarking, bitumen spray trucks.provide information that may improve productivity
• Knowing where a council vehicle is at any time. Closest vehicle to be response.
• Accurate response to ratepayer complaints, accidents, traffic fines by knowing when and where a vehicle had been or a service was provided eg missed rubbish bins.
Negatives GPS
• Too much information that then has to be inteinformation.
• Cost based on say $15 a month for 400 vehicles costs. Estimate = $80,000 a year
• GPS does not collect maintenance data (to comply with maintenance guidelines)• To integrate GPS data into corporate governance systems (finance) does not improve the
value of the information.
RECOMMENDATION
47. GPS units are only used to gather data to improve
productivity or improve the
provided for remotely located assets
Review of Light Fleet & Heavy Plant
MANAGEMENT
At face value GPS is an excellent fleet management tool however research shows that the level of
data GPS provides is often overwhelming and of little commercial use. The average cost of GPS can
be $200 plus installation and then $7.00 to $25 a month depending on what data is to be retrieved.
You can immediately locate a vehicle, and allow for remote distress signals worker) but the worker has to be in or near the vehicle to activate. Accurate engine hour meter and odometer readings can be obtained. There is no human error induced by manual mileage entry. Accuracy of utilisation data results in i
. Can detect when vehicles are operating inefficiently or outside zones. Even with GPS it can still be difficult to define if the asset is actually working.
measuring productivity of road sweepers, waste collection vehicles, marking, bitumen spray trucks. All these vehicles have other functions that if measured can provide information that may improve productivity. Knowing where a council vehicle is at any time. Closest vehicle to be deployed in emergency
Accurate response to ratepayer complaints, accidents, traffic fines by knowing when and where a vehicle had been or a service was provided eg missed rubbish bins.
Too much information that then has to be interpreted (at a cost) to convert to useful
Cost based on say $15 a month for 400 vehicles = $72,000 plus the associated hardware = $80,000 a year.
GPS does not collect maintenance data (to comply with maintenance guidelines)integrate GPS data into corporate governance systems (finance) does not improve the
.
Impact to Organisation
GPS units are only used to gather data to improve
or improve the engine hour or mileage data
provided for remotely located assets.
MANAGEMENT 92
At face value GPS is an excellent fleet management tool however research shows that the level of
The average cost of GPS can
be $200 plus installation and then $7.00 to $25 a month depending on what data is to be retrieved.
You can immediately locate a vehicle, and allow for remote distress signals (unaccompanied
Accurate engine hour meter and odometer readings can be obtained. There is no human Accuracy of utilisation data results in improved
. Can detect when vehicles are operating inefficiently or outside zones. if the asset is actually working.
waste collection vehicles, line All these vehicles have other functions that if measured can
deployed in emergency
Accurate response to ratepayer complaints, accidents, traffic fines by knowing when and where a vehicle had been or a service was provided eg missed rubbish bins.
) to convert to useful
$72,000 plus the associated hardware
GPS does not collect maintenance data (to comply with maintenance guidelines). integrate GPS data into corporate governance systems (finance) does not improve the
Ease of Implementation
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 92 of 131
4.4. Governance in Fleet
For Uniqco, governance in fleet means:
• Implementation of the Fleet Policy;
• Defining an accountability framework for decision making;
• Providing appropriate, timely and robust reporting cycle to the Executive;
• Identifying and escalating key risks to the appropriate level;
• Application of the Delegated Levels of Authority;
• Using the process to drive decisions; and
• Providing a strategic poin
To deliver a fleet policy at Clarence Valley there are a number of elements to address and these are
depicted in Figure 5.
Mobile plant and equipment engaged by Clarence Valley Council represents a significant investment
to the Council and management must ensure correct governance is applied to:
• Management of the asset over its whole of life cycle;
• Accountability regardless of ownership of plant assets (own, hire or lease);
• Communication and relationships with fleet servic
• Financial risk management;
• Financial accountability for funding plant maintenance and replacement;
• Operator training and OHS risk; and
• Both the on road and maintenance Chains of Responsibilities.
Executive Management participation in the ch
governance issues and KPI’s.
Figure 5 Governance in Fleet
Vehicle Specification / Configuration
Fleet and Vehicle
Procurement
Review of Light Fleet & Heavy Plant
MANAGEMENT
Governance in Fleet
For Uniqco, governance in fleet means:
Implementation of the Fleet Policy;
Defining an accountability framework for decision making;
Providing appropriate, timely and robust reporting cycle to the Executive;
Identifying and escalating key risks to the appropriate level;
Application of the Delegated Levels of Authority;
Using the process to drive decisions; and
Providing a strategic point of view for future investment.
To deliver a fleet policy at Clarence Valley there are a number of elements to address and these are
Mobile plant and equipment engaged by Clarence Valley Council represents a significant investment
the Council and management must ensure correct governance is applied to:
Management of the asset over its whole of life cycle;
Accountability regardless of ownership of plant assets (own, hire or lease);
Communication and relationships with fleet service providers;
Financial risk management;
Financial accountability for funding plant maintenance and replacement;
Operator training and OHS risk; and
Both the on road and maintenance Chains of Responsibilities.
Executive Management participation in the change process is crucial as will be familiarity with Fleet
Clarence Valley Council
Fleet Policy
Governance & Reporting
Processes, Tools & Systems
Fleet and Vehicle Selection &
Procurement
Operations &
Performance
ManagementConsiderations &
Opportunities
MANAGEMENT 93
To deliver a fleet policy at Clarence Valley there are a number of elements to address and these are
Mobile plant and equipment engaged by Clarence Valley Council represents a significant investment
Accountability regardless of ownership of plant assets (own, hire or lease);
ange process is crucial as will be familiarity with Fleet
Disposal
Considerations & Opportunities
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 93 of 131
4.5. Procurement – Category Management Fleet
Fleet is an area of Procurement Category Management that requires the application of rigorous best
practice to ensure a best value and compliance outcome. Ever
the fleet sector provides unique challenges to fleet, operat
While cost control is an underlying goal, successful fleet category management also requires
significant management of risk and compliance issues if the asset is to meet organisational goals.
In our experience, fleet legislation has become intensely wide
much of this relates to the need for an employer to provide an adequate duty of care, not only to its
employees but also to other road users where the fleet is on
An accident involving fleet could easily result in a large fine or even jail sentences for company
directors, when the law considers that there has been a catastrophic failure to provide duty of care.
Whether dealing with heavy duty vehicles, light commercials and cars or bo
should ensure that they are fully conversant with all of the legislation surrounding the duty of care for
operating fleets.
Legally a vehicle used for work counts as a workplace, so the responsibility for safety rests with the
employer as it would in an office, factory or other working location. The law says you must be doing
everything reasonably practical to ensure the health and safety of your workers, so letting someone
drive a vehicle for work without knowing the maintenance hi
gamble.
It’s therefore imperative that fleet, operations and procurement work to ensure the organisation is out
of a risk position and ensure they are compliant.
Best Value
A weighted analysis is currently being used for assessment purposes and the criteria and weightings
used are:
• Whole of Life Costs 40%
• Operational Requirements 20%
• Mechanical Assessment 12.5%
• Operators Assessment 12.5%
• Warranty/Service/Backup 15%
Provided this process is formally documente
and suggest for the specific issues faced at Clarence Valley the weightings be slightly amended to:
• Whole of Life Costs 40%
• Operational Requirements 20%
• Mechanical Assessment 10
• Operators Assessment 15%
• Warranty/Service/Backup 15
Review of Light Fleet & Heavy Plant
MANAGEMENT
Category Management Fleet
Fleet is an area of Procurement Category Management that requires the application of rigorous best
practice to ensure a best value and compliance outcome. Ever-changing and complex legislation in
the fleet sector provides unique challenges to fleet, operational and procurement managers.
While cost control is an underlying goal, successful fleet category management also requires
significant management of risk and compliance issues if the asset is to meet organisational goals.
ation has become intensely wide-ranging and full of complexity and
much of this relates to the need for an employer to provide an adequate duty of care, not only to its
employees but also to other road users where the fleet is on-road.
g fleet could easily result in a large fine or even jail sentences for company
directors, when the law considers that there has been a catastrophic failure to provide duty of care.
Whether dealing with heavy duty vehicles, light commercials and cars or both, procurement managers
should ensure that they are fully conversant with all of the legislation surrounding the duty of care for
Legally a vehicle used for work counts as a workplace, so the responsibility for safety rests with the
oyer as it would in an office, factory or other working location. The law says you must be doing
everything reasonably practical to ensure the health and safety of your workers, so letting someone
drive a vehicle for work without knowing the maintenance history or registration status is a very large
It’s therefore imperative that fleet, operations and procurement work to ensure the organisation is out
of a risk position and ensure they are compliant.
being used for assessment purposes and the criteria and weightings
Whole of Life Costs 40%
Operational Requirements 20%
Mechanical Assessment 12.5%
Operators Assessment 12.5%
Warranty/Service/Backup 15%
Provided this process is formally documented this is best practice. We support the criteria being used
and suggest for the specific issues faced at Clarence Valley the weightings be slightly amended to:
Whole of Life Costs 40%
Operational Requirements 20%
Mechanical Assessment 10%
ent 15%
Warranty/Service/Backup 15% (Local Support)
MANAGEMENT 94
Fleet is an area of Procurement Category Management that requires the application of rigorous best
changing and complex legislation in
ional and procurement managers.
While cost control is an underlying goal, successful fleet category management also requires
significant management of risk and compliance issues if the asset is to meet organisational goals.
ranging and full of complexity and
much of this relates to the need for an employer to provide an adequate duty of care, not only to its
g fleet could easily result in a large fine or even jail sentences for company
directors, when the law considers that there has been a catastrophic failure to provide duty of care.
th, procurement managers
should ensure that they are fully conversant with all of the legislation surrounding the duty of care for
Legally a vehicle used for work counts as a workplace, so the responsibility for safety rests with the
oyer as it would in an office, factory or other working location. The law says you must be doing
everything reasonably practical to ensure the health and safety of your workers, so letting someone
story or registration status is a very large
It’s therefore imperative that fleet, operations and procurement work to ensure the organisation is out
being used for assessment purposes and the criteria and weightings
d this is best practice. We support the criteria being used
and suggest for the specific issues faced at Clarence Valley the weightings be slightly amended to:
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 94 of 131
The IPWEA best practice Plant & Vehicle Management Manual provides guidelines for preparing
tender specifications and assessing plant & vehicle tender submissions.
In addition the following guidelines ar
• Undertake an operational assessment when an item is to be changed. Interview the operators
and review the specification to meet operational needs where applicable. Operators will
appreciate the time taken to pro
operational and capital costs may be found through the consultation process.
manufacturers design plant/vehicles to within load and operational tolerances. Ensure
operators are aware of these toler
failures resulting in increased costs.
• When specifying vehicles, explain the role the vehicle has to play. Describe the annual
kilometres the vehicle is expected to travel, the type of loads it will be
how the truck will be loaded. Let the manufacturers offer a vehicle they believe is suitable.
