“For each vehicle, I track the parts cost, the labor costs, the outside repairs—the total cost of owning and operating that piece of equipment. I chart those numbers, and compare that to depreciation,” Zielinski said. “This enables me to compare one machine to another—like to like. Now we can see which units are more costly to own and operate utilizing specific metrics.”

Previously, Lake County had a policy of replacing light-duty equipment at seven years or 70,000 miles, and no replacement policy for heavy equipment.

“IT ALL GOES BACK TO LIFE CYCLE COSTING.”

“We want to target the vehicles that cost the most money to own and operate. A 7/70 program takes out either the oldest vehicles or the ones with the highest mileage. But those may not be the ones that cost you the most,” Zielinski said.

Life Cycle Costing (LCC)—using a machine’s initial purchase price, maintenance and operating costs, and resale value to determine the true cost of owning and operating equipment—drives Zielinski’s fleet strategy.

He began using LCC with the fleet’s 515 light-duty vehicles. “It’s a ramp-up program. We started with the equipment that has the biggest impact on our budget—the light-duty vehicles,” Zielinski said.

LCC is new to Lake County with regard to fleet replacement strategy, so Zielinski needed to update the database. “You have to have a good software program for fleet maintenance, and keep your records current,” Zielinski said.

EXPANDING THE BASE

A Cat^® 950H Wheel Loader that the county acquired in February 2011 was the first piece of heavy equipment purchased using LCC. Machine specs were written to include maintenance costs and the guaranteed buyback price, which enabled the county to purchase a wheel loader based on actual owning and operating costs over the pro- jected life of the machine—not simply the pur- chase price.

Guaranteed buyback is a huge plus. “With the wheel loader, we were able to demonstrate that buyback value has significant cost implications,” Zielinski said. “When you have a company that stands behind its product like that, there’s a comfort level in investing the upfront purchase price of the machine.”

The machine loads salt and other materials into trucks, and clears trees and other debris from roadways.

Operators appreciate the machine’s excellent breakout force, and extended reach. The extended reach provides a range of mobility that enables county crews to load all trucks, with sidewalls at a variety of heights. “That separated it from the competition,” said Zielinski.

He anticipates keeping the machine for 10 years. “We’re getting away from buying something, keeping it for 40 years, and having that piece of equipment become dilapidated and incurring high maintenance costs,” Zielinski said.

Instead of keeping equipment until it no longer works and has no resale value other than scrap, the county plans to sell equipment while it still has some value and then apply the resale funds to the purchase of new machines.

“It all goes back to Life Cycle Costing. If we buy machines with extended warranties, and replace them on a regular basis, they will lower our fleet costs,” Zielinski said.

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