NC agencies spinning wheels on cost of state-owned cars
Posted December 13, 2010
Updated December 14, 2010
Raleigh, N.C. — North Carolina is facing an estimated $3 billion to $4 billion budget shortfall. Potential cuts to services, even layoffs, have been described as painful. Yet, one year after a WRAL investigation and a call for change from the governor, agencies have yet to figure out how to manage the costs of state-owned cars.
Agencies lease the cars to log millions of miles a year, but taxpayers also pay when the vehicles are parked. A 2009 WRAL investigation found the Department of Correction paid, even though one vehicle sat idle for five straight months.
“As long as bills were being paid, I don't think a whole lot of people paid a whole lot of attention to it,” said Speros Fleggas, deputy secretary of the Department of Administration, which oversees the motor fleet.
A year later, departments are still paying millions of dollars for unused miles.
Agencies lease vehicles from the state department of Motor Fleet Management. By law, Motor Fleet charges for a monthly minimum of 1,050 miles per car and more for every mile over that. The cost covers maintenance, insurance and gas. However, if cars travel fewer than 1,050 a month, agencies must still pay the flat rate.
“I think it's a good system. It may not be perfect,” Fleggas said.
After WRAL’s 2009 stories, Fleggas says management changes were put into place to improve efficiency. About eight months later, each state department appointed a vehicle coordinator.
“There wasn't really one person designated within an agency that monitored (vehicle use),” he said.
Fleggas and his colleague, Chief Operating Officer Anne Bander, say it's still too early to show improvements.
“It's going to be refined as we learn more and the data becomes more robust. I think we may continue to make changes,” Bander said.
Records obtained by WRAL prior to the management moves show very little changed in unused miles. In some cases, the waste got worse.
In fiscal year 2009, the DOC spent about $1.7 million for cars that didn't meet minimum mileage. That increased to $2.8 million for the 2010 fiscal year. Health and Human Services used its fleet more, but still spent more than $1 million on cars that didn't reach 1,050 miles.
North Carolina State University and The University of North Carolina at Chapel Hill reduced the number of leased vehicles, but records show the cost for unused miles per vehicle went up. In many cases for N.C. State, it would have been cheaper to reimburse staff for using personal vehicles.
The bottom line is managing state vehicles is not a perfect science. Motor Fleet set up an online resource to advise departments on the best options for vehicle use, including the use of personal cars.
Many agencies want vehicles for less than the minimum mileage, possibly for seasonal needs or a regional coverage area. The DOC filed to be exempt from the minimum mileage requirement for 2,000 of its vehicles.
The dusty DOC vehicle that sat parked for months last year got moving again, but rarely came close to the 1,050 mark. WRAL also found two vehicles with lower mileage logs assigned to DOC’s central pharmacy.
“(They are) traveling on a daily basis, a frequent basis, but they may not be traveling long distances. So is the mileage going to add up to 1,050? Not necessarily. Are they using the vehicles efficiently? Yes, we think so,” said DOC spokeswoman Pam Walker.
Walker says the 1,050 rule doesn't work for most vehicles, but a change would require legislative action. Agencies have been asking for exemptions, and state leaders hope vehicle coordinators will find ways to make the fleet more efficient.
Governor Bev Perdue expressed frustration Monday that an adequate fix has not been found.
"It boggles the mind that people can't come up with solutions that make common sense, that get the job done. That's what I've instructed, and I hope they understand that," she said.