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10. 2011 MUNICIPAL VEHICLE AND EQUIPMENT CAPITAL
REPLACEMENT PLAN PLAN DE REMPLACEMENT DES VÉHICULES ET DE
L’ÉQUIPEMENT POUR 2011 |
That Council consider this report.
Recommandation MODIFé du ComitÉ
Que le Conseil
examine le présent rapport.
DOCUMENTATION
1.
Deputy
City Manager’s, City Operations’ report dated 26 July 2010
(ACS2010-COS-DCM-0005).
2.
Extract
of Draft Minutes dated 17 August 2010.
Corporate Services & Economic Development Committee
Comité des services organisationnels et du développement économique
and Council / et au Conseil
17 August 2010 / 17 août 2010
Submitted by/Soumis par :
Steve Kanellakos, Deputy City
Manager/Directeur municipal adjoint
City Operations/Opérations municipales
Contact
Person/Personne resource:
John
Manconi, General Manager/directeur générale, Public
Works/Travaux publics
(613)
580-2424 x 21110, john.manconi@ottawa.ca
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Ref N°: ACS2010-COS-PWS-0010 |
SUBJECT: 2011 MUNICIPAL
VEHICLE AND EQUIPMENT CAPITAL
REPLACEMENT PLAN
OBJET: PLAN DE REMPLACEMENT
DES VÉHICULES ET DE L’ÉQUIPMENT
POUR 2011
REPORT
RECOMMENDATIONS
That
the Corporate Services and Economic Development Committee recommend Council:
1. Approve
the proposed $18,936,000 2011 Municipal Vehicle and Equipment Capital
Replacement Plan outlined in this report for consideration as part of the draft
2011 Capital Budget;
2. Authorize
Fleet Services and Supply Management to issue requests for proposals and requests
for tenders for the estimated $18,936,000 as outlined in the 2011 Municipal
Vehicle and Equipment Capital Replacement Plan;
1.
Authorize Fleet Services and Supply
Management in 2010 to award contracts emanating from the 2011 Municipal Vehicle
and Equipment Capital Replacement Plan up to a limit of $3,000,000, resulting
in savings in the estimated amount of $125,000, with the $3,000,000 drawn from
the Corporate Fleet Reserve to permit the procurement of vehicles and equipment
in advance of approval of the 2011 budget.
RECOMMENDATIONS
DU RAPPORT
Que le Comité des
services organisationnels et du développement économique recommande au
Conseil :
1. d’approuver le Plan proposé de
remplacement des véhicules et de l’équipement municipaux pour 2011, d’un montant
de 18 936 000 $, présenté dans ce
rapport aux fins d’examen et faisant partie du budget d’immobilisations
préliminaire de 2011;
2. d’autoriser
les Services du parc automobile et Gestion de l’approvisionnement d’émettre une
demande de propositions et un appel d’offres pour le montant estimé de 18 936 000 $,
tel que décrit dans le Plan de remplacement des véhicules
et de l’équipement municipaux pour 2011;
3. d’autoriser les Services du parc
automobile et Gestion de l’approvisionnement d’octroyer en 2010 des contrats
émanant du Plan de remplacement des véhicules et de l’équipement municipaux pour
2011, à hauteur de 3 000 000 $ puisés dans le fonds de réserve du parc
automobile municipal, et ce, afin de permettre l’achat de véhicules et
d’équipement avant l’approbation du budget de 2011.
BACKGROUND
In January 2005, Council approved Motion 27/139
directing staff to provide pre-budget reports in advance of the draft budget
for the purchase of any new growth or replacement vehicles and equipment.
The Fleet Services Branch prepares the annual Municipal
Vehicle and Equipment Capital Replacement Plan report on behalf of its clients,
based on client-identified requirements. As part of the replacement process, respective
client groups identify their replacement requirements and the Fleet Services
Branch prepares minimal vehicle specifications to meet the requirements in the
most cost effective way.
The
2011 Municipal Vehicle and Equipment Capital 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.
The
authority, requested in this report, to commit in 2010 a portion of the 2011
funds facilitates the timely provision of replacement units and will ensure
well-timed delivery while minimizing associated transition costs.