• Ensure the Request for tender/quotation clearly spells out the supplier’s responsibilities if the
vehicle supplied does not meet the spec
that will allow the return of the vehicle with all costs and expenditure refunded, and the supply
of a suitable replacement vehicle that will meet the specified requirements.
• Don’t be too specific when s
changes. Manufacturers will offer upgraded technology while the specification is based on
older technology for which a premium may be paid.
• All new trucks are required to comply with Australia
rules cover the fitting of mirrors, seatbelts, bodies, tow hitches, rims/tyres and exhaust
locations. It is important to understand these rules and not specify modifications outside the
rule requirements.
RECOMMENDATION
Governance in Fleet
48. The assessment criteria and methodology detailed in
the IPWEA best practice Plant & Vehicle Management
Manual be adopted for the analysis of tenders and
quotations.
49. Fleet Management and Procurement should jointly and
comprehensively document procedures that govern the
various steps in the procurement process under their
control. Such documentation should be extensively
used for training purposes and should be easily
accessible to staff who handle these functions
50. It is good practice to include supplier measurement and
monitoring in all contracts so that quality, price, delivery
and service level can be monitored
51. All stages of the procurement process are fully
documented to ensure governance compliance.
Review of Light Fleet & Heavy Plant
MANAGEMENT
The IPWEA best practice Plant & Vehicle Management Manual provides guidelines for preparing
tender specifications and assessing plant & vehicle tender submissions.
In addition the following guidelines are put forward to minimise procurement risk
Undertake an operational assessment when an item is to be changed. Interview the operators
and review the specification to meet operational needs where applicable. Operators will
appreciate the time taken to provide for operational needs, and opportunities to save
operational and capital costs may be found through the consultation process.
manufacturers design plant/vehicles to within load and operational tolerances. Ensure
operators are aware of these tolerances as overstressing vehicles can cause substantial
failures resulting in increased costs.
When specifying vehicles, explain the role the vehicle has to play. Describe the annual
kilometres the vehicle is expected to travel, the type of loads it will be expected to carry and
how the truck will be loaded. Let the manufacturers offer a vehicle they believe is suitable.
Ensure the Request for tender/quotation clearly spells out the supplier’s responsibilities if the
vehicle supplied does not meet the specification limits. Make sure conditions are included
that will allow the return of the vehicle with all costs and expenditure refunded, and the supply
of a suitable replacement vehicle that will meet the specified requirements.
Don’t be too specific when specifying a body or vehicle because vehicle design continuously
changes. Manufacturers will offer upgraded technology while the specification is based on
older technology for which a premium may be paid.
All new trucks are required to comply with Australian Design Rules (ADR’s). These design
rules cover the fitting of mirrors, seatbelts, bodies, tow hitches, rims/tyres and exhaust
locations. It is important to understand these rules and not specify modifications outside the
Impact to Organisation
The assessment criteria and methodology detailed in
the IPWEA best practice Plant & Vehicle Management
Manual be adopted for the analysis of tenders and
Fleet Management and Procurement should jointly and
comprehensively document procedures that govern the
procurement process under their
control. Such documentation should be extensively
used for training purposes and should be easily
accessible to staff who handle these functions.
It is good practice to include supplier measurement and
monitoring in all contracts so that quality, price, delivery
and service level can be monitored.
All stages of the procurement process are fully
documented to ensure governance compliance.
MANAGEMENT 95
The IPWEA best practice Plant & Vehicle Management Manual provides guidelines for preparing
minimise procurement risk.
Undertake an operational assessment when an item is to be changed. Interview the operators
and review the specification to meet operational needs where applicable. Operators will
vide for operational needs, and opportunities to save
operational and capital costs may be found through the consultation process. All
manufacturers design plant/vehicles to within load and operational tolerances. Ensure
ances as overstressing vehicles can cause substantial
When specifying vehicles, explain the role the vehicle has to play. Describe the annual
expected to carry and
how the truck will be loaded. Let the manufacturers offer a vehicle they believe is suitable.
Ensure the Request for tender/quotation clearly spells out the supplier’s responsibilities if the
ification limits. Make sure conditions are included
that will allow the return of the vehicle with all costs and expenditure refunded, and the supply
of a suitable replacement vehicle that will meet the specified requirements.
pecifying a body or vehicle because vehicle design continuously
changes. Manufacturers will offer upgraded technology while the specification is based on
n Design Rules (ADR’s). These design
rules cover the fitting of mirrors, seatbelts, bodies, tow hitches, rims/tyres and exhaust
locations. It is important to understand these rules and not specify modifications outside the
Ease of Implementation
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 95 of 131
4.6. Ten Year Plant & Vehicle Replacement Plan (Refer separate XL sheet)
Our draft 10 year plant & vehicle replacement plan
average annual funding requirement of $2,
points recommended in the IPWEA best Practice Plant & Vehicle Management Manual. The current
funding gap is $2,485,858. ie the difference between the Year 1 funding requirement of $
and the average annual funding requirement of $
Table 23 - Ten Year Plant & Vehicle Replacement Summary Funding Requirement
1
2
3
4
5
6
7
8
9
10
Figure 6 – Ten Year Plant & Vehicle Replacement Funding Chart
Our recommended strategies to deal with the funding gap are:
• Subject to a risk assessment deferring low utilisation items including the graders.
• Leasing heavy plant and vehicles with predictable utilisation
deferring their replacement.
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Review of Light Fleet & Heavy Plant
MANAGEMENT
Ten Year Plant & Vehicle Replacement Plan (Refer separate XL sheet)
10 year plant & vehicle replacement plan for the plant and heavy fleet, indicates an
average annual funding requirement of $2,841,130 is required based on the optimum changeover
points recommended in the IPWEA best Practice Plant & Vehicle Management Manual. The current
. ie the difference between the Year 1 funding requirement of $
and the average annual funding requirement of $2,841,130. This gap can be easily managed.
Ten Year Plant & Vehicle Replacement Summary Funding Requirement
Year Net Replacement
Cost (Uniqco)
1 2015/16 $4,902,825
2 2016/17 $2,396,234
3 2017/18 $2,586,127
4 2018/19 $2,255,127
5 2019/20 $3,517,262
6 2020/21 $1,819,021
7 2021/22 $1,955,833
8 2022/23 $1,867,317
9 2023/24 $3,694,951
10 2024/25 $3,416,559
Year Plant & Vehicle Replacement Funding Chart
Our recommended strategies to deal with the funding gap are:
Subject to a risk assessment deferring low utilisation items including the graders.
Leasing heavy plant and vehicles with predictable utilisation such as the graders rather than
deferring their replacement.
MANAGEMENT 96
Ten Year Plant & Vehicle Replacement Plan (Refer separate XL sheet)
for the plant and heavy fleet, indicates an
is required based on the optimum changeover
points recommended in the IPWEA best Practice Plant & Vehicle Management Manual. The current
. ie the difference between the Year 1 funding requirement of $4,902,825
. This gap can be easily managed.
Ten Year Plant & Vehicle Replacement Summary Funding Requirement
Subject to a risk assessment deferring low utilisation items including the graders.
such as the graders rather than
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 96 of 131
As mentioned in Section 1, light vehicles should not be considered for leasing as these are high risk in
terms of penalties for over or utilisation or overpayment for
RECOMMENDATION
Ten Year Plant & Heavy Vehicle Replacement Plan
52. The 10 year plant and heavy vehicle replacement
budget based on optimum replacement principles of
age and utilisation be adopted.
53. Rather than defer replacement, the Council lease
major items of the heavy fleet with predictable
utilisation such as graders, loaders, backhoes and
selected trucks if there is a shortage of capital.
4.7. Funding the Plant & Vehicle Fleet
Traditionally local government either funds plant replacement through annual capital budget
allocations or from a plant replacement reserve. In the case of the latter, having adequate funds
available when required is dependent on internal hire rates that deliver full cost recovery. If internal
charge rates don’t relate to capital replacement needs, the plant reserv
replacement will fall short.
While the Council does have a replacement reserve the internal charge rates won’t cover capital
replacement needs unless internal hire rates are based on full cost recovery which in turn needs to be
based on whole of life costs and expected annual utilisation. We have calculated internal hire rates on
this basis. Refer XL sheet Hire Rate Heavy Plant Tab.
The sample calculation provided for a tractor in Appendix 7 details our recommended methodology for
calculating hire rates. Note the depreciation is allocated partly to fixed depreciation and partly to
operational depreciation.
Operating Lease Option
Leasing is an option available to reduce the capital required to fund the plant replacement program.
Lease payments are funded through operations as a direct cost to departments.
There are two types of operating lease available to fund plant and these are a fully maintained
Operating Lease or one without maintenance. Operational leases are similar to a f
the exception that the risk of loss on sale is born by the finance lease company and no capital is
reported for Council’s assets. A fully maintained operating lease includes all servicing in the cost of
the lease payments. The finance co
and the buyer therefore pays for the risk.
The choice of whether to take a fully maintained operating lease or a non maintenance lease will
depend on the ability of the maintenance service
to the manufacturer’s requirements.
All leases are tied to a period of ownership and budgeted utilisation for the vehicle. Unless the vehicle
obtains the target utilisation within the period of owner
unused utilisation. Conversely the Council stands to attract additional costs if the budget utilisation is
exceeded.
At the end of the lease term the lessee will have four alternatives:
Review of Light Fleet & Heavy Plant
MANAGEMENT
As mentioned in Section 1, light vehicles should not be considered for leasing as these are high risk in
terms of penalties for over or utilisation or overpayment for underutilisation.
Ten Year Plant & Heavy Vehicle Replacement Plan Impact to
Organisation The 10 year plant and heavy vehicle replacement
budget based on optimum replacement principles of
age and utilisation be adopted.
Rather than defer replacement, the Council lease
major items of the heavy fleet with predictable
utilisation such as graders, loaders, backhoes and
selected trucks if there is a shortage of capital.
Funding the Plant & Vehicle Fleet
Traditionally local government either funds plant replacement through annual capital budget
a plant replacement reserve. In the case of the latter, having adequate funds
available when required is dependent on internal hire rates that deliver full cost recovery. If internal
charge rates don’t relate to capital replacement needs, the plant reserve method of funding plant
While the Council does have a replacement reserve the internal charge rates won’t cover capital
replacement needs unless internal hire rates are based on full cost recovery which in turn needs to be
sed on whole of life costs and expected annual utilisation. We have calculated internal hire rates on
this basis. Refer XL sheet Hire Rate Heavy Plant Tab.
The sample calculation provided for a tractor in Appendix 7 details our recommended methodology for
calculating hire rates. Note the depreciation is allocated partly to fixed depreciation and partly to
Leasing is an option available to reduce the capital required to fund the plant replacement program.
Lease payments are funded through operations as a direct cost to departments.
There are two types of operating lease available to fund plant and these are a fully maintained
Operating Lease or one without maintenance. Operational leases are similar to a f
the exception that the risk of loss on sale is born by the finance lease company and no capital is
reported for Council’s assets. A fully maintained operating lease includes all servicing in the cost of
the lease payments. The finance company or supplier takes the risk on the residual value of the item
and the buyer therefore pays for the risk.
