HomeMy WebLinkAbout10A - Vehicle Replacement Program Report
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
JANUARY 22,2008
10A
STEVE ALBRECHT, DIRECTOR OF PUBLIC WORKS
CONSIDER APPROVAL OF A REPORT REGARDING THE PROPOSED
INSPECTION VEHICLE REPLACEMENT PROGRAM
Introduction
The purpose of this agenda item is to provide the City Council with information
regarding a proposed inspection vehicle replacement program.
Historv
Currently the City replaces three police squad cars annually (see agenda item
5G). These vehicles typically are between 18 and 24 months old with more
than 100,000 miles. Once removed from police service, the City 4-6 utilizes of
these vehicles as Public Works, Building Inspection and Code Enforcement
Vehicles for two additional years prior to selling them at auction. These
vehicles average 8,000 miles per year. The City average annual revenue
from the auction of these vehicles is $1,000 each or $3,000 per year as
indicated in the 2008 budget (Revenue Fund 39102).
Because these vehicles are used extremely hard by the Police Department,
the City on average spends more than $1,000 per vehicle in labor and parts to
keep them serviceable for the additional two year period. The vehicles utilized
by the Engineering Department are often used on construction sites which add
to the wear of the vehicles.
These vehicles are less than ideal for inspection for the following reasons:
1) Our current inspection fleet averages 12 mpg;
2) The vehicles are not flex or alternative fuel compatible;
3) The large engine rear wheel drive vehicles are not good winter
vehicles; and
4) They do not allow for transport of ladders and other larger inspection
equipment.
On December 17,2007 City Staff proposed that the City investigate an
Inspection Vehicle Replacement program as part of the Vehicle and Facility
Energy Conservation Plan. As part of that presentation the Council directed
staff to prepare individual reports and bring them back to the City Council for
consideration.
Current Circumstances
City Staff is beginning to prepare the 2009-2013 CIP which includes the
Equipment Matrix. Staff recommends including the proposed Inspection
Vehicle Replacement Program in the CIP based on the rationale proposed in
this report.
\J.J'WV.;. dtY0fprlorlake. com
Phone 952.447.9800 / Fax 952.447.4245
Attached is a copy of the Inspection Vehicle Replacement Program for a 15-
year period. The Program assumes that the City will replace the five vehicles
currently in use over a nine-year period starting in 2009. Beginning in 2009
the City would introduce a new inspection vehicle into the fleet every other
year. The data and assumptions used to estimate the cost impacts are from
existing City Fleet Service records for the squad cars and manufacture
specifications and current state bid data. This plan also assumes a current
average of 8,000 miles per year per vehicle. The results of the analysis
estimate that the City could save up to $150,000 over the 15-year period by
implementing this program. The savings are realized in three areas:
1) Squad Car Sales
Currently the City auctions used squad cars after they have been in
service for a total of three-and-a-half to four years. The City's annual
auction proceeds from these vehicles are $3,000 ($1,000 each). In
2007 the average auction sale price for two-year old squad cars
auctioned immediately after police service was $4,200 according to
State of Minnesota auction results. By auctioning the vehicles
immediately the City would generate $12,600. Because the City will
phase in the vehicles over a period of nine years, it is necessary to
retain one of the squad cars every other year to minimize maintenance
costs and keep useable vehicles in the fleet.
Based on this criterion, the City would generate an additional $58,100
from squad car sales over the period of the program after purchase of
the new inspection vehicles. This amount is in addition to the current
annual revenues of $3,000 from squad car sales so as to not negatively
impact the existing budget.
2) Annual Maintenance Savings
Currently the City spends an additional $0.06/mile to keep the squad
cars in service for inspection use. This amount is in addition to the
average amount currently tracked for existing City Fleet Trucks in
service. By phasing out the squad cars, the program saves the City an
additional $27,500 assuming a conservative $0.06/mile savings.
3) Annual Fuel Savings
Currently the City's inspection fleet is getting 12 mpg or less. The
proposed replacement vehicles would utilize four-cylinder engines and
would be a mix of small trucklSUV and cars suitable for the needed
use. These vehicles get between 19-27 mpg City mileage. The fuel
savings over the life of the program are estimated to be $65,040.
Additionally, staff will monitor the availability of Turbo-Diesel and
vehicles. Currently there are none available to meet the City needs but
in 2008 and 2009 they are expected to be available. These vehicles
are expected to get 40+ mpg City. Hybrid vehicles will also be
monitored as technology advances and the City's Maintenance
capabilities increase.
Conclusion
City Staff believes the program is beneficial to both the environment and tax
payers of Prior Lake and should be pursued as part of the 2009-2013
Equipment Matrix.
However the program has been structured to phase in vehicles so that the City
can be sure that they are justified based on use. The program replaces the
vehicles that are most heavily used first. Should the City determine that
replacement of the lesser used vehicles is not justified the City can continue to
utilize squad cars or a different mileage reimbursement program.
ISSUES:
The program utilizes estimated mileages, values and costs. However Staff is
proposing to track the proceeds from the squad car sales and to only replace
vehicles once sufficient funds have been generated and deposited in the
Revolving Equipment Fund. Additionally Staff will track mileage and use of the
squad cars prior to replacement to ensure that the vehicle replacement is
justified. The proposed phasing allows the City Council to monitor and
annually approve the replacement as part of the CIP Equipment Matrix.
FINANCIAL
IMPACT:
Staff believes the estimated savings to the City could approach $150,640.
Even if the program is not as successful as estimated, the savings still should
be significant. There is no tax impact to implement this program. As the City
looks for ways to operate smarter and more efficiently, Staff believes this
program achieves those goals.
In addition to the cost savings, the greater benefit may be the environmental
impact. This program will reduce the City's fuel consumption and provide
greater flexibility in pursuing future alternative fuels.
ALTERNATIVES:
1. Approve this report and direct staff to include the Inspection Vehicle
Replacement Program in the Draft 2009-2013 CIP Equipment Matrix for
City Council consideration.
2. Table this agenda item for a specific reason.
3. Deny this agenda item for a specific reason and provide staff with direction.
RECOMMENDED
MOTION:
Alternative #1.
Reviewed by:
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