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HomeMy WebLinkAbout04.18.22 Work Session Minutes City of Farmington City Council Work Session Minutes April 18, 2022 1. Call to Order Mayor Hoyt called the work session to order at 5:00 p.m. Present: Hoyt, Bernhjelm, Lien, Wilson Absent: Porter Also Present: Lynn Gorski, City Administrator;Chris Regis, Finance Director;Gary Rutherford, Police Chief;Jim Constantineau, Deputy Police Chief;Justin Elvestad, Fire Chief; Adam Fischer, Fire Dept.; Kellee Omlid, Parks and Recreation Director; Peter Gilbertson, IT Director;Cynthia Muller,Administrative Assistant; Kara Hildreth, Reporter;Wong Nystrom, Enterprise Representative 2. Approve Agenda MOTION by Wilson, second by Lien to approve the agenda. APIF, MOTION CARRIED. 3. Discussion Items a. Police and Fire Fleet Leasing Presentation The police and fire departments are proposing to lease their fleet vehicles rather than purchasing them. Staff met with Enterprise to discuss converting the police and fire fleet from purchased/owned to leased and the cost savings. Enterprise Leasing is currently servicing 65 cities and counties in Minnesota. Enterprise would purchase vehicles to replace our current fleet, and the city would enter a four-year lease for each vehicle. Once those vehicles are road-ready, Enterprise would sell our current fleet and the city would receive the proceeds. At the end of the lease, the city would receive a replacement vehicle and Enterprise would sell the previous vehicle, with the equity in the vehicle being returned to the city. Advantages to leasing include: - Improved cash flow vs buying outright - Newer vehicles translate to higher gas mileage and less out-of-warranty repairs - Enterprise has significant buying power which would make it easier to get vehicles in a timely manner, which is something we have been dealing with for several years - Not having to deal with disposing of a vehicle after we take it out of service Mr. Wong Nystrom, Enterprise Leasing, explained the process. Vehicles would be cycled every four to five years. Currently the city has vehicles older than ten years. We would utilize an open end lease to acquire the right vehicle without a huge budget and get equity from selling the vehicle. Mr. Nystrom explained the timing of placing orders when vehicles are available. Vehicles would be sold on a closed end bid process with 300 dealers and brokers. Newer vehicles will provide lower operating cost and better fuel efficiency. In five years we would have 18 new City Council Work Session Minutes April 18,2022 Page 2 vehicles. The budget includes 12 vehicles in five years. We would be speeding up the time to refresh our fleet. A conservative savings estimate is $165,000. The fire department has seven vehicles and we could get six right away. This would be a savings of$57,900 over five years. Nothing changes with logos or the equipment inside the vehicles. The city would realize a short and long-term savings. We would never go over our budget. The technology in the vehicles would be up-to- date as the vehicle is their office. Leasing would keep the vehicles efficient. Councilmembers had several comments. Enterprise has the largest vehicle inventory. They would handle the timing of orders and will have a balanced, uniform approach. Any equipment is factored into the savings. If Enterprise cannot get a vehicle, the city would keep it longer and can pay it off. Enterprise handles vehicles with 32 GVW and lower. Councilmembers noted the 100% equity coming back to the city is huge. Police and fire vehicles are more expensive than what other departments are using. It feels front end heavy. Councilmembers asked what is the initial front end cost, how is this managed year to year, does the insurance change. Staff has contacted the insurance agent and other cities and Enterprise received a glowing review. There is no issue with the insurance cost. The front end cost is lower because we are paying a monthly fee per vehicle. When a vehicle is turned in, one is being sold. For any ordered vehicles that we haven't received yet, Enterprise will take over and lease it to us. Equipment will be reused from one vehicle to the next. We are fortunate to have the mechanics inhouse to do this work. Council asked if we will revamp how we purchase vehicles across the board. Staff noted we will budget the same way, but will be making payments rather than pay all at once. All vehicles come out of the same fund and we will continue to use that fund. If this works out, staff will look at leasing other city vehicles. It would be a big undertaking to do all 40 vehicles at once. b. Discuss Dakota County Leaving the Dakota Broadband Board Dakota County is planning to leave the Dakota Broadband Board (DBB). Cities are taking the position of what they want fiber to do and how much to pay for it. The county decided they are better off handling our fiber. The county would have to do individual JPA's with cities. Farmington has the third highest number of miles of fiber in the ground. The county board has not voted on this yet. The county would be taking over local control. Staff will bring this back in May. The broadband board meets again the first week in May. All aspects of the project would remain even with non-broadband members. The cost is based off a formula and we will receive that in mid-May. If done through LOGIS, there would be a 50/50 split. Currently the city pays$31,580 for our broadband membership. When the county separates,this cost will be determined through inhouse attorneys. The city would be eligible for grant funding, but we need someone to write the grants. City Council Work Session Minutes April 18,2022 Page 3 Council decided we have to wait to see what the county does. Commissioner Slavik voted to pull the county out of the DBB. Staff noted it is very early to make a decision on whether to stay with the county and LOGIS and share a contract. The DBB employee is housed in Farmington. Her status is yet to be determined. The DBB reserve is$400,000. Wages are paid through a quarterly distribution from the DBB. We would have to figure out her contract. The LOGIS contract is through July 2023, the budget is approved through the end of 2022. 4. Adjourn MOTION by Bernhjelm, second by Lien to adjourn at 6:05 p.m. APIF, MOTION CARRIED. Respectfully submitted, Cynthia ,MuCCer Cynthia Muller Administrative Assistant