The choice of whether to take a fully maintained operating lease or a non maintenance lease will
depend on the ability of the maintenance service provider (internal or external) maintaining the vehicle
to the manufacturer’s requirements.
All leases are tied to a period of ownership and budgeted utilisation for the vehicle. Unless the vehicle
obtains the target utilisation within the period of ownership, the Council suffers a lost opportunity with
unused utilisation. Conversely the Council stands to attract additional costs if the budget utilisation is
At the end of the lease term the lessee will have four alternatives:
MANAGEMENT 97
As mentioned in Section 1, light vehicles should not be considered for leasing as these are high risk in
Ease of Implementation
Traditionally local government either funds plant replacement through annual capital budget
a plant replacement reserve. In the case of the latter, having adequate funds
available when required is dependent on internal hire rates that deliver full cost recovery. If internal
e method of funding plant
While the Council does have a replacement reserve the internal charge rates won’t cover capital
replacement needs unless internal hire rates are based on full cost recovery which in turn needs to be
sed on whole of life costs and expected annual utilisation. We have calculated internal hire rates on
The sample calculation provided for a tractor in Appendix 7 details our recommended methodology for
calculating hire rates. Note the depreciation is allocated partly to fixed depreciation and partly to
Leasing is an option available to reduce the capital required to fund the plant replacement program.
There are two types of operating lease available to fund plant and these are a fully maintained
Operating Lease or one without maintenance. Operational leases are similar to a finance lease with
the exception that the risk of loss on sale is born by the finance lease company and no capital is
reported for Council’s assets. A fully maintained operating lease includes all servicing in the cost of
mpany or supplier takes the risk on the residual value of the item
The choice of whether to take a fully maintained operating lease or a non maintenance lease will
provider (internal or external) maintaining the vehicle
All leases are tied to a period of ownership and budgeted utilisation for the vehicle. Unless the vehicle
ship, the Council suffers a lost opportunity with
unused utilisation. Conversely the Council stands to attract additional costs if the budget utilisation is
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 97 of 131
• Upgrade or replace with a new item of plant/vehicle
• Extend the rental period
• Return the plant/vehicle with no further payments required (conditions apply)
• Purchase the plant/vehicle at a market price
A fully maintained operating lease can provide a competitive alternative to
utilisation of the item is predictable. If utilisation is not predictable there is potential for cost penalties
where utilisation exceeds the agreement or in the case of underutilisation, unnecessary overpayment.
We recommend that leasing be restricted to high capital cost and known utilisation items such as
graders, loaders and heavy trucks. The recommended practice when calling tenders for leasing items
of heavy plant/vehicles is to require tenderers to include the purchase price
comparison of lease versus buy.
As previously mentioned fully maintained operating lease for light vehicles is not recommended
because of the potential for changing roles of the vehicle users and the risk of penalties for exceedin
the agreed maximum mileage and strict monitoring is required.
4.8. Management Risk Issues
National Model OH&S Laws
The Commonwealth and each state and territory government in Australia have agreed to harmonise
their work health and safety laws, including Regu
similar in each jurisdiction.
The model Work Health and Safety (WHS) laws involve a new set of Acts, Regulations and Codes of
Practice which bring with them new occupational health and safety principles, obl
procedures across Australia. The authority responsible for the model laws is Safe Work Australia refer
http://www.safeworkaustralia.gov.au
The model laws include the following key elements imp
plant, vehicles and equipment:
• a primary duty of care requiring persons conducting a business or undertaking (PCBUs) to, so
far as is reasonably practicable, ensure the health and safety of workers and others who
be affected by the carrying out of work
• duties of care for persons who influence the way work is carried out, as well as the integrity of
products used for work
• a requirement that ‘officers’ exercise ‘due diligence’ to ensure compliance
• reporting requirements for ‘notifiable incidents’ such as the serious illness, injury or death of
persons and dangerous incidents arising out of the conduct of a business or undertaking
• a framework to establish a general scheme for authorisations such as licences, permit
registrations (e.g. users of certain plant)
The Key Changes
Some of the key changes that will flow from the model laws include:
Review of Light Fleet & Heavy Plant
MANAGEMENT
ith a new item of plant/vehicle
Extend the rental period
Return the plant/vehicle with no further payments required (conditions apply)
Purchase the plant/vehicle at a market price
A fully maintained operating lease can provide a competitive alternative to ownership provided the
utilisation of the item is predictable. If utilisation is not predictable there is potential for cost penalties
where utilisation exceeds the agreement or in the case of underutilisation, unnecessary overpayment.
leasing be restricted to high capital cost and known utilisation items such as
graders, loaders and heavy trucks. The recommended practice when calling tenders for leasing items
of heavy plant/vehicles is to require tenderers to include the purchase price for the item to enable a
comparison of lease versus buy.
As previously mentioned fully maintained operating lease for light vehicles is not recommended
because of the potential for changing roles of the vehicle users and the risk of penalties for exceedin
the agreed maximum mileage and strict monitoring is required.
Management Risk Issues
National Model OH&S Laws
The Commonwealth and each state and territory government in Australia have agreed to harmonise
their work health and safety laws, including Regulations and Codes of Practice, so that they are
The model Work Health and Safety (WHS) laws involve a new set of Acts, Regulations and Codes of
Practice which bring with them new occupational health and safety principles, obligations and
procedures across Australia. The authority responsible for the model laws is Safe Work Australia refer
http://www.safeworkaustralia.gov.au.
The model laws include the following key elements impacting on the maintenance and operation of
a primary duty of care requiring persons conducting a business or undertaking (PCBUs) to, so
far as is reasonably practicable, ensure the health and safety of workers and others who
be affected by the carrying out of work
duties of care for persons who influence the way work is carried out, as well as the integrity of
a requirement that ‘officers’ exercise ‘due diligence’ to ensure compliance
rements for ‘notifiable incidents’ such as the serious illness, injury or death of
persons and dangerous incidents arising out of the conduct of a business or undertaking
a framework to establish a general scheme for authorisations such as licences, permit
registrations (e.g. users of certain plant)
Some of the key changes that will flow from the model laws include:
MANAGEMENT 98
Return the plant/vehicle with no further payments required (conditions apply)
ownership provided the
utilisation of the item is predictable. If utilisation is not predictable there is potential for cost penalties
where utilisation exceeds the agreement or in the case of underutilisation, unnecessary overpayment.
leasing be restricted to high capital cost and known utilisation items such as
graders, loaders and heavy trucks. The recommended practice when calling tenders for leasing items
for the item to enable a
As previously mentioned fully maintained operating lease for light vehicles is not recommended
because of the potential for changing roles of the vehicle users and the risk of penalties for exceeding
The Commonwealth and each state and territory government in Australia have agreed to harmonise
lations and Codes of Practice, so that they are
The model Work Health and Safety (WHS) laws involve a new set of Acts, Regulations and Codes of
igations and
procedures across Australia. The authority responsible for the model laws is Safe Work Australia refer
acting on the maintenance and operation of
a primary duty of care requiring persons conducting a business or undertaking (PCBUs) to, so
far as is reasonably practicable, ensure the health and safety of workers and others who may
duties of care for persons who influence the way work is carried out, as well as the integrity of
rements for ‘notifiable incidents’ such as the serious illness, injury or death of
persons and dangerous incidents arising out of the conduct of a business or undertaking
a framework to establish a general scheme for authorisations such as licences, permits and
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 98 of 131
• positive duties of due diligence being placed on officers and senior managers;
• the primary duty for safety shifting to a
of an “employer”. This imposes the duty to take all reasonably practicable steps for safety on
a broader group of people in recognition of the changed nature of business and contractual
arrangements;
• a significant increase in maximum penalties.
All levels of management and staff need to be aware that they have a part to play in occupational
health & safety in the organisation and that failure to exercise due diligence will expose them to
severe penalties in the event of injury.
Chain of Responsibility
Responsible Executive Management including CEOs assume a direct liability risk for fleet through the
Chain of Responsibility provisions under the
Health and Safety Act (2011).
An independent taskforce extended the Chain of Responsibility provisions to include heavy vehicle
standards and vehicle restraints in June 2014.
The chains of responsibility that management must be familiar with are:
Figure 7 - On-Road Chain of Responsibility
Review of Light Fleet & Heavy Plant
MANAGEMENT
positive duties of due diligence being placed on officers and senior managers;
the primary duty for safety shifting to a “person conducting a business or undertaking” instead
of an “employer”. This imposes the duty to take all reasonably practicable steps for safety on
a broader group of people in recognition of the changed nature of business and contractual
significant increase in maximum penalties.
All levels of management and staff need to be aware that they have a part to play in occupational
health & safety in the organisation and that failure to exercise due diligence will expose them to
in the event of injury.
Responsible Executive Management including CEOs assume a direct liability risk for fleet through the
Chain of Responsibility provisions under the Heavy Vehicle National Law (HVNL) and the
An independent taskforce extended the Chain of Responsibility provisions to include heavy vehicle
standards and vehicle restraints in June 2014.
The chains of responsibility that management must be familiar with are:
n of Responsibility
MANAGEMENT 99
positive duties of due diligence being placed on officers and senior managers;
“person conducting a business or undertaking” instead
of an “employer”. This imposes the duty to take all reasonably practicable steps for safety on
a broader group of people in recognition of the changed nature of business and contractual
All levels of management and staff need to be aware that they have a part to play in occupational
health & safety in the organisation and that failure to exercise due diligence will expose them to
Responsible Executive Management including CEOs assume a direct liability risk for fleet through the
(HVNL) and the Work
An independent taskforce extended the Chain of Responsibility provisions to include heavy vehicle
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 99 of 131
Figure 8 – Maintenance Chain of Responsibility
Under the legislation, even the CEO could be prosecuted if Council’s fleet is found to be unsafe on
the roads. The CEO is directly liable because the council owns the asset and under the law the CEO
could be prosecuted. As mentioned in Section 4.8.1 CEO’s
standards under the Work Health & Safety Act
If a fleet department, for example, fails to work to the manufacturer’s recommended service intervals
for a specific piece of machinery or neglects to hold record
equipment to these standards then
and injures someone, it will be the CEO that is held ultimately liable.
The danger is that executive management a
care of by the fleet department.
It is essential that Fleet should operate within a strong governance framework established by
Executive Management with service delivery targets to meet within Governanc
reporting to Executive Management is essential as well as the reports recommended to manage the
fleet.
An example of the level of reporting that Uniqco is able to provide executive management monthly is
attached in Appendix 9.
RECOMMENDATION
Management Risk Issues
54. Council notes the increasing organisation
responsibilities as a result of the Heavy Vehicle
National Law (HVNL) and the Work Health and Safety
Act (2011).
Review of Light Fleet & Heavy Plant
MANAGEMENT
Maintenance Chain of Responsibility
Under the legislation, even the CEO could be prosecuted if Council’s fleet is found to be unsafe on
the roads. The CEO is directly liable because the council owns the asset and under the law the CEO
could be prosecuted. As mentioned in Section 4.8.1 CEO’s must ensure their fleet departments meet
Work Health & Safety Act (2011).
