The Resort Municipality of Whistler (RMOW) continues to look at new ways to reduce the cost of its operating vehicle fleet, highlighted by a report presented to council Tuesday (Dec. 18).
“A fleet of this size and complexity requires a management approach that optimizes financial value,” said the municipal manager of environmental operations Michael Day, who presented the report to council.
The municipality’s fleet consists of 170 pieces of equipment that range from pickup trucks to ice re-surfacers. All vehicles are purchased new by the RMOW before eventually being liquidated, if possible, at an optimal pricing point. The town spent almost $1 million in vehicle acquisition in 2012.
The RMOWs vehicle replacement and re-sale strategy came under fire in July when a member of the public questioned whether Municipal Hall was replacing vehicles too quickly and selling them at below-market prices.
In Tuesday’s report, Day outlined the municipal strategy in determining when a vehicle should be replaced, which he said was “largely driven by the (vehicle’s) decline in resale value and the increase in maintenance costs.”
Ideally, the muni wants to find the sweet spot in a vehicle’s lifespan: after its initial value has declined, and before its maintenance costs start to rise as the equipment gets older.
“The likely lifespan of a piece of equipment is set when the equipment is initially purchased, but that does not mean that at the end of that period of time, which is typically six to eight years, that we will somehow automatically replace that equipment. That isn’t how it works,” said Day. “Replacement is always contingent on the actual financial and operating history of the vehicle, as well, of course, as to departmental need.”
A dozen vehicles that were scheduled for replacement after this year will be deferred until the end of 2013, according to the report.
Through Nov. 30, the RMOW has recovered just over $143,000 from liquidated vehicles this year and four that didn’t sell in 2011, below its forecast of $162,000. With the five additional vehicles that have been tendered since then, however, the muni expects to be close to its predicted liquidation numbers by the end of the year.
Departments also pay a yearly fee to use vehicles in order to recoup the capital costs of initially purchasing the equipment, minus its expected resale or rental value.
“We’re reviewing these policies to see if we can make the cost to departments more consistent, which will help their planning,” said Day, citing fluctuating market rental costs for vehicles as one of the reasons it’s difficult to set a more stable departmental pricing strategy.
Coun. Roger McCarthy suggested tracking fleet vehicles more closely to determine if operating costs are being stretched by what he called “avoidable damages,” like poor maintenance measures or vehicles idling unnecessarily.
Day said a pilot project was initiated this year that placed tracking equipment in select vehicles to measure gas consumption, idle time and speed trends. He added that the initiative would be most effective if it was providing real-time data to the driver, which the current tracking equipment is unable to do. Municipal staff is looking at ways to expand this pilot project in the future.
The RMOW’s fleet travelled over 908,000 km in 2012, spending more than $428,000 on gas, down from $469,000 the year before.
Mayor Nancy Wilhelm-Morden asked if staff has looked at reducing the overall size of the town’s fleet.
“The cost associated with the fleet is significant on an annual basis,” she said. “I think the right analysis as far as (vehicle) replacement and maintenance and that kind of thing has taken place, but if you stand back and look at the size of the fleet, maybe that’s some place where we could reduce cost.”
Day said staff looked at the 20 most costly vehicles in the RMOW fleet, but determined they were necessary for municipal operations. He added that a more detailed study looking at other costly vehicles in the fleet is expected in the new year.