9.             2009 MUNICIPAL FLEET REPLACEMENT PLAN

 

PLAN DE REMPLACEMENT DU PARC AUTOMOBILE MUNICIPAL DE 2009

 

 

 

Committee RecommendationS

 

That Council:

 

1.   Receive, for information, the proposed 2009 Vehicle & Equipment Replacement Plan; and

 

2.   Waive the requirement of section 6. (1) of the City’s Purchasing By-law for “appropriate accounts within Council approved estimates” to permit the commencement of the procurement process for vehicles and equipment in advance of the approval of the 2009 Budget scheduled for December 2008, with the stipulation that the procurement document contain the necessary clause to advise prospective bidders that any contract award will be subject to approval by Council of the budgetary funding.

 

 

RecommandationS du comité

 

Que le Conseil :

 

1.   Prenne connaissance du projet de Plan de remplacement de véhicules et d'équipements pour 2009; et

 

2.   Laisse tomber l’exigence de l’article 6. (1) du Règlement municipal sur les achats de la Ville en ce qui concerne « les comptes appropriés des prévisions budgétaires approuvées par le Conseil » afin de permettre le lancement du processus d’acquisition de véhicules et d’équipement avant l’adoption du Budget 2009 prévue en décembre 2008, à la condition que le document d’acquisition contienne la clause requise visant à aviser les soumissionnaires éventuels que tout octroi de contrat est soumis à l’approbation du financement budgétaire par le Conseil.

 

 

Documentation

 

1.   Deputy City Manager, Public Works and Services’ report dated 9 September 2008 (ACS2008-PWS-FLT-0003).

 

2.   Extract of Draft Minutes, 16 September 2008.


Report to/Rapport au :

 

Corporate Services and Economic Development Committee /

Comité des services organisationnels et du développement économique

 

and Council / et au Conseil

 

8 August 2008 / le 8 août 20089 September 2008 / le 9 septembre 2008

 

Submitted by/Soumis par : R.G. Hewitt,

Deputy City Manager/Directeur municipal adjoint,

Public Works and Services/Services et Travaux publics 

 

Contact Person/Personne ressource : Ken Wetzel, Acting Director

Fleet Services/Services du parc automobile

(613) 580-2424 x52602, ken.wetzel@ottawa.ca

 

City-wide / à l’échelle de la Ville

Ref N°: ACS2008-PWS-FLT-0003

 

 

SUBJECT:

2009 MUNICIPAL FLEET REPLACEMENT PLAN

 

 

OBJET :

PLAN DE REMPLACEMENT DU PARC AUTOMOBILE MUNICIPAL DE 2009

 

 

REPORT RECOMMENDATIONS

 

That the Corporate Services and Economic Development Committee recommend Council:

 

1.         Receive, for information, the proposed 2009 Vehicle & Equipment Replacement Plan; and

 

2.         Waive the requirement of section 6. (1) of the City’s Purchasing By-law for “appropriate accounts within Council approved estimates” to permit the commencement of the procurement process for vehicles and equipment in advance of the approval of the 2009 Budget scheduled for December 2008, with the stipulation that the procurement document contain the necessary clause to advise prospective bidders that any contract award will be subject to approval by Council of the budgetary funding.

 

 

RECOMMANDATIONS DU RAPPORT

 

Que le Comité des services organisationnels et du développement économique recommande au Conseil :

 

1.         De prendre connaissance du projet de Plan de remplacement de véhicules et d'équipements pour 2009; et

 

2.         De laisser tomber l’exigence de l’article 6. (1) du Règlement municipal sur les achats de la Ville en ce qui concerne « les comptes appropriés des prévisions budgétaires approuvées par le Conseil » afin de permettre le lancement du processus d’acquisition de véhicules et d’équipement avant l’adoption du Budget 2009 prévue en décembre 2008, à la condition que le document d’acquisition contienne la clause requise visant à aviser les soumissionnaires éventuels que tout octroi de contrat est soumis à l’approbation du financement budgétaire par le Conseil.

 

 

BACKGROUND

 

As part of Council’s 2005 Capital Budget deliberations, Motion 27/139 directed pre-budget information be provided on the purchase of new vehicles. This report provides information on replacement vehicles.

