AGENDA #4g
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TO: |
Roger L. Stancil, Town Manager |
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FROM: |
Bill Letteri, Public Works Director Kay Johnson, Finance Director |
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SUBJECT: |
Fiscal Year 2006-07 Vehicle Replacement Plan |
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DATE: |
March 26, 2007 |
The attached resolution would authorize the Manager to seek proposals for financing of Town vehicles as part of the vehicle replacement plan. The proposed financing would provide funding for the purchase of the list of vehicles included in Attachment 1.
In June 1998, the Town contracted with a consulting firm, David M. Griffith, Inc., now MAXIMUS, to develop a long-range vehicle replacement plan that would allow the Town to replace vehicles and related capital equipment in accord with the normal useful life of each vehicle. The two main goals of the vehicle replacement study were to develop a vehicle replacement plan that would eliminate the backlog of deferred replacements and to provide a predictable level of annual funding requirements.
David M. Griffith found that, historically, the Town was spending approximately $650,000 per year for vehicle replacements. In order to achieve an optimal replacement schedule they recommended that we spend about $1,500,000 per year. In April 2001, we retained the services of MAXIMUS for a follow-up “Vehicle Replacement Program Post-Implementation Review.” Upon review we made slight adjustments to the loan terms, extending to seven year increments.
Attachment 1 is a list of 48 vehicles recommended for replacement and four additions that were recommended by the Manager and approved by the Council in the fiscal year 2006-07 budget. The total estimated cost of these vehicles is $1,870,800. Of that total, $552,000 is included for replacement of three rear loading refuse trucks and one street sweeper.
At the beginning of the fiscal year 2006-07 budget process, the replacement list included 76 items that had reached their planned service life, with a total estimated cost of $2,700,000. In accordance with standard procedures of the vehicle replacement program, each vehicle on the list was reviewed considering age, mileage and mechanical condition. Based on that review, we were able to defer replacement of 28 vehicles to a subsequent year. Due to the overall good condition of several vehicles, we were able to defer a large number to subsequent years.
The fiscal year 2006-07 budget request of $1,870,800 for vehicle replacement is in line with the spending level recommended by MAXIMUS when inflation and program additions are considered. Aggressive replacement of aging vehicles over the first several years of the plan has dramatically improved the operational effectiveness of our vehicles. As we move into our tenth year under this Fleet Replacement plan in fiscal year 2007-08, we expect to see our budget request decrease slightly as we begin to see the positive effect of a cyclical replacement plan.
The proposed plan has been reviewed and approved by the members of the Town’s Green Fleets Committee. In accordance with the recommendations of the Committee, we plan to replace several larger vehicles with smaller Ford Escape SUV hybrid electric, one Honda Civic CNG (Compressed Natural Gas) and an ethanol burning (E-85) midsize sedan. Within the Public Works Department we are also replacing 1/2–ton supervisor vehicles with smaller and more fuel efficient compact pick-up trucks.
Prior to being reviewed by the SEE Committee at their March 5, 2007 meeting, the fleet replacement plan was carefully considered by a small group of individuals. After initial review, the Green Fleets committee further scrutinized the list in an attempt to meet Council mandate for green fleet status. As an added measure, the Green Fleets Committee considered the list a final time before submittal to the SEE Committee. The outcome of the March 5, 2007 meeting was to proceed with the approved plan.
We are exploring options with regard to ways to further enhance our use of alternative fuels. As we move into the new Town Operations Center, our focus will be on maximizing the use of our newly acquired E-85 fuel pumps, as well as, continuing to grow our CNG usage. The access to these fueling options will have a positive impact on future fleet replacement plans.
We recommend that the Council adopt the following resolution authorizing the Manager to seek proposals for financing Town vehicles with a replacement cost totaling $1,870,800.