Funding

Mich. City Expands Vehicle Lease Program

December 20, 2016

The lease plan includes 14 2017 Chevrolet Malibu sedans. Photo courtesy of GM
The lease plan includes 14 2017 Chevrolet Malibu sedans. Photo courtesy of GM

The City of Kalamazoo, Mich., has decided to expand its vehicle leasing program after the City Commission approved a five-year $952,476 lease to replace 35 vehicles, MLive reported.

Staff evaluated the age, condition, cost of maintenance, and fuel efficiency of its existing light-duty fleet and selected 35 of the worst existing vehicles for replacement, according to the commission agenda report. The departments of Public Safety, Community Planning and Development, Public Services, and Parks and Recreation will receive the new Chevrolet and GMC vehicles.

The city has traditionally purchased light-duty vehicles with cash, but “this strategy does not work well during periods of fiscal stress and budget cutbacks,” the agenda report stated. Due to this, the city has fallen behind on vehicle replacements, resulting in an aged fleet that is expensive to maintain and operate.

City staff determined that fleet leasing is “at worst cost neutral as compared to the status quo approach.” In fact, leasing combined with proper timing of fleet disposal “could lead to substantial financial benefits to the city,” according to the agenda report.

This is phase 2 of the city’s vehicle leasing plan — in July, the City Commission approved the lease of six vehicles in a pilot leasing program. The lease with Enterprise Fleet Management includes all maintenance.

Meanwhile, city staff has organized a team to study the most cost-effective and mission-critical way to replace and manage fleet going forward. 

Comments

  1. 1. Juston Lafler [ December 21, 2016 @ 11:42AM ]

    $952,000 for 35 vehicles is $27.2K per vehicle. A typical sedan Govt. pricing off any good coop should be between $17-18K that leaves $9-10.2K for maintenance in 5 years (with a warranty). The standard oil change should only cost $30 (total cost $450 over 3 per year for 5 years) maintenance in 5 years would consist of tires, a brake job and possibly a battery. So I'll over estimate at $2k per vehicle. Looks like they over paid by a minimum of $7K per vehicle or $245K. To maintain 35 sedans you would only need about half a mechanics time to maintain.

    What am I missing?

 

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