 

The 2009 Municipal fleet replacement plan includes capital projects for four major operational vehicle classes: paramedic, fire, heavy and light fleets. Leased and rental vehicles are not part of this replacement plan. Transit, Police and Library vehicle replacement programs are dealt with by their respective organizations and are not discussed in this report.

 

 

DISCUSSION

 

Vehicle Replacement

 

A cost-effective vehicle replacement program is essential to proper fleet management.  Reliable vehicles are essential to the City’s efficient and effective service delivery to the public.  Vehicles that are held too long have little or no resale value, while the costs to maintain them are ever increasing.  Vehicles that break down frequently, due to age or extensive use, negatively impact service delivery to the public and can pose a safety risk.  We currently have a replacement backlog of 724 vehicles with a replacement cost of $59 million. Minimizing the vehicle replacement backlog would improve service delivery to the public, increase overall fleet reliability and decrease maintenance costs.  As funding is reduced due to capital rationing, funding allocations to vehicle classes will be reduced based on priority as explained in Document 2 - Vehicle Replacement Process.

 

Fleet Replacement Model

 

The City owns over 2,200 vehicles and equipment in the four operational classes with a current replacement value of $224 million. For details on each vehicle class see Document 1. A replacement model is an integral part of a comprehensive fleet management strategy. A steady state model is a model that replaces vehicles at their expected life. The steady state replacement model would replace 267 vehicles annually at a current cost of $22 million. The current average age of the fleet is seven years meaning vehicles are replaced, on average at 14 years of age. Table 1 below identifies the asset value of the fleet and the steady state replacement model by operational vehicle class.

 


Table 1 - Asset Value & Replacement Model

 

 

 

 

Vehicle Class

Vehicles and

Equipment

Replacement Cost

Expected Life

Expected Utilization

Annual Requirement for Steady State

Vehicles

Cost

 

#

000

Years

Kilometres

#

000

Paramedic

97

$10,552

4.5

220,000

22

$2,100

Fire

111

$62,535

15

150,000

7

$4,100

Heavy

701

$105,140

10

200,000

70

$10,000

Light

1,354

$45,925

7

140,000

168

$6,000

Total

2,263

$224,152

 

 

267

$22,200

 

Historical Spending

 

Since 2001, as seen in Table 2, the City has expended 68% of the steady state model. Percentage of steady state compares the actual amount spent to the steady state target. The fleet is not evenly distributed by age and usage, resulting in fluctuations in funding requirements. Due to prioritization, historical funding for the heavy and light fleets has been below the steady state funding level, which contributes to the vehicle replacement backlogs.

 

Table 2 - Historical Funding by Year and by Vehicle Class

 

 

Year

Fleet Value

Funding

% of Steady State

 

Vehicle Class

Capital Renewal

% of Steady State

 

000

000

 

 

 

000

 

2001

$222,785

$16,597

75%

 

 Paramedic

$13,333

100%

2002

$223,861

$15,196

69%

 

 Fire

$37,575

107%

2003

$225,415

$13,991

63%

 

 Heavy

$63,812

65%

2004

$225,415

$11,383

51%

 

 Light

$19,667

34%

2005

$225,415

$11,424

51%

 

 Municipal

$134,387

 

2006

$227,321

$15,101

67%

 

 

 

 

2007

$202,315

$16,409

82%

 

 

 

 

2008

$218,144

$18,953

88%

 

 

 

 

2009

$224,152

$15,333

69%

 

 

 

 

Total

 

$134,387

68%

 

 Total

$134,387

68%

 

Note:

2004 Funding level resulted from Universal Program Review

 

There is a current vehicle replacement backlog of 724 vehicles & equipment with a replacement cost of $59 million. This can be seen in Table 3. There is a four and a half year replacement backlog for heavy vehicles and a five-year backlog for light vehicles based on the current funding envelope.


