Primary Department: Universal Services
Primary Department Head/Elected Official: Sindhu Menon, Executive Director & CIO
Secondary Department: Choose an item.
Secondary Department Head/Elected Official:
Regular or Supplemental RCA: Regular RCA
Type of Request: Policy
Project ID (if applicable):
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MWBE Contracted Goal (if applicable):
MWBE Current Participation (if applicable):
Justification for 0% MWBE Participation Goal: Choose an item.
Grant Indirect Costs Rate (if applicable):
Justification for 0% Grant Indirect Costs Rate (if applicable): Choose an item.
Request Summary (Agenda Caption):
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Request for approval to set rates for the Fleet Fund.
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Background and Discussion:
Universal Services Fleet Department engaged Matrix Consulting Group in 2026 to conduct a comprehensive Fleet Study and provide an independent assessment of Fleet operations. The engagement included development of a fleet profile and current-state assessment; fleet right-sizing and utilization analysis; lifecycle, replacement-planning, and asset-control review; evaluation of shops, parts, fuel, governance, maintenance, and industry best practices; a fleet chargeback, cost-allocation, and cost-recovery analysis; evaluation of Fleet budget needs, future costs, and funding-model options; an updated replacement scoring model; and a final prioritized implementation plan. Matrix conducted the study from March through August 2026 and issued its preliminary Fleet Management Consulting Report on August 31, 2026.
Harris County has held the Fleet labor rate at $55.00 per hour since 2016. Parts, fuel, and outside services are generally billed as pass-through costs without markup, leaving a substantial portion of Fleet's operating and administrative costs unrecovered. As those costs have increased, the Fleet Fund has absorbed the difference, and its available balance has declined.
The cost recovery matrix calculated the full-cost framework maximum justifiable rates of $99.97 per labor hour, a 5% parts surcharge, a 4.3% fuel surcharge, and an administrative charge based on the Fleet administrative cost pool.
Universal Services Fleet Department recommends adopting the Matrix chargeback structure beginning in FY27, with lower rates and a modified Asset Administration Charge to better reflect how Fleet operates. Fleet’s proposal sets the labor, parts, and fuel charges at approximately 70% of the increase needed to reach Matrix’s full-cost rates. For the administrative component, Fleet replaced Matrix’s flat per-asset charge with a tiered Asset Administration Charge based on asset type and the level of service each agency receives.
Fleet recommends setting the FY27 labor rate at $86.50 per hour, a 3.5% surcharge on parts and a 3.0% surcharge on fuel and an asset administration charge stratified asset type and agency service level. These rates have been determined in conjunction with the Office of Management and Budget and will be effective October 2026 as a three-year increasing rate model to fully cost recover the Fleet Fund operational costs.
Expected Impact:
The proposed labor rate will gradually assist in the recovery of the Fleet Fund balance. The current charge back model does not fully recover existing operating and administrative services. The new rate will address this moving forward.
Alternative Options:
The Fleet Fund balance will continue to decline at the current labor rate and may not be sufficient to sustain existing services that are not fully charged back in the current model.
County Strategic Plan Goal: N/A
County Strategic Plan Objective: Choose an item.
Justice/Safety Initiative (Goal 1): Choose an item.
Infrastructure Initiative (Goal 2): Choose an item.
Economy Initiative (Goal 3): Choose an item.
Health Initiative (Goal 4): Choose an item.
Climate/Resilience Initiative (Goal 5): Choose an item.
Housing Initiative (Goal 6): Choose an item.
Additional notes related to the Strategic Plan:
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Personnel (Fill out section only if requesting new Position Control Numbers (PCN)s) |
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County Attorney’s Office Legal Review (for Harris County Code Items only) |
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Anticipated Court Date: 10/29/2026
Anticipated Implementation Date (if different from Court date): Click or tap to enter a date.
Emergency/Disaster Recovery Note: Choose an item.
Contact(s) name, title, department: Meg Philip, Chief Financial Officer, Universal Services, September 30, 2026
Attachments (if applicable):