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.
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
SUBJECT:
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OBJET :
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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.
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.
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.
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.
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 |
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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 |
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 |
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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 |
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$134,387 |
68% |
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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) |
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Vehicle Class |
Quantity |
Expected Life |
Average Age Dec-31-2008 |
Vehicles > Expected Life |
Vehicle Replacement Backlog |
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# |
Years |
Years |
# |
$,000 |
Years |
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|
|
|
|
|
|
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 |
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|
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Total |
2,263 |
|
7 |
724 |
$59,425 |
3.9 |
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 |
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Vehicle Class |
Steady State Model |
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LRFP3 Requirement |
2009 Funding Envelope |
Average Retirement Age |
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# |
$,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 |
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|
|
|
|
|
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Municipal |
267 |
$22,200 |
|
301 |
$23,046 |
172 |
$15,333 |
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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.
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 |
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Vehicle Class |
Vehicle Example |
Expected Life |
Actual Life |
Maintenance Costs |
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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 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.
The Strategic Objectives addressed in this report include:
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.
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).
There has been no public consultation regarding this item, as this is an internal process.
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.
Document 1 – Fleet Vehicle Classes
Document 2 – Vehicle Replacement Process
Document 3 – Replacement Planning Cycle
Fleet Services Branch will implement the 2009 Vehicle & Equipment Replacement Plan in accordance with the 2009 Capital Budget authority approved by Council.
DOCUMENT 1
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
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
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).
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.
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.
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.
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