HomeMy WebLinkAbout12.14.20 work session minutes COUNCIL WORK SESSION
December 14, 2020
4:40 p.m.
Harold E. Getty Council Chambers
Members present: Boesen, Amos, Morrissey, Klein, Feuss, Grieder, and Juon.
Moved by Juon seconded by Amos that the Agenda, as proposed,be approved. Voice-vote Ayes:
Seven. Motion carried.
Objective: Discussion of leasing vehicles for the Police Department.
Chief Joel Fitzgerald explained that one of the first things he did as chief was take an inventory of
the Police Department's equipment and vehicles. He found that the department's unmarked
vehicles are in a rapidly depreciating and deteriorating state. He worked with Enterprise Rental
cars to look at leasing vehicles rather than buying vehicles. He explained that it is important to
not just look at the facade of the vehicle but also the maintenance required with older vehicles.
There is a state contract that would allow the city to take advantage of a leasing program. He
introduced Brandon Gish with Enterprise Fleet Management.
Brandon Gish, Enterprise Fleet Management, provided an overview of the Enterprise Fleet
Management program. He explained that in the state of Iowa they are currently working with
Northeast Iowa Community College and Mason City, but that they work with governments
throughout the country. The fleet profile of the Waterloo Police Department is most vehicles have
an odometer of 90,190 miles; they put on approximately 11,223 miles per year, and are over ten
years old with a replacement of one vehicle per year. Safety is an additional concern. Safety
improvements such as back up cameras were becoming available in vehicles in 2012. Several of
the vehicles in the fleet are older than 2012. He provided an overview of the impact of depreciation
on the current fleet along with the proposed acquisition of GMC pickups. The vehicle
recommended is a 2021 GMC Sierra, 1500 SLE 4x4 crew cab 6.6ft box.
Mr. Boesen questioned what happens if the city cannot sell the vehicle for$38,000.
Brandon Gish explained that based on the historical data of resale and their experience in selling
vehicles, the $38,000 is a conservative number and they are very confident in their numbers.
Mr. Boesen questioned what if it didn't sell for the anticipated amount.
Chief Fitzgerald questioned if there are circumstances where vehicles will sell for less than the
expected price.
Brandon Gish explained that the situation could happen for instance when there is major damage
to a vehicle. They depreciate the vehicles aggressively enough to ensure the city is equitable on
the back end.
Mr. Boesen clarified that the proposal is for purchasing pickup trucks rather than sedans.
Chief Fitzgerald confirmed and explained it is because the resale value on them is high that the
city should come out net positive by the end of the lease,building revenue each time one is turned
in.
Mr. Boesen questioned if they would be spec'ing pickup trucks with a sliding bed and secured
topper for the property room truck for moving evidence.
Chief Fitzgerald confirmed.
Mr. Boesen questioned if the older vehicle sitting down in barn ten would also be replaced with a
new pickup.
Chief Fitzgerald confirmed.
Mr. Boesen question how the lab vehicles would be managed through this system.
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Chief Fitzgerald commented that he had not factored those vehicles into this plan.
Mr. Boesen questioned the same for the VCat vehicles which are used for surveillance.
Joel Fitzgerald commented that the VCat vehicles are considered burned. There isn't a person in
the city that doesn't know the VCat vehicle, so replacing and upgrading those vehicles would be
on their agenda. The real positive is getting the one-year turn around so for instance, each year we
could get a different color. Right now we have no way of trading out unmarked vehicles doing
undercover operations.
Mr. Boesen, when the city ran two shifts of investigations the investigators shared a vehicle, but
now we're running one shift of investigations. If we were to revert back to two shifts, would we
need this many vehicles.
Joel Fitzgerald, explained that right now this option would fit with the current need,but if the city
grew then it would need to be reexamined. However,the vehicles we have now are at such an age
that we really should be looking at this.
Mr. Boesen, what funding source is identified for this.
Joel Fitzgerald explained that the startup would be about$58,000. Do we want to continue buying
vehicles at a rate they are depreciating now or look at this as a trial and maybe moving towards an
entire city where we are able to lease vehicles and turn them in at a profit. He stated that we would
be spending the amount of one fully outfitted patrol vehicle to create a new scenario all together.
Brandon Gish explained that the program would save$900,000 across the 26 vehicles from where
the city is at today. The funds really just need to be focused on the first year and that difference is
about $58,000.
Michelle Weidner, Chief Financial Officer, commented that the$900,000 savings includes a lot of
assumptions. She asked if he could share the actual cash back from the vehicles, and also how
many other customers are having the positive returns.
Brandon Gish, stated as discussed previously, the vehicles with a heavier after market would be
on a different replacement strategy and they would customize for each one. Often times for the
investigation vehicles, the short cycling is the best strategy for them, as they do not have as much
outfitted to them. When looking at the resale values for the 23 vehicles the city currently has,they
are about $71,000 in resale value. If we were to sell those vehicles today, those vehicles in this
strategy,would be sold for$38,400, giving the city$10,000 of equity on the backend. Beyond the
lease cost, it is about $2,700 that would be issued back to the city, which he would recommend
rolling that into the operating expenses for the fleet as well so at the end of the day the budget on
the operating side is of benefit, and the capital side.
Mr. Boesen questioned what the front-end first year cost.
Brandon Gish, explained that the difference between the lease amount and the resale of the owned
vehicles puts the amount at $58,000.
Mr. Boesen questioned if the upfront amount would be the $168,000 to pay the first years lease.
Brandon Gish confirmed.
Mr. Morrissey questioned if a cost savings can be guaranteed.
Brandon Gish commented that he cannot guarantee that every vehicle would return an equity gain
but in this scenario this does prove to be a cost savings features and a lot of municipalities have
taken advantage of this strategy.
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Mr. Morrissey commented that all the vehicles in the fleet are public assets.
Michelle Weidner commented that they are assets but they are also very depreciated.
Mr. Morrissey questioned if they would be vehicle assets if they were leased.
Michelle Weidner commented that she does not have a complete answer to that. Equity lease is a
unique term and may be that they are city assets for those 12 months.
Mr. Morrissey commented that as he understands it, a leased vehicle is not your vehicle, it belongs
to whomever you are leasing it from. He questioned why the city wouldn't just buy the trucks that
retain their value and have them as assets rather than lease them.
Joel Fitzgerald commented that you would have to continue buying at a premium price to restock
the fleet. With this strategy, we would be able to restock the fleet and create revenue for the city.
Mr.Morrissey questioned where leasing would end and would the city start leasing out employees.
Joel Fitzgerald commented that this presentation is limited to leasing out investigative vehicles
due to the economic burden and strain they place on the central garage.
Mayor Hart commented that if council has questions to email them to the Chief and give Michelle
time to chime in. Another work session should be scheduled to continue working through these
questions.
With no further business before the Council, it was moved by Morrissey seconded by Boesen that
the meeting be adjourned at 5:19 p.m. Voice-vote Ayes: Seven. Motion carried.
Kelley �elchle
Kelley Felchle
City Clerk