If a fleet department, for example, fails to work to the manufacturer’s recommended service intervals
for a specific piece of machinery or neglects to hold records that evidence they have maintained the
standards then something falls off that vehicle, or the vehicle fails in some way
and injures someone, it will be the CEO that is held ultimately liable.
The danger is that executive management and the CEO all assume that everything is being taken
It is essential that Fleet should operate within a strong governance framework established by
Executive Management with service delivery targets to meet within Governance. Regular high level
reporting to Executive Management is essential as well as the reports recommended to manage the
An example of the level of reporting that Uniqco is able to provide executive management monthly is
Impact to Organisation
Council notes the increasing organisation
responsibilities as a result of the Heavy Vehicle
National Law (HVNL) and the Work Health and Safety
Negative Impact
MANAGEMENT 100
Under the legislation, even the CEO could be prosecuted if Council’s fleet is found to be unsafe on
the roads. The CEO is directly liable because the council owns the asset and under the law the CEO
must ensure their fleet departments meet
If a fleet department, for example, fails to work to the manufacturer’s recommended service intervals
s that evidence they have maintained the
something falls off that vehicle, or the vehicle fails in some way
nd the CEO all assume that everything is being taken
It is essential that Fleet should operate within a strong governance framework established by
e. Regular high level
reporting to Executive Management is essential as well as the reports recommended to manage the
An example of the level of reporting that Uniqco is able to provide executive management monthly is
Ease of Implementation
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 100 of 131
4.9. Fleet Management
Currently light fleet falls under the responsibility of Corporate and plant and heavy fleet and the
mechanical workshop under Works & Civil.
From our observations there is close liaison between the Fleet Coordinator and the Supply & Light
Fleet Coordinator and we consider they are both highly competent operators.
In our experience it is most important that fleet department is autonomous of and not be
operations. Operations will always be the highest priority for fleet as the efficiency of coun
relies on availability of the fleet in delivery of works and services.
Where fleet resides in the organisation structure is not as critical as the knowledge of the Executive
on fleet KPI’s. Plant and fleet should operate within a strong gover
the Executive with service delivery targets within a Governance framework.
From an efficient use of resources and governance perspective there would be advantages in
combining the two separate areas under the one umbrella.
management capability.
Our assessment of priority areas for training and knowledge transfer are:
• Strategic plant and fleet mentoring for senior management and key fleet staff
• Understanding governance issues and the key
best practice
• Full documentation of the procurement process including assessment
• Understanding the importance of utilisation in managing the fleet
• Conducting a business case assessment
• Calculating whole of life
• Conducting an operating risk analysis prior to plant replacement deferral
• Preparing Service Level Agreements
We recommend Fleet and Procurement staff undertake the IPWEA Fleet Management Certificate
Course. For more detail visit www.ipwea.org/fleet
Management staff. Alternatively IPWEA offers the same professional development online over 6 by 1
hour sessions without the Certificate assessm
February 2016.
Review of Light Fleet & Heavy Plant
MANAGEMENT
Fleet Management – Structure, Staff Skills and Knowledge Transfer
Currently light fleet falls under the responsibility of Corporate and plant and heavy fleet and the
mechanical workshop under Works & Civil.
From our observations there is close liaison between the Fleet Coordinator and the Supply & Light
r and we consider they are both highly competent operators.
In our experience it is most important that fleet department is autonomous of and not be
operations. Operations will always be the highest priority for fleet as the efficiency of coun
relies on availability of the fleet in delivery of works and services.
Where fleet resides in the organisation structure is not as critical as the knowledge of the Executive
on fleet KPI’s. Plant and fleet should operate within a strong governance framework established by
the Executive with service delivery targets within a Governance framework.
From an efficient use of resources and governance perspective there would be advantages in
combining the two separate areas under the one umbrella. It would also provide improved fleet
Our assessment of priority areas for training and knowledge transfer are:
Strategic plant and fleet mentoring for senior management and key fleet staff
Understanding governance issues and the key performance indicators for fleet management
Full documentation of the procurement process including assessment
Understanding the importance of utilisation in managing the fleet
Conducting a business case assessment
Calculating whole of life costs and internal hire rates
Conducting an operating risk analysis prior to plant replacement deferral
Preparing Service Level Agreements
We recommend Fleet and Procurement staff undertake the IPWEA Fleet Management Certificate
www.ipwea.org/fleet. The course has also been completed by Executive
Management staff. Alternatively IPWEA offers the same professional development online over 6 by 1
hour sessions without the Certificate assessments. The next online training is expected to be held in
MANAGEMENT 101
Structure, Staff Skills and Knowledge Transfer
Currently light fleet falls under the responsibility of Corporate and plant and heavy fleet and the
From our observations there is close liaison between the Fleet Coordinator and the Supply & Light
In our experience it is most important that fleet department is autonomous of and not be embedded in
operations. Operations will always be the highest priority for fleet as the efficiency of council services
Where fleet resides in the organisation structure is not as critical as the knowledge of the Executive
nance framework established by
From an efficient use of resources and governance perspective there would be advantages in
It would also provide improved fleet
Strategic plant and fleet mentoring for senior management and key fleet staff
performance indicators for fleet management
We recommend Fleet and Procurement staff undertake the IPWEA Fleet Management Certificate
. The course has also been completed by Executive
Management staff. Alternatively IPWEA offers the same professional development online over 6 by 1
is expected to be held in
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 101 of 131
RECOMMENDATION
Fleet Management – Structure, Staff Skills and
Knowledge Transfer
55. Fleet management team needs to be autonomous and
able to report through a management structure directly
to the Executive Management Team
56. Consideration is given to staff training and skills
transfer needs identified in Section 4.10 of the report in
order to implement the recommendations of th
management review.
4.10. Performance Assessment Criteria
Our recommended performance assessment criteria are detailed in
many similar reviews and based on our experience the performance targets will provide the
framework for best practice fleet management.
RECOMMENDATION
Performance Assessment Criteria
57. Plant and heavy vehicle management assessment
criteria detailed in Table 24
considered as providing a framework for further
development during implementation of the Fleet
Management Review.
4.11. Identification of next steps to “action” the recommendations
We offer a service through Uniqco Operations to action the recommendations of the review and
Council through the improvement process. This will unlock the benefits of the review and provide the
critical management reporting needed to action the most critical recommendations. We have been
doing this successfully with clients over many years.
Although voluminous, the majority of the recommendations made in this report will have significant
impact on the organisation and should be relatively straightforward to implement at an operational
level.
The risk to the organisation will be in the develop
provided at the operational level and the o
implementation of these recommend
In order to implement a sustainable change within Clarence Vall
• The creation of a steering group to champion the change and provide regular updates to
the Executive Management Team and provide governance over the implementation.
• Sequencing and prioritisation of the recommendations detailed in
implementation plan.
• Establishment of a reporting framework for both the operational (plant and fleet)
performance / compliance and the realisation of the benefits achieved from implementing
these recommendations.
• Close liaison with fin
outcomes.
Review of Light Fleet & Heavy Plant
MANAG
Structure, Staff Skills and Impact to Organisation
Fleet management team needs to be autonomous and
to report through a management structure directly
to the Executive Management Team
Consideration is given to staff training and skills
transfer needs identified in Section 4.10 of the report in
order to implement the recommendations of the fleet
Performance Assessment Criteria
Our recommended performance assessment criteria are detailed in Table 24. Uniqco has undertaken
many similar reviews and based on our experience the performance targets will provide the
framework for best practice fleet management.
Performance Assessment Criteria Impact to Organisation
Plant and heavy vehicle management assessment
4 of the report are
considered as providing a framework for further
development during implementation of the Fleet
Identification of next steps to “action” the recommendations
We offer a service through Uniqco Operations to action the recommendations of the review and
Council through the improvement process. This will unlock the benefits of the review and provide the
critical management reporting needed to action the most critical recommendations. We have been
doing this successfully with clients over many years.
, the majority of the recommendations made in this report will have significant
impact on the organisation and should be relatively straightforward to implement at an operational
The risk to the organisation will be in the developing an aligned executive that recognise
provided at the operational level and the opportunity available to Clarence Valley in the
implementation of these recommendations.
In order to implement a sustainable change within Clarence Valley, we strongly advise:
The creation of a steering group to champion the change and provide regular updates to
the Executive Management Team and provide governance over the implementation.
Sequencing and prioritisation of the recommendations detailed in this report into an
implementation plan.
Establishment of a reporting framework for both the operational (plant and fleet)
performance / compliance and the realisation of the benefits achieved from implementing
these recommendations.
Close liaison with finance to ensure accurate data provision and measurement of financial
MANAGEMENT 102
Ease of Implementation
. Uniqco has undertaken
many similar reviews and based on our experience the performance targets will provide the
Ease of Implementation
Identification of next steps to “action” the recommendations
We offer a service through Uniqco Operations to action the recommendations of the review and guide
Council through the improvement process. This will unlock the benefits of the review and provide the
critical management reporting needed to action the most critical recommendations. We have been
, the majority of the recommendations made in this report will have significant
impact on the organisation and should be relatively straightforward to implement at an operational
ing an aligned executive that recognises the value
pportunity available to Clarence Valley in the successful
ey, we strongly advise:
The creation of a steering group to champion the change and provide regular updates to
the Executive Management Team and provide governance over the implementation.
this report into an
Establishment of a reporting framework for both the operational (plant and fleet)
performance / compliance and the realisation of the benefits achieved from implementing
ance to ensure accurate data provision and measurement of financial
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 102 of 131
RECOMMENDATION
Identification of next steps to “action” the
recommendations;
58. Establish a Steering Group to govern the
implementation of these recommendations
59. Prioritise the recommendation aligned to Clarence
Valley corporate objectives
60. Establish a reporting framework to measure operations
and benefits related to the recommendations
61. Establish close ties with Finance
Table 24 – Plant & Vehicle Management Assessment Criteria
Report Item Explanation
Utilisation
Provide data on actual utilisation versus projected utilisation
Performance Measures
Utilisation to exceed benchmark for ownership
Maintain optimum
Projected timesheet Vs actual use reporting
Fuel Consumption
In litres per 100km’ or litres/engine hrs but also ‘over a given period per plant item and/or per department
Identify exceptions and investigate
Maintenance Failure Records
Type of failure and reason for the failures by driver and/or owner
Performance Measures
Target unscheduled maintenance and repair hours to be less than scheduled maintenance hours
Target scheduled maintenance hours within industry flat rates for
Monthly reporting on maintenance associated with accidents and incidents highlighting downtime, and cost associated with this failure record
Downtime
Measure the time associated with an item of the fleet being out of action for repairs maintenance other than the time spent working on the item. This is not a current priority but should be introduced in the longer term.
Identify total downtime
Maintenance Standards
Details of maintenance standards to be met.
