The University of Tennessee, Knoxville

Tennessee County Municipal Advisory Service

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Fleet Funding

Reference Number: MTAS-1959
Tennessee Code Annotated
Reviewed Date: June 02, 2017
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Operate fleet services as an internal service fund and establish a city-wide fleet replacement fund. The replacement fund should be business-oriented – i.e. develop an approach in which an initially capitalized fund would be replenished and expanded through annual amortization of vehicles and equipment. This amortization fund would be managed and paid by fleet, but the cost would be recouped from the user departments through lease and/or rental payments. In many cities, the fleet manager and chief finance officer work co-operatively to manage this fund.

If fleet services will also be maintaining items such as generators or pumps, mowers, etc., associated costs should be designated, tracked, and charged to the appropriate cost center.