COVINGTON - In an effort to save money and maintain a fleet of newer vehicles, the Covington City Council voted unanimously Monday night to enter a vehicle leasing program with Enterprise Fleet Management.
The council first heard the leasing proposal at its annual retreat, held on Jan. 29 at the Covington Municipal Airport. City Manager Leigh Anne Knight said the city has been looking at leasing programs for its fleet. She noted that in the past, the programs weren’t looked at as closely since the leasing companies were not able to provide public safety vehicles such as police cars and fire equipment, but they are now able to do so.
Knight said the city’s fleet is getting older and that the city cannot afford to replace vehicles as quickly as needed.
“The large majority of our vehicles are on their last legs,” she said. “We probably went for five or six years where if it wasn’t sitting on the side of the road and needing to go to the scrapyard, we didn’t replace it. We didn’t buy vehicles other than big vehicles and equipment-type vehicles, and a lot of those we bought at auction.
“We are now in this flux of having a lot of vehicles that are in desperate need of repair and we’re pushing them along,” Knight continued. “We had a couple of companies come and talk to us about this process and the benefit that they could bring to us. We asked you in the fall about it and you were in agreement for us to move ahead with a bidding process, so we did that.”
Finance Director Randy Smith added that the predicament the city is in really came into focus when they updated their inventory of vehicles.
“Repairs and maintenance of vehicles started jumping out when we were doing our budget reviews,” he said. “We did a complete inventory of all city vehicles, with odometer reading, year, make and model. There are a lot of vehicles over 10 years old and over 100,000 miles. We’re not only doing regular maintenance now, but we’re replacing drivetrains and engines and making major repairs. Those costs have really increased over the last 10 years, and that’s what made it really stick out to us.”
Staff sent out an RFP (Request For Proposal) and had responses from Enterprise and Acme Auto Leasing. After evaluating the RFPs on five different criteria, Smith said Enterprise had the better score in every area. Based on Enterprise’s proposed lease, Smith said the city could see a substantial savings.
“The conservative estimate is that the city could save approximately $750,000 over the next 10 years through lease payments as opposed to purchases of vehicles, and also the sales of the current vehicles that we would get rid of and replace with the leased vehicles,” he said. “The leased vehicles will be more fuel efficient, safer, and will probably have shorter down time.”
Enterprise representative Jabari Pride made a presentation to the council at the retreat. Pride noted that Enterprise has leasing agreements with 161 cities and counties nationwide, and within the last three months, the cities of Conyers, Roswell, and South Fulton have all entered into leasing agreements.
Pride stated that of Covington’s 171 vehicles, 24 percent (46 vehicles) are over 10 years old. He said at the city’s current rate of acquisition, it would take 13 years to completely replace the fleet, and that through the leasing program, they could do that in four years.
“We’ve come up with a funding mechanism to take the budget that you already have and do more with that budget,” he said. “It will be an open-ended lease with flexible financing… For the entire time that you have that leased vehicle, you’ll know exactly what you’re paying for the vehicle, you’ll know exactly what you’re paying for the maintenance, regardless of what happens. Transmission is covered, engine is covered, whatever happens is covered. The only variable is the cost of fuel.”
Under the program, Enterprise will also assist the city in selling its old vehicles, with the money from the sales going into city coffers.
Council member Susie Keck asked where the maintenance on the vehicles will be done.
Pride said they will work with local mechanics.
“If you’ve been using shops within the city, you’ll keep using those shops,” he said. “Enterprise has an office in Covington and we get our vehicles here handled by shops in the city. It is the same thing with you. We negotiate the rates with the shops.
“As far as buying vehicles, if you’re buying from within the city, we’ll keep buying from within the city.”
Mayor Ronnie Johnston asked if the vehicles will have GPS trackers on them so the city can keep track of mileage and location of the vehicles.
Pride said they can do that for an additional cost.
Knight noted that the city already has tracking devices on its vehicles and that the city can use the money being paid for the current system to pay for the Enterprise tracking.
At the meeting Monday night, Anthony Henderson made a motion to approve the leasing agreement with Enterprise. Kenneth Morgan seconded the agreement, and it was approved by a 6-0 vote.