Performance Measures
Meet preventative maintenance strategies as detailed
Scheduled maintenance to be complete within 14 days of being due
Service Level Agreements
Develop Service Level Agreements between fleet management and:
• The end users of fleet and
• Maintenance service providers (internal and external)
Performance Measures
Refer Levels of Service
10 Year Replacement program
Based on km or engine hours or/years
Performance Measures
Using whole of life costing and setting
Building a reserve fund sufficient to meet annual replacement requirements
Income & Budget Vs Actual
Providing a detailed analysis of budget expenditure, verses actual and allowing for adjustments to
Monthly review and exception report
Projected lost opportunity costs through lack of utilisation
Review of Light Fleet & Heavy Plant
MANAGEMENT
Identification of next steps to “action” the Impact to Organisation
Establish a Steering Group to govern the
implementation of these recommendations.
se the recommendation aligned to Clarence
Valley corporate objectives.
Establish a reporting framework to measure operations
and benefits related to the recommendations
Establish close ties with Finance.
Plant & Vehicle Management Assessment Criteria
Explanation
Provide data on actual utilisation versus projected utilisation
Performance Measures
Utilisation to exceed benchmark for ownership
Maintain optimum replacement changeover
Projected timesheet Vs actual use reporting
In litres per 100km’ or litres/engine hrs but also ‘over a given period per plant item and/or per department
Identify exceptions and investigate
Type of failure and reason for the failures by driver and/or owner
Performance Measures
Target unscheduled maintenance and repair hours to be less than scheduled maintenance hours
Target scheduled maintenance hours within industry flat rates for
Monthly reporting on maintenance associated with accidents and incidents highlighting downtime, and cost associated with this failure record
Measure the time associated with an item of the fleet being out of action for repairs maintenance other than the time spent working on the item. This is not a current priority but should be introduced in the longer term.
Identify total downtime and the impact on cost
Details of maintenance standards to be met.
Performance Measures
Meet preventative maintenance strategies as detailed in Table 19
Scheduled maintenance to be complete within 14 days of being due
Develop Service Level Agreements between fleet management and:
The end users of fleet and
Maintenance service providers (internal and external)
Performance Measures
Refer Levels of Service
Based on km or engine hours or/years
Performance Measures
Using whole of life costing and setting internal hire rates to reflect full cost recovery
Building a reserve fund sufficient to meet annual replacement requirements
Providing a detailed analysis of budget expenditure, verses actual and allowing for adjustments to internal hire rates to eliminate overrun and under
Monthly review and exception report
Projected lost opportunity costs through lack of utilisation
MANAGEMENT 103
Ease of Implementation
In litres per 100km’ or litres/engine hrs but also ‘over a given period per plant item
Type of failure and reason for the failures by driver and/or owner
Target unscheduled maintenance and repair hours to be less than scheduled
Target scheduled maintenance hours within industry flat rates for scheduled services
Monthly reporting on maintenance associated with accidents and incidents highlighting downtime, and cost associated with this failure record
Measure the time associated with an item of the fleet being out of action for repairs or maintenance other than the time spent working on the item. This is not a current
in Table 19
Scheduled maintenance to be complete within 14 days of being due
Develop Service Level Agreements between fleet management and:
internal hire rates to reflect full cost recovery
Building a reserve fund sufficient to meet annual replacement requirements
Providing a detailed analysis of budget expenditure, verses actual and allowing for internal hire rates to eliminate overrun and under-recovery
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 103 of 131
4.12. Estimated savings by
The estimated savings are summarised in
It needs to be acknowledged that the estimated savings
considered to rely upon the successful implementation of the recommendations in aggregate.
Table 25 – Estimated Savings by
No. Task
4 Change optimum replacement of light vehicles to 150,000km or 5 years
15 Implement higher private use contributions
20 to 24
Extending the life of low utilised plant by undertaking risk assessments and extending life where possible
45 Improved efficiency on reporting
46
Improved productivity through the efficient analysis of actual utilisation Vs timesheet hours Reduced time in staff recording timesheet hours for job cost recovery being replaced by fixed monthly hire journals for all assets used on repetitive tasks small plant, parks and gardens
46
Savings by automated reporting of FBT (as a result of capturing accurate mileage and ownership) Savings created by automating the capture of fuel tax credits
Review of Light Fleet & Heavy Plant
MANAGEMENT
avings by adopting the recommendations
estimated savings are summarised in Table 25.
be acknowledged that the estimated savings are not necessarily separable and are
considered to rely upon the successful implementation of the recommendations in aggregate.
Estimated Savings by adopting the Report Recommendations in aggregate
Timeframe to realise
Estimated Savings
Change optimum replacement of light vehicles to 150,000km 3 months
Estimated $190,000 per year with an immediate reduction of $450,000 capital expenditure in this financial year
Implement higher private use
5 years as this will need to be implemented
and negotiated in new
contracts
$60,000 per year
undertaking
extending life where possible
3 months Estimated $50,000 in capital expenditure per year
6 months
This should save the total time of 1 FTE. We don't claim this will reduce a current FTE position. Rather it will make the administration of fleet less onerous negating the need for an additional FTE. Saving $100,000 on future total costs of employment
Improved productivity through the efficient analysis of actual utilisation Vs timesheet hours
recording timesheet hours for
replaced by fixed monthly hire journals for all assets used on
ive tasks small plant,
12 months
Estimate time saving 100 hours (cumulative) a week for operators to record and collate timesheet hours = 5200 hours a year a year @ $35.00 an hour with overhead = $182,000.
reporting of FBT (as a result of capturing accurate mileage
automating the capture of fuel
12 months
Estimate time saving 20 hours a month to capture and collate data = 240 hours a year @ $35.00 an hour with overhead = $8,400
MANAGEMENT 104
are not necessarily separable and are
considered to rely upon the successful implementation of the recommendations in aggregate.
in aggregate
Notes
immediate reduction of High confidence of data
High confidence in data
capital expenditure per
Low confidence data provided to verify. Potential for greater saving.
total time of 1 FTE. We
less onerous negating
additional FTE. Saving
Efficiency saving to the Council
100 hours (cumulative) a week for operators to
year @ $35.00 an hour
Efficiency saving to the Council
ar @ $35.00 an hour with overhead = $8,400
Efficiency saving to the Council
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 104 of 131
53
Reduced WHS, On Road Chain of Responsibility and Maintenance risk. Maintaining an accurate compliant list of all vehicles scheduled maintenance. Meeting Governance and compliance requirements to ensure there are no breaches of the on road chain of responsibility and the maintenance procedures required by law.
Total annual savings estimated
Less annual cost to implement
*Estimated cost to deploy management on best practice fleet management.
Net savings
Review of Light Fleet & Heavy Plant
MANAGEMENT
Reduced WHS, On Road Chain of Responsibility and
compliant list of all vehicles
Meeting Governance and compliance requirements to ensure there are no breaches
maintenance procedures
12 months
While this cannot be quantified it is probably Councils biggest financial risk with significant fines for an organisation that has a major breach
12 months
Confident of $500,000 with a stretch target of $700,000 per annum
nnual cost to implement 12 months *$100,000
cost to deploy Uniqco’s fleet reporting system, mentor staff and executive management on best practice fleet management. Separate proposal to be prepared
Net savings $400,000 with a stretch target of up to $600,000 per year plusreduced risk
MANAGEMENT 105
quantified it is probably
or an organisation that has a
Risk exposure reduced
By Uniqco
and executive to be prepared.
with a stretch target of up to plus significantly
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 105 of 131
APPENDIX 1 – VEHICLE COMPARISONS – BASED ON AVERAGE
ANNUAL WHOLE OF LIFE COSTS
Source: IPWEA Online Plant & Vehicle Management Tools - Light Fleet Selection Model (www.ipwea.org/fleet) Chart 1 –Vehicle Comparisons Large Cars - Average Annual 20,000km
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 106 of 131
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 107 of 131
Chart 2 –Vehicle Comparisons Small Cars - Average Annual 20,000km
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 108 of 131
APPENDIX 2 – LIGHT VEHICLE FLEET ANALYSIS - SURVEY
QUESTIONNAIRE TEMPLATE
PART 1 – VEHICLE DETAILS
This part relates to the vehicle allocated to you or for which you are responsible. Please check and amend the following information as appropriate. If the information shown is incorrect, please use the blank boxes below each entry to insert the correct information. Leave blank if correct.
Vehicle Make/Model/Type Licence Plate No.
Authorised Usage Main Driver/User or Main Business Task
PART 2 – MANAGEMENT ASSESSMENT
This part allows the Manager/Coordinator to provide an opinion on the suitability of this vehicle for the business activities performed by it. If this vehicle is not allocated solely for your use, please discuss your responses with the current user/s if necessary.
To what extent does this vehicle meet the business demands required of it? (Circle your choice).
0 1 2 3 4 |___________|_____________|______________|________________| Not at all Somewhat Fully
Using only the criteria of carrying requirements (for passengers, freight, equipment, tools, etc.) and terrain covered, what do you consider to be the most appropriate vehicle class to meet the MINIMUM requirements of the business task performed by this vehicle? (See attached Attachment A for vehicle class selection)
Class
_______
If your choice is not listed, please briefly describe the vehicle here:
_______________________________________________________________
Comments:
_______________________________________________________________
PART 3 – VEHICLE USAGE
This part relates to the usage of the vehicle and should be completed by the vehicle user/s. Two elements of usage are included, distance travelled and time in use, to take account of different usage patterns. (Kms Means Kilometres.)
The average weekly distance travelled has been previously recorded as: Kms.
Please enter an estimate of this vehicle’s AVERAGE WEEKLY travel distance into the relevant boxes below. The figures should relate to the average WEEKLY distance travelled when considered over a full year. Don’t worry about being too exact – your best estimate will suffice. Please ensure you make allowance for other users.
Commuting Use Business Use Private Use Total
_____Kms ______Kms ______Kms ______Kms
Please enter an estimate of this vehicle’s AVERAGE WEEKLY amount of time in use, including after hours use; e.g. 4 hours/day x 5 days = 20 hours
______Hrs
Current Odometer Reading: Date of Reading:
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 109 of 131
LIGHT VEHICLE FLEET ANALYSIS – SURVEY QUESTIONNAIRE
PART 4 – VEHICLE USAGE
This part relates to the usage of this vehicle and can be completed by the vehicle user/s. Please complete the information below where relevant.
Complete this question only if the vehicle is used on business activities on weekends: During the normal working year of 48 weeks, on how many weekend days would the vehicle be used to attend to business activities (e.g. call-outs, events, etc.) on a Saturday or Sunday? Tick one box only.
0-6 days 7-12 days 13-24 days 24-48 days 49-96 days
Complete this question only if the vehicle is a passenger vehicle (i.e. fitted with seating for 3 or more passengers, excluding the driver): During the normal working year of 48 weeks, on how many weekdays would the vehicle carry passengers for work purposes? Tick one box in each line only. 1 passenger
0-12 days (5%)
13-24 days (10%)
25-36 days (15%)
37-48 days (20%)
49-240 days (>20%)
2 passengers
0-12 days (5%)
13-24 days (10%)
25-36 days (15%)
37-48 days (20%)
49-240 days (>20%)
3 or more passengers
0-12 days (5%)
13-24 days (10%)
25-36 days (15%)
37-48 days (20%)
49-240 days (>20%)
Complete this question only if the vehicle is required to carry freight, equipment, tools, etc.: During the normal working year of 48 weeks, on how many weekdays would the vehicle carry freight, equipment, tools, etc. for work purposes? Tick one box only.