 


Table 3 - Replacement Backlog (Projected to December 31, 2008)

 

Vehicle Class

Quantity

Expected Life

Average Age Dec-31-2008

Vehicles > Expected Life

 

Vehicle Replacement Backlog

 

#

Years

Years

#

$,000

Years

 

 

 

 

 

 

 

Paramedic

97

4.5

2.6

0

$0

0

Fire

111

15

9.3

21

$13,840

4

Heavy

701

10

7.8

206

$29,110

4.5

Light

1,354

7

7.5

497

$16,475

4.8

 

 

 

 

 

 

 

Total

2,263

 

7

724

$59,425

3.9

 

2009 Vehicle & Equipment Replacement Plan

 

The estimated 2009 capital tax envelope for municipal fleet renewal is $15 million which will replace 172 vehicles & equipment.  The envelope is based on affordable funding. This funding level is currently being reviewed for the 2009 Capital Budget.   Renewal funding for the municipal fleet is funded from the corporate fleet reserve.  Although the total municipal envelope represents 66% of the funding requested in the LRFP3, the differences are concentrated in the heavy and light fleets due to prioritization.  The envelope for the Heavy fleet is 57% and the Light fleet is 52% of the LRFP3 requirement.

 

Table 4 - 2009 Vehicle & Equipment Replacement Plan

 

 

Vehicle Class

Steady State Model

 

LRFP3 Requirement

2009 Funding Envelope

Average Retirement Age

 

#

$,000

 

#

$,000

#

$,000

Years

Paramedic

22

$2,100

 

14

$1,800

15

$1,920

4.5

Fire

7

$4,100

 

7

$3,500

7

$3,500

20.2

Heavy

70

$10,000

 

64

$11,260

37

$6,525

15.6

Light

168

$6,000

 

216

$6,486

113

$3,388

10.0

 

 

 

 

 

 

 

 

 

Municipal

267

$22,200

 

301

$23,046

172

$15,333

 

 

Paramedic Fleet

The 2009 plan is to replace 15 ambulances. The ambulances have a budgeted replacement cost of $135,000 each. Although ambulances are not evenly distributed by age, they are targeted for retirement at their expected life of four and a half years.

 

Fire Fleet

The 2009 plan is to replace seven vehicles: five pumpers, one tanker and one rescue truck. The vehicles have a budgeted replacement cost of $450,000 per pumper, $400,000 per tanker and $450,000 per rescue truck.


Heavy Fleet

The 2009 plan is to replace 37 vehicles: a variety of vehicles including salt spreaders, dump trucks, backhoes, loaders and graders.  As an example, the salt spreaders have a budgeted cost of $270,000 each.

 

Light Fleet

The 2009 plan is to replace 113 vehicles: a variety of vehicles including pickups, cars and equipment. For example, equipment includes trailers, mowers, etc. The half-ton pickup trucks have a budgeted replacement cost of $24,000 each.

 

Consequence of Not Funding Vehicle Replacements

 

Funding is a critical part of a cost effective replacement plan. One goal of LRFP3 is to bring the renewal of city vehicles to their expected lives within the 10-year plan thereby eliminating the vehicle replacement backlog. However, based on the long term affordable funding envelope, there will still be a vehicle replacement backlog for the Heavy and Light fleets at the end of the 10-year plan. A major reason is corporate reserve balances must be maintained at a specified level. Accepted practice is to replace vehicles at the end of their planned life. By deferring vehicle replacement, additional maintenance costs accumulate until capital is invested. Table 5 below shows the ratio of annual maintenance cost per vehicle utilization (i.e. per kilometre or per hour), for vehicles beyond their expected lives, as compared to the cost within their expected lives.

 

Table 5 - Maintenance Cost Impact of Not Replacing Vehicles

 

Vehicle Class

Vehicle Example

Expected Life

Actual Life

Maintenance Costs

 

 

Years

Years

$/Usage

Fire

Pumper

15

17

171%

Heavy

Snow Plough Salt Spreader

10

12 to 13

184%

Heavy

Ice Resurfacers

10

11 to 14

121%

Light

Pickups (1/2 ton)

7

9 to 13

162%

 

Note:

Maintenance Costs= (Average Cost/Km for the years > Life of vehicle) / (Average Cost/Km for the years < Life of vehicle)

 

Emissions

 

The municipal fleet replacement program provides a valuable means for greening the fleet through energy efficient right-sizing initiatives for light vehicles, as well as the replacement of older heavy vehicles with those meeting modern standards, including more stringent emission requirements.  Significant reductions in all of the criteria air contaminants, such as particulate matter (PM) and nitric oxide (NOx) emissions that contribute extensively to smog formation, can be realized by modernizing the fleet. 


