Massena trustees moving forward with fleet management program for village vehicles | Business
MASSENA — Village trustees have agreed to move forward with fleet management of village vehicles, a move that a representative from Enterprise Fleet Management said will save them more than $400,000 over 10 years.
Mayor Gregory M. Paquin and trustees Chad L. Simpson and Christine M. Winston voted yes on the resolution. Trustee Francis J. Carvel voted present, but had expressed his concerns about moving forward after hearing from only one company.
Enterprise Account Executive Connor Kimball said he had been approached by Department of Public Works Superintendent Marty G. Miller to discuss strategies to reduce the overall cost of owning and operating the village’s fleet of vehicles.
Altogether, the village has 39 vehicles in its fleet, and the initial recommendation was to replace 23 of those vehicles that were at least 10 years old or had 100,000 miles on the odometer the first year, followed by smaller numbers of replacements over a five-year period.
“We agreed to take a look at the village vehicles as a whole, including all different departments. For your light and medium duty, about 51% of your vehicles are over 10 years of age, about 72% of your vehicles are over 6 (years old). The current age of the fleet is about 10½ years and, based on your current cycling period, it would take about 14 years to replace all the vehicles in your fleet,” Mr. Kimball said. “These vehicles are not up to spec as far as the reliability and safety as well.”
His proposal was that Enterprise Fleet Management would significantly reduce the age of the fleet using an open equity lease program “to help drive down the overall age of your fleet significantly, reduce the actual cash flow that’s put into the operation of that fleet, have a professionally managed program, and then retaining equity to those vehicles to help reduce your overall costs.”
“By implementing our program, over a 10-year time we have a conservative estimate of about $422,950 in savings in a 10-year period,” he said.
They would do that, in part, by reducing the overall vehicle life cycle from 10½ years to just over three years, lessening preventative vehicle maintenance costs.
“So you’re not going to have vehicles that you’re going to have those expensive repairs because you’re operating on a much shorter term and then capitalizing on the resale value of those vehicles in the useful life of anywhere from three- to five-year lease structures,” Mr. Kimball said.
He said, aside from the savings, there are safety factors involved. For instance, he said, the village has about eight vehicles that pre-date the antilock brake standardization, which went into effect in 2007. There are also vehicles that pre-date electric stability control standardization from 2012.
Mr. Paquin wondered if there were restrictions on opting out of the program. Mr. Kimball said there are no long-term contracts and there are no penalties for getting rid of the vehicles.
Mr. Paquin also wondered if the fleet size could be reduced if the village participates in the fleet management program. Mr. Kimball said they had done that with private entities and municipalities.
“Really, that’s our job,” he said. “We present data to you two or three times a year. If it makes sense to sell a vehicle and not replace it, we will absolutely recommend that. Our goal as a consultant is to make sure that you’re operating at the lowest possible cost of ownership.”
Mr. Carvel suggested that if the village left the program, it would need to come up with money to purchase replacement vehicles. But, Mr. Kimball said, that wouldn’t be the case.
“We don’t put you in a position where you just need to sell those vehicles. You can operate those vehicles even if they’re just 12 months. You can pay out the lease term, you can buy the vehicle outright. There’s different opportunities in which we make that process very simple, and it’s not going to be painful to actually do business with us. That’s the last thing we want to do,” Mr. Kimball said. “So, our goal is to make sure that we can find ways to make sure the process is as simple and financially efficient as we can make it. We’re never going to leave you without vehicles. We’re not going to pull the vehicle from you.”
Mr. Carvel also shared his concern about jumping into an agreement so quickly.
“They’re the largest promotion. It’s not even close,” Mr. Paquin said, noting that other local municipalities and organizations had saved money by entering into an agreement. “I don’t know why it would work for the village of Canton, St. Lawrence (County), Ogdensburg, all these others and not seriously work for us. My fear is if we don’t start this process soon, we’re going to be in a situation where we aren’t going to have access to the vehicles that we want to replace.”
In addition, Mr. Carvel said there were other companies that offer the same service but had not been interviewed by the board.
“I’d like to shop around a little bit,” he said, calling it a “snap decision.”
“There are no other proposals. No one else has come forward to us,” Mr. Paquin said.
Trustees will now review documents that will be prepared for the plan and will be asked to approve them at a future board meeting.