Contract Amendment #1 with Baker Tilly for Analysis of Fleet Funding and Maintenance should not be a priority
First as a priority project associated with Dante leaving, I thought the water and sewer infrastructure inventory would be the priority. After years of misappropriating money from rate payers to fund general services, it seemed we were turning a corner and beginning to prioritize water and sewer.
Instead, the critical nature of a vehicle replacement study has popped up. One could question both the critical nature of the work and the cost of the study.
First, there is a vehicle and equipment replacement plan that was published in the previous year’s budgets but left out of this year’s budget for some reason. It had spreadsheet errors as is common with city documents, but they are easily fixed.
It appears to be a complete list of vehicles and equipment, although I see a prius with police markings near my home that is not listed. We don’t really have to pay a consultant to put vehicles in the spreadsheet. It would be a 15-minute task for department heads to check the list. It would be the same 15 minutes they would spend when Baker Tilly asks.
The simple task of adding a 4% inflation assumption for the future creates meaningful numbers for future cost replacement and we have a working model that is also the deliverable from Baker Tilly. So far, I have spent about an hour recreating the spreadsheet and making it useful.
The print is small here, but you have the original in the 23-24 budget document.
The fact it is coming up at this meeting presumes the study is critical, but when you look at the departments it is clear that there are no immediate critical issues with vehicles replacement for the next 3-5 years and refunding the vehicle/equipment replacement fund is trivial in the context of the overall budget. There are legitimate questions about how many vehicles are needed in public works and the police inventory. The fire equipment replacement strategy is really better suited to Gold Ridge but we can look and see if there are critical issues.
FIRE
First, we look at the fire department. Equipment replacement has been an issue with recent councils, but with the decision to replace the Type 3 in 2022 and the type 1 in 2024 it looks like the most critical items have been funded. There is an aging ladder truck, but it is unclear how often it is being used. Following the plan below there are essentially two pickup trucks that are scheduled for replacement in the next three years and neither has more than 50,000 miles, which is not a lot for modern vehicles.
POLICE
Police equipment replacement is imminent according to the plan below. With the exception of a trailer all of the vehicles are scheduled to be replaced in the next three years. The first question that Baker Tilly cannot answer is how many vehicles do we need? What do we do with two Motorcycles. Do they need to be replaced? We field two officers a shift and presumably a Sergeant, a Captain and the Chief may all need to be out at the same time. 11 motor vehicles and 2 motorcycles seem excessive. Perhaps some vehicles are legacies that were never sold off? The department needs to develop a rationale for what equipment is critical and needs to be replaced and what is in reserve and can continue to age. Baker Tilly cannot make these decisions.
Regardless this is not a critical problem. Assuming the replacements are costed correctly, there is funding in the Vehicle Replacement fund to pay for all of the identified replacements in the next three years. It will not contribute to our fiscal emergency unless there are other needs that would go unfunded and Public Works has the most vehicles in the city. We will look at those next.
PUBLIC WORKS
Public Works has the most vehicles and the most equipment in the city. Looking out for 10 years the replacements are well spaced, and the costs might just be absorbed into the budgeted expense as they come up. Funding a reserve for replacement costs annually would require only about $150,000 added to the vehicle replacement fund each year. These numbers don’t include the sale value of surplus equipment so the actual costs would be less unless inflation is more than 4%. There is the fundamental question that public works has 13 FTEs and 13 vehicles that could transport or be used as utility vehicles. Do most public works employees take a vehicle to the job. Do they work individually? These are not Baker Tilly Questions.
Public works equipment has some substantial cost items. The purpose and priority of an ATV replacement needs to be discussed by staff. Baker Tilly can’t help. Replacing a Featherlite trailer given the lack of wear items seems excessive. Replace the tires and the bearings as needed.
The Vactor Truck is expensive and cleaning leaves from storm drains is important. It is unclear if they have gotten the expected wear given, we have a limited number of storm drains with leaves in our 1.2 square mile city. Again, an issue for staff to debate and decide. You don’t have to pay Baker Tilly $18,900 to facilitate, do you?
Ultimately there are three questions:
1. Is the assessment of our vehicle and maintenance plan a higher priority than accelerating an assessment of our water and sewer infrastructure? Each is funded from different buckets that have funds, so the need to prioritize is simply staff time available to manage the projects.
2. Is the cost of the project reasonable given the work needed to complete the project
3. Will the plan reduce our vehicle costs by $18,900, making the project cost effective.
ANSWERS:
1. Reviewing the current plan from the spreadsheets in last year’s budget it is clear that the available funds in the existing vehicle replacement fund will cover nearly all of the immediate replacement needs for police and public works over the next 3-5 years. So this study is not critical.
2. Assuming Baker Tilly pays an analyst $100/hour or $208,000 a year salary and benefits. $18,900 can pay for 189 hours of work. Between police and public works, we only have a total of 32 vehicles. They could spend up to six hours studying each vehicle. There is an argument that the money and time would be better spent on doing annual maintenance on the vehicles instead of studying them.
3. The plan seems unlikely to reduce operational costs by any significant margin. The city spends only about $75,000 per year on fuel. If you can get 10c a gallon discount you might save $1500 per year from a fuel procurement plan. If you have to drive to Santa Rosa to get the discounted fuel the cost of fuel and wear and tear would limit any potential savings. A maintenance plan sounds great but is not terribly difficult. Modern vehicles don’t have ignition parts that get replaced every 10,000 miles. Based on milage most of the vehicles in the city would not reach oil change milage limits more than once or twice a year. Few vehicles will need tire replacements during their lifetime. A schedule of annual or biannual oil changes and transmission fluid every 5 years is pretty much the extent of the maintenance plan.
The Baker Tilly proposal is professional and sounds great. In reality for a small town few if any of the deliverables will move the needle to make us more efficient. It is a nice to do activity, however given our financial crisis and limited staff time and no really critical issues with replacing vehicles as necessary for the next three to five years it seems like prioritizing a water and sewer infrastructure study would serve the taxpayers better.