Exception to Purchasing By-Law

 

Timelines for acquisitions of fire trucks, heavy vehicles and ambulances are between 12 months to 2 years while light vehicles can take up to 12 months if manufacturer build-out dates are not met in the spring.

 

In order to ensure timely delivery, requests for proposals (RFP) and requests for tenders (RFT) need to be issued at the earliest opportunity.  As the Budget is scheduled for approval in December 2008, an exception to the requirement of section 6. (1) of the City’s Purchasing By-law for “…appropriate accounts within Council approved estimates” is needed to permit issuance of RFTs and RFPs to ensure the required vehicles are available in a timely manner.  Putting the necessary 'notice provision' in the procurement document as outlined in Recommendation 2 is an acceptable method to allow staff to start the procurement process in advance of any Council approval of the 2009 City Budget and to advise prospective bidders that any award of the contract is ultimately subject to Council approval as part of the 2009 Budget process.

 

Asset Management Reporting

 

Asset Management is an integrated approach involving planning, engineering and finance to effectively manage existing and new infrastructure in order to maximize the benefits, reduce the risk and provide appropriate levels of service to the community in an energy efficient and environmentally responsible manner.

 

Fleet Services Branch (FSB) is a member of the City's inter-departmental Corporate Asset Management Working Group.  CAMWG's membership includes asset managers representing major asset groups within the Corporation.  CAMWG's is currently developing, in conjunction with Financial Services, a reporting framework for the Tangible Capital Assets (TCA) project, which is a requirement of the Public Sector Accounting Board (PSAB), effective for 2009.  The TCA project requires asset validation, depreciation and reporting in the City's external financial statements.

 

Subsequent to the implementation of the TCA project, CAMWG will develop a reporting framework on the state of infrastructure assets that will assist decision-making at a strategic level.

 

 

CITY STRATEGIC DIRECTIONS – 2007-2010

 

The Strategic Objectives addressed in this report include:

 

Service Priorities

 

Priority C. Infrastructure Renewal

Objective 6. Establish or restore key municipal facilities of city-wide significance.

This report allocates the 2009 $15 million capital renewal envelope among the four vehicle classes based on prioritization. It also presents the replacement value of the fleet at $224 million, a steady state replacement model, historical spending, replacement backlog and maintenance cost impact of not replacing vehicles.

 

Transformation Priorities

 

Priority A. Governance

Objective 5. Enhance and develop processes that support and respect the role of members of Council on city-wide initiatives.

This report provides pre-budget information on the purchase of new replacement vehicles and equipment in the amount of $15 million.

 

Priority B. Service Delivery

Objective 1. Create a client service culture.

Fleet Services Branch (FSB) operates as a Centre of Expertise and as a full charge-back organization. FSB meets regularly with clients to discuss vehicle performance and costs.

 

Objective 2. Establish an outcome-based management approach to service delivery.

An exception to the purchasing by-law is requested to ensure timely delivery of vehicles to the clients. This will minimize the acquisition time from budget approval to delivery.

 

Objective 3. Establish an agreed-upon set of flexible and appropriate service standards (one size does not fit all) across the corporation.

As part of the replacement planning cycle, FSB meets with clients to match replacement needs with operational requirements. The intent is to replace like capability with like capability, taking into account operational requirements and changes in technology.

 

Objective 4. Deliver agreed-to level of service at the lowest possible cost.

Replacing vehicles & equipment at the end of their useful lives, based on age, mileage, condition assessment and client input, reduces overall operating costs (i.e. replace the worst first and get the most for your money).

 

 

CONSULTATION

 

There has been no public consultation regarding this item, as this is an internal process.