0-12 days (5%)
13-24 days (10%)
25-36 days (15%)
37-48 days (20%)
49-240 days (>20%)
Briefly describe the nature of the freight, equipment, tools, etc. carried (e.g. size, shape, weight, volume, etc.):
______________________________________________________________________________________________________________________________________________________________
Please describe any special issues associated with the freight, equipment, tools, etc. carried:
______________________________________________________________________________________________________________________________________________________________
Please describe any special accessibility requirements associated with the freight, equipment, tools, etc. carried:
______________________________________________________________________________________________________________________________________________________________
Is the security of the freight, equipment, tools, etc. that is carried an important consideration? If yes, please include a comment about the security requirements.
__________________________________________________________________________________________________________________________________________________________________
Complete this question only if the vehicle is a 4-wheel drive: What approximate percentage of the total travel distance demands engaging 4-wheel drive?
_____%
Data gathered from this survey will allow Uniqco International Vehicle Management to ascertain requirements for vehicle use and recommend appropriate specifications.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 110 of 131
Attachment A VEHICLE CLASSIFICATIONS
CLASS DESCRIPTION EXAMPLES
1 Elite Sedan Ford Territory, Toyota Prado, Holden Caprice, Aurion Presara
2 Executive Sedan VW Passat, Holden Commodore, Ford Falcon Toyota Camry Atara, Holden Colorado
3 Large Sedan (Standard) Holden Malibu, Falcon, Camry, Mitsubishi Outlander
4 Large Station Wagon Mitsubishi ASX, Ford Kuga, VW Tiguan, Toyota RAV
5 People Mover Hyundai I Load
6 4WD Station Wagon (Soft-roader)
Subaru Forester, RAV 4, Nissan X Trail
7 Medium Sedan (2L+) Hyundai I30 Mitsubishi, Toyota Corolla
8 Medium Wagon or Hatch (2L+)
Hyundai I30 Holden Cruz
9 Medium Sedan (Under 2L) Ford Focus, Toyota Corolla, Nissan Pulsar, Mitsubishi Lancer, VW Golf, Mazda 3,
10 Medium Hatch (Under 2L) Ford Focus, Toyota Corolla, Nissan Pulsar, Mitsubishi Lancer, VW Polo, Mazda 3,
11 Small Sedan Honda Jazz Toyota Echo, Mazda 2, Ford Fiesta, Hyundai I20
12 Van Hyundai ILoad Kia Grand Carnival
13 Utility Holden Rodeo, Ford Rangerr, Toyota Hi Lux, Nissan Navara, Mitsubishi Triton
14 Utility with extended cab Holden Rodeo, Ford Ranger, Toyota Hi Lux, Nissan Navara, Mitsubishi Triton
15 Utility with dual cab Holden Rodeo, Ford Ranger, Toyota Hi Lux, Nissan Navara, Mitsubishi Triton
16 4WD Utility Holden Rodeo, Ford Ranger, Toyota Hi Lux, Nissan Navara, Mitsubishi Triton
17 4WD Rugged Utility with dual cab
Holden Rodeo, Ford Ranger Toyota Hi Lux, Nissan Navara, Mitsubishi Triton
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 111 of 131
APPENDIX 3 – FBT SAMPLE CALCULATIONS
There are two methods available to determine the value of a motor vehicle benefit for FBT purposes:
• The statutory method; and • The operating cost method (log book).
The statutory formula method must be used unless an employer elects to use the operating cost method. A decision to use the operating cost method must be made no later than the day on which an FBT return is due to be lodged with the ATO or, by 21 May if a return is not required to be lodged. Employers are free to choose whichever method yields the lowest taxable value. There is no need to notify the ATO of the method chosen as business records are sufficient evidence of this. A reportable benefit must be included on the employee’s group certificate for the notional value of that benefit. This is calculated by taking the driver’s share of FBT and grossing up to the pre-tax position. The reportable benefit will not be included in staff’s assessable (or taxable) income. However the reportable benefit is taken into account by the Australian Taxation Office (ATO) for various income tests. Eg. Superannuation and termination surcharges, HECS, child support etc. For Fringe Benefit Tax reasons, a car is:
• a station wagon, sedan, panel van or ute (including four-wheel drive utes); • any other goods-carrying vehicle that has a capacity to carry 1 tonne or less; or • any other vehicle which is designed to carry less than nine passengers.
For a car to be defined as available for private use it can be:
• used in fact by the employee for private use; or • made available for private use by the employee, regardless of whether it is actually used
Exempt Vehicles Certain Vehicles – Providing the following vehicles are only used for home to work travel, business purposes and other minor, infrequent and irregular travel. The benefit received is exempt, MT 2024.
a) Motor Cycles b) Vehicles designed to carry a load of at least one tonne c) Taxis, panel vans, utilities and commercial vehicles designed to carry a load of less than 1
tonne but not principally designed to carry passengers. According to MT 2024 this includes Nissan Navara Dual Cab Ute DX, Mazda Bravo 4WD Dual Cab Ute DX5, Toyota Hilux 4x2 Dual Cab Ute, Ford Courier 4x2Crew Cab pick-up GL and Holden Ute Series III 179kw V8. Other vehicles that have more load space than passenger space may well qualify.
If the employee has a long way to travel to work consider providing a vehicle that fits into one of the classes Statutory Method The statutory formula method calculates the taxable value of the motor vehicle benefit as a percentage of the car's value, based on the number of days during the FBT year on which the car was available for private use. Percentage of car's value The percentage is called the ‘statutory fraction’. As of 1 April 2014 the percentage is a single statutory rate of 20% regardless of kilometres travelled.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 112 of 131
Availability for private use A car is considered by the Australian Taxation Office to be available for private use if it is garaged at or kept at or near an employee’s private residence and/or in their custody and control. Driving a car from home to work is considered private use for tax purposes. Situations in which a car is considered not to be available for private use are:
a. the car is off the road for any reason for more than three days e.g. extensive repairs are being carried out, as opposed to a routine service or maintenance;
b. the vehicle is not garaged overnight at the employees place of residence e.g. it is garaged at work and the keys to the vehicle are held by your office and there is a prohibition on the private use of the vehicle.
The lower the number of days available for private use, the lower the value for FBT purposes. This means a lower reportable benefit shown on an employee payment summary and less fringe benefits tax paid by the employer. Calculation Under the statutory formula method, the value of the benefit is calculated as follows: Cost of the Car X Statutory Percentage X Days Vehicle Available for Private Use / Days in the Year less Employee Contribution Employee Contribution is any after tax payment made towards the cost of the car that has not been reimbursed by the employer. Example:
Notional value of the vehicle: $28,500
Number of kilometres driven in the year: 14,980
Days available for private use: 365
Contributions made by employee: Nil
Value of the benefit and FBT payable by the employer
= Cost of the Car X Statutory Percentage X Days Vehicle Available for Private Use/Days in the Year less contribution
= 28,500 X 0.20 X 365/365 – Nil
= $5,700 (FBT payable by the employer)
Grossed up value of benefit to appear on the employee’s payment summary
= 5,700 X 1/(1 – 0.465)
= 5,700 X 1.8692
= 10,654
The FBT payable by the employer is $5,700 and the grossed up amount of $10,654 would appear on the employee's payment summary. Reducing the base value after four years For the purpose of FBT calculations an employer can reduce the base value of a car by one-third in the FBT year that starts after the car has been owned or leased for four years. That is, the reduction applies from 1 April after the fourth anniversary of the date on which the car was first owned or leased. The reduction applies only once for a particular car and the reduced base value is used for subsequent years. The reduction does not apply to non-business accessories added after the car is acquired. Example: Reducing the base value after four years An employer purchases a car for $30,000 (including GST) on 1 July 2013. The employer can reduce the base value of the car by one-third ($10,000) in the FBT year beginning 1 April 2018. Operating Cost Method (Log Book) This method calculates the taxable value as a percentage of the total costs of operating the car during the FBT year. The value for FBT purposes is the private use percentage. To determine the business and private use percentage, a logbook must be maintained. As a minimum the logbook is required to be maintained for a continuous period of 12 weeks for the first year the logbook method is used and then every five years. The period may overlap 2 tax years. Calculation
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 113 of 131
Under the Operating Cost (log book) method, the value of the benefit is calculated as follows: Total Operating Costs X Percentage of Private Use less Employee Contribution Example: A car is leased (operating lease) by the employer and provided to an employee. The following costs were incurred for the FBT year ended 31 March 2011:
Lease costs 9,500
Fuel 3,000
Repairs 850
Insurance 600
RAC membership 60
Total 14,010
A logbook has been maintained for a continuous period of 12 weeks with the following information:
Total kilometres travelled 15,436 100%
Business kilometres travelled 5,650 37%
Private kilometres travelled 9,786 63%
Employee contribution post tax during the FBT year Nil
Value of the benefit and FBT payable by the employer
= Total Operating Costs X Percentage of Private Use less Employee Contribution
= $14,010 X .63 – Nil
= $8,826.30
Grossed up value of benefit to appear on the employee’s payment summary
= $8,826.30 X 1 / (1 – 0.465)
= $8,826.30 X 1.8692
= $16,498
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 114 of 131
APPENDIX 4 - NEW PLANT/VEHICLE/EQUIPMENT PURCHASE –
BUSINESS CASE TEMPLATE
Source: IPWEA Plant & Vehicle Management Manual 3
rd Edition 2012
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 115 of 131
New Plant/Vehicle/Equipment Purchase – Business Case Template with Example DATE Item to be purchased: 6X4 Wheel Tipper
Item Description User Business Unit
Explain why the item is essential to the business operation
New Item Requirements of New Item
Provide details of specific requirements of the item required – these are the key items that would form the basis of a tender technical specification.
300 HP
10m3 tipper
Conventional cab arrangement
Air operated swinging tail gate
6 rod suspension
Tow hitch and hydraulics extended for trailer use
Air conditioning
Bull bar
Questionnaire
History
1 Does the proposed item have a history of external hire? If yes provide annual utilisation. NO
Engine Hours
Timesheet Hours
Kms
2 What is the expected annual utilisation if the item is owned.
Engine Hours
Timesheet Hours
900 Kms 18,500
3 Was the hire wet or dry? (Dry hire is without an operator)
Hourly/Daily Dry Hire Rate
Hourly/Daily Wet Hire Rate
4
If there is NO history of hire, is there a contractor available with the required skills to provide a quality service at a competitive price?
