City of Platteville Common Council to Take Action on Enterprise Fleet Management Proposal

PLATTEVILLE, WI (January 8, 2020) – Part of the City of Platteville 2021-2023 Strategic Plan is to continue to be fiscally responsible with taxpayer resources. In 2020, City staff were approached by representatives from Enterprise Fleet Management with opportunities for leasing portions of the City of Platteville vehicle fleet and introducing potential long term cost savings with regular vehicle replacement. 

The City currently budgets for vehicles when they absolutely need replacing.  Vehicles are put into the Capital Improvement Plan (CIP) based on the necessity of replacement.  The City has not established a depreciation fund or developed standing budget capacity in its CIP to ensure vehicles are rotated out after a useful life is met. 70% of the current light and medium duty fleet is over 10 years old, with the oldest vehicle in the City fleet is approaching 23 years. 

The City of Platteville plans to either develop standing budget capacity to purchase vehicles on a rational basis or have budget capacity for leasing vehicles. City staff feels that the consultantship and services Enterprise would provide as our purchase and sale agent is a huge asset in selling these vehicles at the most opportune time (buy low, sell high), and thus, lowering lifecycle ownership versus what we experience today in holding on to vehicles for as long as possible. 

A summary of benefits staff feels the City of Platteville would receive in a leasing model are the following: 

• A consistent annual budget for vehicle replacement - more proactive versus reactionary. 
• Newer vehicles will increase employee safety and satisfaction. 
• Financial savings due to fuel economy on newer vs. older vehicles. 
• Financial savings due to less maintenance/repair costs-City mechanic can spend more time performing repairs on larger vehicles/equipment that is costly to have performed externally, and the City, over time, absolves itself on larger repairs on older vehicles it owns. 

The cost for this program can be adjusted to account for the total dollar value represented within the City’s Operating and Water/Sewer Capital Improvement Plan Budgets (CIP).  Within the 2021 Capital Improvement Budget is $77,000 to cover the replacement of two vehicles and the replacement of a dump truck box.  City staff have been working with Enterprise to review the potential of utilizing that same amount of money, in turn to lease 13 vehicles.  One advantage to this program is the ability to work around the City of Platteville’s Budget restrictions.  The end goal is to have a consistent replacement fund to ensure the vehicles being utilized are providing the best service for our residents.  Ultimately, if the City is faced with increased budget restrictions, the program allows a reduction in the number of leased vehicles to be swapped out in any given year.

By partnering with Enterprise Fleet Management, the City of Platteville would be better able to leverage its buying power, implement a tighter controlled resale program to lower total cost of ownership and in turn minimize operational spend.  Leveraging an open-ended lease maximizes cash flow and recognizes equity from vehicles sold creating an internal replacement fund. Furthermore, the City of Platteville would leverage Enterprise Fleet Management’s ability to sell vehicles at an average of 114% above Black Book value. By shifting from reactively replacing inoperable vehicles to proactively planning vehicle purchases, the City of Platteville would have a much more sustainable and predictable budget moving forward.  

City staff reached out to other municipalities that utilize the program (the City of Manitowoc and the City of Oak Creek) who both stated that the relationship with Enterprise Fleet Management has been exceptionally good and expressed the fact that Enterprise Fleet management acting as the buying/selling consultant has been extremely beneficial.  The City also reached out to the Highway Commissioner for Grant County who indicated they are still analyzing the program but noted that it did help the county get three new crew-cab pickups and fit the cost into their existing budget.  

The City of Platteville Common Council will take action on the Enterprise Fleet Management proposal at the Tuesday, January 12 meeting.  For more information, click on Enterprise Fleet Management under ACTION: https://www.platteville.org/sites/default/files/fileattachments/common_council/meeting/packets/53155/01-12-21_relinked_council_packet.pdf