 

 

FINANCIAL IMPLICATIONS

 

The projected 2009 capital tax envelope for replacement vehicles and equipment is estimated to be $15 million.  Once determined through the Budget process, Finance will distribute the actual capital tax envelope.

 

An exception to the requirements of the Purchasing By-law is being requested for fire, heavy and light vehicles.

 

Should vehicle acquisition costs be less than estimated, residual program funds, up to the budget envelope, will be used to reduce the replacement backlog.

 

 

SUPPORTING DOCUMENTATION

 

Document 1 – Fleet Vehicle Classes

Document 2 – Vehicle Replacement Process

Document 3 – Replacement Planning Cycle

 

 

DISPOSITION

 

Fleet Services Branch will implement the 2009 Vehicle & Equipment Replacement Plan in accordance with the 2009 Capital Budget authority approved by Council.


DOCUMENT 1

FLEET VEHICLE CLASSES

 

Paramedic Vehicles (Program: 902245)

 

There are 97 paramedic vehicles with a current replacement value of $10.5 million. This vehicle class is composed of 69 ambulances, 2 heavy and 26 light vehicles. The overall expected life of the paramedic vehicles is five years. The expected life of an ambulance is four and a half years based on Ministry of Health standards. Ambulances have an average usage of 48,000 kilometres annually as a result of their roaming duty cycle. The average age of the ambulance fleet is three years. The annual steady state funding is $2 million. The City receives subsidy from the Ministry for a portion of the replacement ambulances.

 

Fire Vehicles (Program: 900721)

 

There are 111 heavy fire response vehicles with a current replacement value of $62 million. This vehicle class is composed of heavy response vehicles, which include pumpers, tankers, aerials and heavy rescue. Fire Services also has general-purpose heavy and light vehicles included in the heavy and light vehicle classes. The expected life of a heavy fire vehicle is 15 years based on fire industry standards. Fire pumpers, which represent half of the fire trucks, have a variable usage of between 2,000 and 10,000 kilometres annually as a result of the response nature of their duty cycle. Vehicle condition assessment is the key criteria in determining which fire vehicles should be replaced. The average age of the fire vehicles is 9.3 years. The annual steady state funding is $4 million.  The City does not receive subsidy for fire vehicles. However, there is no PST on the purchase of fire vehicles. There is a vehicle replacement backlog of 21 vehicles with a value of $14 million.

 

Heavy Vehicles (Program: 900722)

 

There are 701 heavy vehicles with a current replacement value of $105 million. The expected life of a heavy vehicle is 10 years based on American Public Works Association (APWA) industry standards. When selecting vehicles for condition assessment, vehicles are ranked by age and usage. Expected usage of 200,000 kilometres or 7,500 hours is used for the heavy fleet. The average age of the heavy vehicles is eight years. The annual steady state funding is $10 million. The City does not receive subsidy for heavy vehicles. There is a vehicle replacement backlog of 206 vehicles with a value of $29 million or over two years of steady state funding for heavy vehicles.

 

Light Vehicles (Program: 900723)

 

There are 1,354 light vehicles and small equipment with a current replacement value of $46 million and an average age of eight years. This vehicle class is 60 per cent composed of pickups, vans and cars with a replacement value of $32 million and an average age of six years. The balance of the vehicle class is composed of small equipment, such as trailers, mowers, compressors and generators with a replacement cost of $14 million and an average age of 10 years. The expected life of a light vehicle is seven years based on American Public Works Association (APWA) industry standards. When selecting vehicles for condition assessment, vehicles are ranked by age and usage. Expected usage of 140,000 kilometres is used for the light fleet. Small equipment is usually replaced on an “as required” basis. The annual steady state funding is $6 million. The City does not receive subsidy for light vehicles. There is a vehicle replacement backlog of 497 vehicles with a value of $16 million or three years of steady state funding for light vehicles.


DOCUMENT 2

VEHICLE REPLACEMENT PROCESS

 

Definitions

 

Steady State Replacement Model, this refers to an optimal fleet state in which vehicles in each class are evenly distributed over their age and usage range. Vehicles are replaced at their expected life and usage and this optimizes their fleet costs.