DISCUSSION
As
noted above, the 2011 Municipal Vehicle and Equipment Capital Replacement Plan
includes capital projects for four major operational vehicle classes. The breakdown of how the 2011 funding envelope
will be deployed is described below in Table 1 by vehicle class.
Table 1 – Breakdown of 2011 Funding Envelope by Vehicle Class
|
Vehicle Class |
2011 Funding Envelope |
|
|
$000 |
|
Paramedic |
2,307 |
|
Fire |
5,769 |
|
Heavy |
7,940 |
|
Light |
2,920 |
|
Municipal Total |
18,936 |
Award Contracts from 2011 Capital Budget In
2010
In keeping with the above discussion regarding
the importance of ordering equipment in time for it to meet the operational
needs, there is also a financial benefit to ordering equipment sooner rather
than later.
As part of the 2009 budget approval process,
Council approved Fleet Services and Supply Management to issue contract awards
in 2009 for vehicle acquisitions planned for 2010. The result was not only that operational
units were more able to bring Council approved objectives in service and on
time, but Fleet Services was able to save over $100,000 in operating costs.
This savings was made possible because in 2009
Fleet Services was able to order vehicles scheduled for replacement in
2010. This resulted in the new vehicles
going into service in early 2010 and freeing up the older light fleet to
support the heavy summer operating demands across the City (i.e. grass cutting,
parks maintenance, etc.). As a result, Fleet Services was able to avoid
costly summer rentals by re-deploying the older 2009 replaced light fleet,
which will be disposed of at the end of the summer season. The expected savings for 2011 is $125,000 as
the same process will be followed and more vehicles will be available to
replace expensive rental units.
The
ability to commit in 2010 a portion of the 2011 funds facilitates the timely
provision of replacement units by enabling Fleet Services to meet build-out
dates, to reduce reliance on expensive rental units as stop-gaps and to ensure
well-timed delivery of vehicles and equipment while minimizing associated
transition costs.
It is therefore recommended that Fleet Services
and Supply Management be authorized to award contracts in 2010 emanating from
the 2011 Municipal Vehicle and Equipment Capital Replacement Plan up to a limit
of $3,000,000.
RURAL IMPLICATIONS
There are no rural implications as the result
of implanting the recommendations contained within this report.
CONSULTATION
Fleet Services had consulted with Financial
Services and Supply Management regarding the recommendations contained within
this report.
COMMENTS BY THE WARD COUNCILLOR(S)
This is a City-wide report.
LEGAL/RISK MANAGEMENT IMPLICATIONS
There are no legal/risk management impediments
to implementing any of the recommendations in this report.
Approval
of these recommendations involves commercial agreements that would bind a
subsequent Council as the procurement process envisioned deals with the 2011 budget
year. However, a 2000 Supreme Court decision has found that a municipal
council can bind future councils with respect to contracts of a commercial
and/or business nature that do not fetter the legislative authority of a future
Council. As such, staff from Legal Services, as well as Supply
Management, should be involved in the drafting of conditions to be included in
the RFP to address this issue.
CITY STRATEGIC PLAN
There are no implications to the City Strategic
Plan as a result of implementing the recommendations contained in this report.
TECHNICAL IMPLICATIONS
There are no technical implications to
implementing the recommendations in this report.
FINANCIAL IMPLICATIONS
If approved a transfer from the Corporate Fleet
Reserve of $3,000,000 will be undertaken. The current uncommitted available balance is $7.83M.
SUPPORTING DOCUMENTATION
N/A
DISPOSITION
Upon
approval of this report, the Public Works Department - Fleet Services Branch
will implement the recommendations outlined in this report.
2011 MUNICIPAL VEHICLE AND EQUIPMENT CAPITAL
REPLACEMENT PLAN
PLAN DE REMPLACEMENT DES VÉHICULES ET DE
L’ÉQUIPEMENT POUR 2011
ACS2010-COS-PWS-0010 CITY
WIDE/À L'ÉCHELLE DE LA VILLE
Councillor Bloess began his line of questioning by asking why there was a need to advance $3 million from the reserve fund if payments are not due until 2011. Mona Monkman, Acting Treasurer explained that the $3 million would allow staff to order the vehicles and issue a purchase order for delivery in January 2011. With this being an election year, she noted that the budget approval would be delayed until March or April. In response to a follow up question by the Councillor, Ms. Monkman explained that the other $18 million is subject to Council approval during the 2011 budget.
