Leasing

Rockford, Ill., Considering Fleet Leasing Plan

December 08, 2011

ROCKFORD, IL – The City of Rockford, Ill., is considering a four-year plan to replace its fleet through leasing. The City created the leasing plan after conducting an outsourcing study with accounting and advisory firm Baker Tilly. The plan would reduce the fleet’s size by 21 percent, from 590 vehicles to 462.

“The plan would be executed in a number of pieces, as the optimal approach varies depending on the type of equipment,” said Carrie Eklund, the City’s Central Services Manager/Interim Finance Director. “We anticipate separate contracts for fire apparatus, heavy equipment, squad cars, and the balance of the fleet. The intention is to test the market to determine the best approach for each type. We will also investigate options for including maintenance on each vehicle class, and will determine options for joint purchasing when appropriate as well.”

One of the main benefits is a reduction in maintenance costs over a four-year period. According to the City, those involved in developing the plan don’t expect significant maintenance reductions in the first year of the program but do expect maintenance costs to drop by $1.1 million permanently.

In addition, the City expects to be able to avoid significant unbudgeted emergency repairs. Another benefit would include a reduction in the amount of fuel used, due to replacing older vehicles with newer, more fuel-efficient ones. One consideration that the current plan noted was a $200,000 grant the Rockford fire department received from the State of Illinois for capital purchases. The fire department can use the grant funds to offset expenses related to fire apparatus as part of the leasing plan.

According to Eklund, the City can adapt the leasing plan based on the funding level Rockford’s City Council determines. The lease agreements would be for payments in arrears, so the City wouldn’t have to make initial payments until 2013.

One segment of the City’s fleet left out of the plan is Human Services, due to the fact that the majority of their fleet purchases are subject to specific grant rules.

The Rockford City Council has yet to approve the leasing plan, but as specific analysis on vehicles classes and the options available is completed, through the bid/RFP process, specific recommendations will be put back to Council to approve with the goal of replacing 94 vehicles in 2012. According to Eklund, the City Council will likely vote on the plan in January of next year.

By Greg Basich

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