 

Maintenance costs, this is the amount spent on parts, labour and contract work for all corrective and preventative maintenance on a vehicle.

 

Vehicle replacement backlog, this is the number and value of vehicles which have exceeded their expected lives. The size of the backlog indicates how many vehicles need to be replaced to obtain a cost effective fleet.

 

Replacement Process

Planning

 

The objective of vehicle replacement planning is to match equipment replacement needs to operational needs while minimizing the acquisition time from budget approval to equipment delivery in a cost effective manner. Given the vehicle replacement backlog, the replacement process prioritizes vehicle classes and ranks those vehicles within each vehicle class that generate the best benefit by being replaced (i.e. replace the worst first and get the most for your money).

 

Prioritization by Vehicle Class

 

Due to capital rationing, the vehicle replacement envelope is often not sufficient and must be reallocated to reflect the priority of programs by vehicle class. Subsidized programs are generally fully funded to minimize the total fleet cost to the City and maximize the return for money spent. Program vehicles, such as emergency response and specialized winter maintenance fleet, take priority over non-program vehicles.

 

Consequence of in service failure, difficulty and time to replace (acquisition lead time and/or leasing availability), condition of fleet and cost of aging are considered when prioritizing among vehicle classes. As a result, vehicle classes in order of priority are generally as follows: paramedic, fire, heavy, and light fleets.

 

Vehicle Selection Criteria

 

To ensure that vehicles are replaced in the right priority, Fleet Services performs an annual planning cycle (Document 3) as detailed below that commences one year in advance of the budget year. Initially during January vehicles are ranked within their vehicle class for replacement based on age, usage and maintenance cost by the Technical Services Division. Vehicles are not automatically replaced when they reach either their expected life or their expected usage. During February, March and April, this vehicle list is reviewed by the Maintenance Divisions to confirm overall condition and adjustments to the plan are made.  Client departments are consulted during May and June to ensure their operational plans and capability development and the vehicle replacement plan are harmonized.  By July the Fleet replacement plan is ready to feed the Capital Budget process.  Work on the 2009 replacement plan started in January of 2008.

 

Procurement Strategy

 

After the replacement plan has been finalized with clients, the Technical Services Division, based on the operational requirements of the user develops vehicle specifications. The operating department is responsible to determine the capability requirement and Fleet Services is responsible to prepare a vehicle specification to meet that requirement in a cost effective manner. For replacement vehicles, the intent is to replace like capability with like capability, taking into account operational requirements and changes in technology. If the capability requirement increases, approval is required. The standard vehicle specification is for a base model in each category. Options are added depending on specific application, or as a result of departmental request with justification and authorization.  Some options are not ordered but come as part of a standard manufacturer vehicle package. If client vehicle options are not supported by Fleet Services, approval is required. Once the budget is approved, Supply Management acquires vehicles to Fleet Services’ vehicle specifications. The process is open and inclusive of businesses that are able to supply vehicles in accordance with the vehicle specifications. Delays in any of these procurement stages impacts directly on the ultimate delivery to the customer and service delivery to the public.

 

Fleet Services prepares lease/rent/buy analyses and business cases when advising customers on the best procurement method and also provides operating cost information. Fleet Services conducts comparative procurement by consulting with other municipalities and the federal government to ensure best value.

 

Similar vehicle requirements are combined and standardized into single contracts. Multi-year contracting of vehicle acquisitions helps to reduce administration and generates standardization. Multi-year contracting and grouping of similar vehicles on contracts has resulted in savings in parts procurement and training of operators and mechanics.

 

Procurement Timelines

 

Replacement plan flexibility is important. Vehicle procurement processes can take from 12 to 24 months for vehicles. Even light vehicles can take up to 12 months or more if manufacturer build-out dates are not met. These timelines cause many challenges for clients trying to deliver growth services. Expected delivery times from issuing requests for proposals (RFP) are:

 

            Ambulance                               8 months

            Fire trucks                                18 months

            Snowplough salt spreaders        15 months

 

As such, a lot can change in this period of time. Often, many of the planned vehicles have their replacement deferred. Vehicles that fail before planned replacement, or which are damaged due to accidents or incidents are funded from these capital programs at the expense of the scheduled programs.