Hourly/Daily Dry Hire Rate
No dry hire available
Hourly/Daily Wet Hire Rate
$60/hr
5 If a contractor is available what replacement service will the operator offer if the unit supplied breaks down?
100% availability (ie backup available) This company has a small fleet of trucks. Different scenario for single owner/operator
6 Is there an in house plant operator sufficiently skilled?
Yes
7 Is the work seasonal? If yes over what period?
October-April
Operating Conditions
8 How will the unit be transported to site? Self drive
9 What terrain will the unit be working in? Undulating
Operating Requirements
10 What other items of plant or equipment will be required to support the item?
Nil
Servicing and Maintenance
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 116 of 131
11 Will the item be maintained in house or by an external operator?
In house
In House
12 If in house what staff resources are required for servicing and repairs?
No additional staff requirement
13 Are the in house resources sufficiently skilled?
Yes
Contractor
14 Is there a contractor available to undertake servicing and repairs?
Yes
15 What is the minimum hire a contractor would expect – on site, off site charges?
500 hrs for an annual supply contract for a 3 year term
16 What will it cost to manage the hire?
Advertise, prepare specs, assess tenders, certify invoices, admin costs Allow $2/hr@900hrs = $1800
17 What replacement service will the operator offer if the unit supplied breaks down?
Replacement truck within 4 hours
18 Will the contractor charge by flat rate or hour meter or a combination of both?
Timesheet hours
19 Who is responsible for mechanical failures?
Truck Owner
20 Who is responsible for wear items like blades and tips?
Truck Owner
Operating Costs
21 What is the estimated annual operating cost of the item?
Covered in ownership cost below
22 What is the estimated annual ownership costs?
$44,520
44,520/900 = $49.47/hr
Operator Costs
23 What is the estimated annual operator costs?
900hrsX $30/hr =$27,000
Internal Hire Rate
24 What is the estimated wet hire rate? $30+$49.47 = $79.47
Cost Comparison
25 Total Contractor Cost $60 plus $2 admin = $62/hr
26 Total Day Labour Cost $79.47
27 Annual Cost Difference 79.47-62 = 17.47 * 900 = $15,723 in favour of Hire over Ownership
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 117 of 131
APPENDIX 5 – OPTIMUM REPLACEMENT POINT CALCULATION –
ROAD GRADER
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 118 of 131
APPENDIX 6 – GUIDELINES FOR THE CALCULATION OF INTERNAL
HIRE RATES
To calculate the hire rate for each vehicle or item of plant the following methodology is recommended. Using the Institute of Public Works Engineering Plant & Vehicle Management Manual calculations are made as follows:- In the following example we have a 6x4 truck travelling 44,253km a year 1. Truck value exclusive of GST $196,779 2. Fuel consumption 38 litre/100 km 3. Fuel price $1.35c per litre 4. Annual average maintenance over 8 years $10,439 per annum (this is based on manufacturers recommended maintenance per KM ie 0.23589c per kilometer) 5. Tyres cost $620 each 6. Tyres need to be replaced every 45,000 km 7. Oil consumption 4 litre per 10,000 km 8. Oil price is $12.70c a litre 9. Resale value at 8 years is $70,000 10. Opportunity costs is 9.5% 11. Risk allowance 30% per annum of average maintenance 12. Registration costs $3,890 per annum Table 1 Fixed Costs
Fixed Costs
Item Calculation Amount
Fixed Depreciation = Cost of the vehicle ($196,779) x 5% $9,839
Opportunity costs = 9.5%
= Cost of the vehicle ($196,779) x 9.5% $18,694
Vehicle Registration From existing cost ($3,890) $3,890
Insurance = Cost of insurance ($57,200) / fleet value ($12,000,000) x Cost of the vehicle ($196,779)
$938
Administration = Cost of administration ($200,000) / Fleet Value ($12,000,000) x cost of the vehicle ($196,779)
$3,278
Total fixed Costs $36,639
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 119 of 131
Table 2 - Variable Costs
Variable Costs
Item Calculation Amount
Operational Depreciation
= Purchase price ($196,779) – Resale Value ($70,000) / Anticipated life (8 years) less the fixed depreciation ($9,839)
$6,008
Fuel = 38litre per 100km
= Annual mileage 44253 / 100 x 38 litre x $1.35 $22,702
Tyres = 10 tyres @ $620.00 each
= (10 tyres x $620 = $6,200) / 45,000,km tyre life x 44253 annual km
$6,097
Oil = 4litre per 100,00km
= (Annual mileage 44253 / 10,000) x Oil price $12.70 per litre x 4 litres
$225
Repairs and maintenance
From data sheet ($10,439) $10,439
Risk allowance 30% of maintenance $3,132
Total variable costs $48,603
Internal Charge out rate
Item Calculation Amount Per Hour
Annual hire rate = $48,603 + $36,693 $85,296
Check Total hire rate based on 1200hrs
= $85,296/1200 $71.08
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 120 of 131
APPENDIX 7 - WHOLE OF LIFE COST CALCULATIONS
Example Tractor Assume the fleet is made up as follows: 1. The all up value is $12,000,000 2. The fleet comprises of a number of vehicles from Graders and Trucks, to Lawn mowers and Cars. 3. Current administration costs are $520,000 4. Insurance bill for the complete fleet is $57,200 Whole of life costs Scenario You own a Tractor and from utilisation calculations the Tractor is currently operating 576 hours a year. From your records staff are charging out 1320 timesheet hours a year. 13. Tractor value exclusive of GST $83,000 14. Fuel consumption 9.5 lt per hour 15. Fuel price $1.25c per litre 16. Annual average maintenance over 8 years $3,900 per annum 17. Tyres cost $370 each for front and $1190 rear 18. Tyres need to be replaced every 1900hrs 19. Oil consumption 5 lt per 1000hrs 20. Oil price is $4.70c a litre 21. Fixed depreciation is 5% 22. Resale value at 7 years is $27,000 23. Opportunity costs is 6.5% 24. Risk allowance $1200 per annum 25. Registration $56 per annum Annual Fixed Costs
Depreciation 5% $4150
Opportunity costs 6.5% $5395
Vehicle Registration $56 Insurance $396 Administration $3596
Total fixed Costs $13593
Annual Variable Costs
Replacement reserve
Purchas price – resale value / life (- fixed depreciation) $3850
Fuel 9.5lt per hour $6840
Tyres 2 tyres @ $370.00 each 2 tyres @ $1190 each
$946
Oil 5 lt per 1000hrs $14
Repairs and maintenance $3900
Risk allowance $1200
Total variable costs $16750
Total Annual costs
Replacement reserve $8000
Fixed costs $9443
Variable costs $12900
Total annual costs $30343
Internal Charge out rate
Replacement reserve
1320hrs $6.06
Operational cost recovery
1320hrs $16.93
Total hire rate 1320hrs $23.00
Skid Steer Loader
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 121 of 131
Source: IPWEA Online Plant & Vehicle Management Tools – Whole of Life Cost Calculator (www.ipwea.org/fleet)
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 122 of 131
5.5 Tonne Excavator
Source: IPWEA Online Plant & Vehicle Management Tools – Whole of Life Cost Calculator (www.ipwea.org/fleet)
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 123 of 131
APPENDIX 8 – DRAFT SERVICE LEVEL AGREEMENT BETWEEN
FLEET MANAGEMENT/MECHANICAL SERVICES/END USERS
Service Level Agreements
Where is an SLA Required
• Fleet Owner with Fleet User
• Fleet Owner with Internal Maintenance Service Provider
• Fleet Owner with External Maintenance Service Provider
Determine Content
• The level and scope of the service to be provided
• The standard in terms of quality, quantity and timeliness of the service
• A clear agreement on the price or internal charge associated with the provision of the service
• Procedures for paying (or accounting for) the internal charges
• How the service is to be monitored and the performance measures for the service
• Agreement on dealing with any disputes.
Agreement
• All parties must be represented in discussions/negotiations
• Arrange formal sign off once agreement is reached
• Ensure all relevant staff are aware of the commitments
• Ensure regular reviews of performance
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 124 of 131
Clarence Valley Clarence Valley Clarence Valley Clarence Valley
CouncilCouncilCouncilCouncil
DRAFTDRAFTDRAFTDRAFT
SERVICE LEVEL AGREEMENTSERVICE LEVEL AGREEMENTSERVICE LEVEL AGREEMENTSERVICE LEVEL AGREEMENT
RESPONSIBILITIESRESPONSIBILITIESRESPONSIBILITIESRESPONSIBILITIES
FOR FOR FOR FOR
THE SUPPLY OF FLEET MANAGEMENT & THE SUPPLY OF FLEET MANAGEMENT & THE SUPPLY OF FLEET MANAGEMENT & THE SUPPLY OF FLEET MANAGEMENT &
MECHANICAL SERVICES MECHANICAL SERVICES MECHANICAL SERVICES MECHANICAL SERVICES
PARTIES TO THE AGREEMENTPARTIES TO THE AGREEMENTPARTIES TO THE AGREEMENTPARTIES TO THE AGREEMENT
• Fleet Management Fleet Management Fleet Management Fleet Management
• Mechanical ServicesMechanical ServicesMechanical ServicesMechanical Services
• End User DepartmentsEnd User DepartmentsEnd User DepartmentsEnd User Departments
NovemberNovemberNovemberNovember 2012012012015555
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 125 of 131
Fleet Management Responsibilities Fleet Management shall be responsible for:
o Making available to internal customers plant, equipment, vehicles and all other fleet items for hire on a full cost recovery basis.
o Ensuring all reasonable repairs & maintenance, scheduled services and appropriate consumables, including fuel, tyres and oil are included as part of the hire rate.
o Preparing the annual budget fleet replacement report for endorsement by Council as well as subsequent reports to Standing Committees for their endorsement and Council approval for the purchase of both budgeted and unbudgeted fleet items.
o Minimising the whole of life depreciation cost of assets through implementing optimum purchasing strategies linked and or supplemented by optimum disposal strategies.
o Expert technical advice and support as required. o Development of specifications incorporating the latest product innovations and technologies
designed to fulfil the customer’s operational requirements. o Arranging for purchase and disposal of all fleet assets. o Ensuring that the Council’s fleet assets comply with all the appropriate regulatory and safety
standards relevant to their application. o Maintaining a record of all accident related repairs/replacements. Accident repairs of value less
than the insurance excess are managed by Fleet .Accident repairs of value greater than the insurance excess are managed by Administration.
o Advice to light fleet users on minimising FBT penalties/exposure through improved vehicle utilisation.
o Initiating billing of end user departments for repairs deemed to be the responsibility of the end user will rest with the Manager Plant & Depot Services.
