City auditor: Berkeley's fleet replacement fund is millions short, recommends new funding model

The Berkeley city auditor told the council June 29 that the city's fleet replacement fund is materially underfunded and that the public works department lacks complete information to plan timely vehicle and equipment replacement.

The auditor reported the fund balance at about $15.8 million, versus an American Public Works Association recommended level of roughly $23 million, creating an estimated shortfall of about $7 million. The audit also found a multi‑year backlog grew substantially and that the fund has been used for non‑fleet purposes, including personnel costs and upfitting, in some years.

“In part because the current funding model splits departmental payments from centralized budget approvals, the city does not have clear, department‑level accounting of contributions versus needs,” the auditor said in the presentation. The audit recommended that the public works department and city manager update the funding model, improve tracking by department and include electrification funding in long‑range planning.

The auditor highlighted electrification costs: staff identified 32 fleet units that would cost about $1.16 million to electrify, of which only approximately $700,000 had been contributed to date. The report recommended updating the electric‑vehicle transition plan to incorporate all available funding sources and to track expenditures clearly as the city moves toward an all‑electric fleet.

Council placed the audit on the consent calendar for acceptance and directed the city manager to report back with an implementation plan, as the council later approved the consent calendar.