DOCUMENT 3

REPLACEMENT PLANNING CYCLE

 

Technical Review Completed (Technical Services Division)

 

Replacement Plan Drafted including Prioritization

 
 

 

 

 

 

 

Condition Assessments (Maintenance Divisions)

 

Replacement Plan Amended

 
 

 

 

 

 

 

Client Review

 

 Replacement Plan Finalized by June 30

 

 
 

 

 

 

 

Fleet Services’ inputs to Client growth projects

Business cases developed

Lease/buy analysis

Operating budget impact

 

CSEDC replacement report drafted

 
 

 

 

 

 

 

 

 

 

 

Replacement Report to CSEDC

 
 

 

 

 

Capital Budget Submission

 

Vehicle specifications updated

 

Request For Proposals (RFP) drafted

 
 

 

 

 

 

 



            2009 MUNICIPAL FLEET REPLACEMENT PLAN

PLAN DE REMPLACEMENT DU PARC AUTOMOBILE MUNICIPAL DE 2009

ACS2008-PWS-FLT-0003                                   city-wide / À l’Échelle de la ville

 

Responding to a question from Councillor Wilkinson with respect to replacement vehicles, Mr. Ken Wetzel, Acting Director of Fleet Services, confirmed that 100% of the costs came out of the vehicle replacement fund, which was funded from the contributions from each vehicle in the fleet. 

 

Councillor Wilkinson referred to comments in the report with respect to the age of vehicles and the cost of maintenance as these got older.  She recognized that maintenance costs could be higher but suggested these were still cheaper than buying.  She wondered if this was taken into account because she felt the report was suggesting that vehicles were not being replaced soon enough.  Mr. Wetzel stated that in the report, staff gave some examples of maintenance costs for vehicles that were beyond their life cycle.  He indicated the report showed a representation of the kinds of maintenance cost increases that were incurred for older vehicles.  He submitted that life cycling was established in order to minimize all costs associated with a vehicle over its life.

 

Councillor Wilkinson noted that not all vehicles were the same and she wondered if staff looked at a vehicle’s characteristics to determine if it could be retained for another year or two without too high a maintenance cost or whether vehicles were automatically replaced when they reached the end of their expected life cycle.  Mr. Wetzel indicated that every unit was inspected prior to being replaced.  He referenced an appendix to the report, which identified the annual cycle whereby a condition assessment was conducted on each vehicle staff was looking to replace within a period of time.

 

Councillor Wilkinson indicated she had understood that a report would be coming forward soon with respect to standardizing vehicle purchases and she inquired on same.  Mr. Kirkpatrick believed the Councillor’s question related to the procurement savings report, which would be coming forward in October.

 

Responding to follow-up questions, Mr. Kirkpatrick confirmed that the referenced report would speak to standardization and what potential life cycle savings there would be by doing this.  With respect to standardizing vehicle specifications, Mr. Kirkpatrick submitted that the City would be procuring to the standards required to do the job.  He suggested that there was a trade-off in terms of trying to become as standardized as possible and covering-off as many of the functionalities of vehicles as were required.

 

Adding to this, Mr. John Manconi, Director of Surface Operations, indicated that Mr. Wetzel and his team had been very aggressive in doing some standardization.  For example, he indicated the City had phased-out the use of Sport Utility Vehicles (SUVs) in Surface Operations and discontinued four-by-fours, with the exception of areas where staff had proven that there were off-road applications and needs.  He indicated they had also downsized their pick-up trucks and had started using smaller units, with the balance being rotated through the fleet to optimize their use.  He re-iterated that a lot of work had been done in this respect and this work was on-going.  He offered to follow-up with the Councillor directly should she want additional information in this regard.

 

Responding to a question from Mayor O’Brien, Mr. Wetzel indicated the report recommendation had been carefully worded by Legal Services and he confirmed that it did not bind Committee or Council to proceed with these acquisitions; that it was all subject to the budget approval process.