In terms of how staff determine what vehicles are needed, Yvan Lupien, Manager, Fleet Services advised that each vehicle in the fleet is assessed and staff select the best candidates that need replacing.
In response to a question from Councillor Monette, Mr. Lupien explained that approval of this report ($3 million) is a pre-commitment, which would allow staff to go forward with those contracts in 2011.
Councillor Deans commented on the lack of information and detail in the staff report, noting that it is unclear as to what is needed in terms of vehicles. Mr. Lupien explained that in previous years, staff have come forward with the same requests. He explained the rationale being that it provides staff the liberty to replace vehicles with new ones at the right time. By being able to move part of the program forward, staff are able to find efficiencies by ordering new vehicles before the old ones no longer work. This is just part of the manufacturing process.
Councillor Deans interjected, asking why staff did not demonstrate the need to outline in the report what the City was buying, rationalizing the need and time requirements required. Steve Kanellakos, Deputy City Manager, City Operations explained that this was only part of the fleet that is a component of the life cycle plans that are typically part of the budget process. He offered to submit more detail on the capital listing to Committee and Council.
Chair Jellett confirmed that staff would provide this information prior to the next Council in order to allow Council members to have a more fulsome debate on August 25th. He added that he would also like more information on the efficiencies with the pre-commitment and how much savings is anticipated.
In reference to a past motion stated by Councillor El-Chantiry, Mr. Kanellakos explained that that motion was pertaining to growth vehicles. The vehicles requested in this report are replacements vehicles for the ones that need replacing, and he indicated that if production dates are missed, it ends up costing more money in the end. In response to a follow up question from the Councillor regarding timelines, Mr. Kanellakos assured that if this report proceeded to Council with the requested information, the timelines would still be met.
Councillor Desroches recollected that a full core press is conducted during the budget process where Councillors question the need for ‘X’ number of vehicles and, although he understood the rationale for putting this request in place at this time, he wondered if a discussion should take place at this time as opposed to during the budget debate. Mr. Kanellakos said that the pre-commitment was only for this portion of the fleet replacement cycle and the issue is that the 2011 budget will only be approved at a later date, which would result in missing the timelines. He added typically Fleet Services prepares a business review of the optimal time to trade in and dispose of vehicles based on mapping their operating costs against the life of the vehicle. Staff are maximizing efficiencies by disposing of vehicles at the most opportune time. Committee can do the review if it chooses, but the review is subject to the entire business case, which he did not recall Committee ever doing that in the past. He reminded Committee that staff was not asking to increase the size of the fleet; rather it is to replace existing vehicles that are delivering the services on a daily basis. Mr. Kanellakos concluded that by not approving a vehicle that is currently in service and extending the life cycle, the costs would increase over time due to the utilization rate of that vehicle, which would then take service off the street and result in affecting service standards. He suggested that this process may be more appropriate at the next term of Council as part of reviewing the service standards.
Councillor Deans explained that constituents see new vehicles on the street and call their Councillors to complain. She reiterated that before writing a blank cheque for a new fleet replacement, Councillors need to have some rationale in order to relay this information to the residents.
Mr. Kanellakos stated the fact that Council would be in lame duck as of September 10th, therefore, staff would have to provide the requested information prior to the next Council meeting. Rick O’Connor, City Clerk and Solicitor agreed that referring this report to Council with the direction to staff to provide the appropriate information would be the proper process to follow. Should there be any ‘hiccups’ at Council, the report can be deferred to September 8th, which would allow two more weeks of discussion before reaching lame duck.
Moved by D. Deans,
That the Corporate Services and
Economic Development Committee refer this report to Council without
recommendations.
CARRIED
DIRECTION TO STAFF:
That Public Works
staff provide supplementary information prior to the Council meeting.