Mechanical Services Responsibilities Mechanical Services shall be responsible for providing the following:
o Supply of all necessary labour, materials, plant and equipment overheads to carry out all servicing, repairs and maintenance.
o Maintenance of the plant and vehicles in a usable and safe condition in compliance with all Federal, State and Local Laws including the Occupational Health and Safety Act.
o Regular maintenance of all plant and vehicles in accordance with this Agreement, the manufacturers’ recommendations and manuals and industry recognised plant and vehicle maintenance best practice.
o Supply of all consumables for all plant and vehicles such as oil, grease, tyres, belts, filters, and the like to keep all plant and vehicles operable under fair wear and tear conditions.
o Consumables such as cutting edges, brooms etc needing replacement under fair wear and tear conditions shall be charged to the machine and built into the hire rate.
o In liaison with fleet management, follow-up to suppliers for all warranty claims, charges and adjustments.
o Provide detailed records for the proper reporting and accounting of servicing and repairs of all plant and vehicles.
o Update the fleet management system plant & vehicle service records with detailed labour hours allocated to each task and maintenance failure records. The fleet management system will then produce monthly reports on servicing and repairs of all plant and vehicles using the data provided by the service provider. Records to be complete and maintained within 14 days of completing a job.
o Provide a servicing booking, information and scheduled maintenance and repair service. o Provide advice to the end User of a scheduled service a minimum of 14 days in advance. o Prepare the service schedule for the weekly service scheduling meeting. o Tagging of a vehicle once handed to the workshop. A vehicle once accepted by the workshop
cannot be taken from the workshop until cleared by the workshop supervisor. Note that the workshop shall not undertake “patch up” jobs and vehicles will only be released if they meet all OH&S safety requirements.
The response times to make plant and vehicles operable following breakdowns shall be:
o Respond to the request and confirm to the Supervisor that they are responding to the breakdown request within 30 minutes of being advised of a breakdown.
o Within 30 mins of arrival on site advise the Operations Supervisor the expected time to make operable or other action to be taken (within the hours of 6AM – 5PM).
o At the earliest opportunity the following day (by 3PM at latest) the Workshop shall advise the Operations Supervisor of the job status and the estimated timeframe for making the vehicle operable.
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 126 of 131
o If the Workshop does not have the resources to complete the work in house then the work will be outsourced, provided this will result in a more timely repair.
o Out of hours call out requirements shall be referred to the Workshop Supervisor. Response to a defect report
o A defect report shall be assessed and either attended to promptly or scheduled for future repair via a new job creation in the fleet management system and the Operations Supervisor be advised accordingly.
The Fleet User’s Responsibilities The User shall be responsible to ensure the following:
o Daily checks are completed and recorded in the daily check book and signed off weekly by the Supervisor
o Any maintenance requirement identified shall be recorded on an operator’s requisition form (defect report) and signed by the Operator and Supervisor and submitted promptly to the Workshop Supervisor. (A defect report shall be assessed and either attended to promptly or scheduled for future repair via a new job creation in the fleet management system and the Operations Supervisor shall be advised accordingly).
o Presenting the item for service at the agreed time (eg 8am) in a clean state (not covered in mud) so maintenance work can commence immediately. Any cleaning required by mechanical services shall be recorded on a job card or in the fleet management system as Operator Inattention.
o Outside of emergency situations, provide at least 48 hours notice to the service provider if an item scheduled for service is required for operational use on that day.
o Ensuring an item is not serviced more than 5% beyond the manufacturer’s recommended service schedule.
o All necessary driver / operator licensing, induction, training and instruction as necessary to meet all Federal, State and Local Laws including the Occupational Health and Safety Act.
o Operating all plant and vehicles strictly in accordance with the manufacturer’s recommendations, safe work practices and good practice.
o Keeping the plant and vehicles clean and fit for use as required for normal operation. o Daily cleaning and “maintenance” of all plant and vehicles as required by Fleet Management. o Attend a weekly service scheduling meeting. o Provide the appropriate function cost number for the recovery of the cost of accident damage
repairs up to the value of the insurance excess, for any plant and light vehicle in the client’s care. This does not include an accident that is acknowledged as the fault of another driver.
o Maintain correct and timely records of internal and external plant hire hours and appropriate cost number allocations.
Dispute Resolution Disputes should be resolved by the parties however if the parties cannot resolve the dispute then it will be referred to the appropriate Director(s) for determination. Signed Fleet Management Name__________________________ Date___________________________
Mechanical Services Name__________________________ Date___________________________
Waste Name__________________________ Date___________________________
Parks Name__________________________ Date___________________________
Maintenance Name__________________________ Date___________________________
Construction Name__________________________ Date___________________________
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 127 of 131
APPENDIX 9 – EXAMPLE FLEET REPORT
Business Rules Unifleet Reports RAG Charts
Bar charts are scaled by asset count ONLY. Reports are run on the 23of every month, covering the previous 6 months data. (For example, report run on 23
rd November covers data from 1
st May - 31
Utilisation Light Fleet Major Plant and Hire Plant Only assets with meter types Hours or Kilometres *Trailers that carry payload (gravel, water, fuel, machinery, etc) and have a value over $10,000 will be included. (These have to have a hub meter.)*Trailers that are dedicated plant trailers attached to an operational unit(truck) must be attached as a child (trailer) to the parent (truck) and are exempt from hub meter requirements. (Allocate to Minor Plant Category so they are not included in report.)
Operational Productivity Light Fleet & Major Plant Only assets with meter types Hours or Kilometres *Only applies to assets that use Income Units to recover costs.
Fuel Consumption Light Fleet Major Plant and Hire Plant Only assets with meter types Hours or Kilometres *Tick to exclude non-fuel using trailers from fuel consumption report.
Optimum Replacement Light Fleet, Major Plant & Assets Under $10,000 *This report is run with no end date to ensure that all relevant data is analysed.
Review of Light Fleet & Heavy Plant
EXAMPLE FLEET REPORTING TO EXECUTIVE MANAGEMENT (SOURCE UNIF
LY. Reports are run on the 23rd
of every month, covering the previous 6 months data. (For example,
31st October.)
RED AMBER
*Trailers that carry payload (gravel, water, fuel, machinery, etc) and have a value over $10,000 will be included. (These have to have a hub meter.) *Trailers that are dedicated plant trailers attached to an operational unit (truck) must be attached as a child (trailer) to the parent (truck) and are exempt from hub meter requirements. (Allocate to Minor Plant Category
Assets with actual utilisation vs budget utilisation of greater than +30% higher, or greater than -30% lower
Assets with actual utilisation vs budget utilisation of less than or equal to +30% higher but greater than +20% higher, or less than or equal to -30% lower but more than -20% lower
costs.
Assets with a variance between actual utilisation % and actual income units % of greater than +20% or greater than -20%
Assets with a variance between actual utilisation % and actual income units % of less than or equal to +20% but greater than +10%, or less than or equal to -20% but greater than -10%
fuel using trailers from fuel consumption report.
Assets with expected fuel economy vs actual fule economy of greater than +30% higher or greater than -30% lower
Assets with expected fuel economy vs actual fuel economy of less than or equal to +30% higher but greater than +20% higher, or less than or equal to -30% lower but greater than -lower
*This report is run with no end date to ensure that all relevant data is
Assets that are overdue for replacement by more than 3 months
Assets that are overdue for replacement by 3 months or less
AGEMENT (SOURCE UNIFLEET)
GREEN
Assets with actual utilisation vs budget utilisation of less than or equal to +30% higher
higher, or less than or equal 30% lower but more than
Assets with actual utilisation vs budget utilisation of less than or equal to +20% higher, or less than or equal to -20% lower
between actual utilisation % and actual income units % of less than or equal to +20%
10%, or 20%
Assets with a variance between actual utilisation % and actual income units % of less than or equal to +10%, or less than or equal to -10%
fuel economy vs actual fuel economy of less than or equal to +30% higher but greater than +20% higher, or
30% -20%
Assets with expected fuel economy vs actual fuel economy less than or equal to +20% higher, or less than or equal to -20% lower
Assets that are overdue for replacement by 3 months or
Assets that have an optimum replacement date yet to come
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 128 of 131
Whole of Life Costs Light Fleet & Major Plant Only
Maintenance Ratio - Scheduled to Unscheduled Light Fleet, Major Plant & Assets Under $10,000 *This report uses data captured over the previous 12 months
Scheduled Maintenance Light Fleet, Major Plant & Assets Under $10,000
Maintenance Failure Light Fleet, Major Plant & Assets Under $10,000 *This report uses data captured over the previous 12 months. *It is designed to provide information to assist fleet managers to improve preventative maintenance practices.
Flat Rate Times Light Fleet & Major Plant Only
Downtime Reports Light Fleet & Major Plant Only *This report is based on Unifleet standard available hours where 2600 hours = 10 hours a day 260 days a year. *This report uses the last 12 months data one month in arrears. (For example, report run on 23
rd November covers data from 1
November in prior year - 31st October in current year.)
Review of Light Fleet & Heavy Plant
Assets with costs vs income ratio of greater than +10%, or greater than -10%
Assets with costs vs income ratio of greater than +5% but less than or equal to +10%, or greater than -5% but less than or equal to -10%
This report uses data captured over the previous 12 months
Assets with non-scheduled maintenance hours of more than 70% of the scheduled maintenance hours
Assets with non-scheduled maintenance hours of lesthan or equal to 70%, or more than 30% of scheduled maintenance hours
Assets that have exceeded their service due date by more than 45 days
Assets that have exceeded their service due date by 45 days or less, but more than 14 days
*This report uses data captured over the previous 12 months. *It is designed to provide information to assist fleet managers to
Assets with normal wear and tear maintenance hours of more than 70% non-scheduled maintenance hours
Assets with normal wear and tear maintenance hours of less than or equal to 70%, or more than 30% of nonscheduled maintenance hours
Assets with labour allocations on scheduled services more than 30% higher than budget flat rate
Assets with labour allocations on scheduled services less than or equal to 30% hibut more than 20% higher than budget flat rate
available hours where
*This report uses the last 12 months data one month in arrears. November covers data from 1
st
October in current year.)
Assets with cumulative downtime hours in the last 12 months more than 390 (or 15% of 2600)
Assets with cumulative downtime hours in the last 12 months of 390 or less but more than 260 (more than10% of 2600)
Assets with costs vs income ratio of greater than +5% but less than or equal to +10%,
5% but less 10%
Assets with costs vs income ratio of less than +5% or less than -5%
scheduled maintenance hours of less than or equal to 70%, or more than 30% of scheduled
Assets with non-scheduled maintenance hours of less than or equal to 30% of scheduled maintenance hours
Assets that have exceeded their service due date by 45 days or less, but more than
Assets that have exceeded their service due date by 14 days or less
Assets with normal wear and tear maintenance hours of less than or equal to 70%, or more than 30% of non-scheduled maintenance
Assets with normal wear and tear hours of less than or equal to 30% of non-scheduled maintenance hours
Assets with labour allocations on scheduled services less than or equal to 30% higher, but more than 20% higher
Assets with labour allocations on scheduled services less than or equal to 20% higher than budget flat rate
Assets with cumulative downtime hours in the last 12 months of 390 or less but more than 260 (more
Assets with cumulative downtime hours in the last 12 months of 260 or less (less than10% of 2600)
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 129 of 131
This page has been left blank intentionally
Review of Light Fleet & Heavy Plant
This page has been left blank intentionally
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 130 of 131
Report forReport for
Uniqco International Pty Ltd
PO Box A366
Australind WA 6233
A Unique Offering
Pty Ltd
TO BE TABLED ATTACHMENT A ITEM 14.220/15 - Page 131 of 131
Top Related