 

Mayor O’Brien believed everyone understood the need to have replacement vehicles.  However, he wondered if there had been any analysis of whether the City could do without some of these vehicles.  He referenced the size of the fleet and suggested that, based on some preliminary information, it seemed slightly disproportionate to what other municipalities had on a per capita basis.  Therefore, he asked if staff had any specific data on what the City of Ottawa spent, in terms of number of vehicles, compared to other municipalities.  Mr. Wetzel indicated staff had not recently done any specific analysis of this nature.  However, speaking to the process followed with respect to vehicle requirements, he reported that there had been reductions in some areas – either where programs were no longer required or some efficiencies realized.  Going back to the issue of standardization, he submitted that through standardization on a particular type of vehicle, one could often reduce the over-all size of the fleet.  He indicated this had occurred. 

 

Mayor O’Brien talked about wanting to challenge the underlying specification for the vehicle, which he felt would be a best practice.  He submitted that with fuel prices and other things involved, Committee and Council would want to make sure staff had done a fairly significant due diligence on the purchase process.  He suggested first asking the question of whether the City actually needed a particular vehicle and what would happen if it was not purchased.  He indicated he did not want fleet replacement to become an automatic process.

 

Moving on to the issue of vehicle life, Mayor O’Brien asked if a specific condition assessment had been undertaken on some of the more expensive vehicles to determine if their life could be extended beyond what was normally expected in order to delay replacement.  Mr. Wetzel confirmed that each year, staff went through a cycle whereby equipment was inspected and that extension of life did occur.  He explained that when a vehicle approached a certain window, either based on usage or age, a condition inspection was conducted and, if it was in good condition, it was retained.  Further, with respect to higher-priced equipment, staff identified opportunities to overhaul in order to extend a piece of equipment’s useful life.

 

Councillor El-Chantiry noted that some vehicles were legislated by the Province in terms of how long they could be kept in operation.  He referenced ambulances as an example, noting that their replacement cycle was based solely on age and did not consider condition or mileage.  Mr. Wetzel confirmed that this was the case.

 

The Councillor wondered if the Province had been asked to review this, noting that today’s vehicles were different from those of 10 or 15 years ago.  Mr. Wetzel was not aware of any recent review being undertaken but indicated he would ask the question. 

 

Responding to questions from Councillor El-Chantiry with respect to the replacement program for heavy equipment, Mr. Manconi confirmed that although significant progress had been made on other elements of the fleet, there remained a significant backlog with respect to the heavy fleet.  He explained that with some of the standardization, the City was seeing some consistency in equipment so that there could be redeployment.  He indicated staff was looking at options in terms of leasing but he submitted that there were some trade-offs, which would need to be discussed.  He noted that providers were looking for longer term leases because the transaction needed to be beneficial to them.

 

In response to a question from Councillor Brooks, Mr. Wetzel indicated he did not know, off the top of his head, how many half-ton trucks the City owned and/or leased.  However, as a result of questions raised at other Committees, staff would be providing a memo to members of Council identifying exactly this information. 

 

Mayor O’Brien wondered if staff was familiar with the fleet management process of the City of Winnipeg.  Mr. Manconi indicated Mr. Wetzel had undertaken a branch review of Fleet Services and that the City of Winnipeg had been part of the challenge team.  Therefore, staff was very familiar with the Winnipeg model. 

 

Responding to questions from Councillor Desroches, Mr. Manconi re-iterated that all vehicle purchases were subject to the budget review process.  He confirmed that in some cases, there would be corresponding staffing requests, which would also be subject to the budget review process.  With respect to the procurement process, Mr. Wetzel indicated this was the same process as had been used for the past several years.

 

That the Corporate Services and Economic Development Committee recommend Council:

 

1.   Receive, for information, the proposed 2009 Vehicle & Equipment Replacement Plan; and

 

2.   Waive the requirement of section 6. (1) of the City’s Purchasing By-law for “appropriate accounts within Council approved estimates” to permit the commencement of the procurement process for vehicles and equipment in advance of the approval of the 2009 Budget scheduled for December 2008, with the stipulation that the procurement document contain the necessary clause to advise prospective bidders that any contract award will be subject to approval by Council of the budgetary funding.

 

                                                                                                CARRIED