To: Honorable Mayor and Members of City Council
From: Julie Lucido, Public Works Director
Prepared By: Matthew Price, Maintenance Superintendent
TITLE:
Title
Fleet Equipment Replacement and Upgrade Reserve Fund Allocation
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RECOMMENDED ACTION:
Recommendation
Approve a budget adjustment in the Fleet Fund increasing the expenditure budget by $100,000 as documented in Council Budget Amendment No. 23P10.
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DISCUSSION:
According to fiscal policy, the City has established two reserves for fleet. The Fleet Operating Reserve with a current balance of $100,000 and the Fleet Equipment Replacement and Upgrade Reserve with a current balance of $150,000. These funds were generated to sustain fleet operations.
The primary purpose of the Fleet Operating Reserve is to provide temporary resources in the event of higher than anticipated fleet operating costs and the primary purpose of the Fleet Equipment Replacement and Upgrade Reserve is to cover costs associated with the replacement of specialized tools and fleet facility/vehicle equipment. The use of these reserve funds must be approved by City Council.
This request is to utilize $100,000 from the Fleet Equipment Replacement and Upgrade Reserve to purchase new equipment and software to support the efficiency and effectiveness of the Fleet Management Program. The budget transfer will provide for
1. Mobile lifts for usage in and around the shop. The current lifts are manufactured by an overseas company with unreliable and limited maintenance support and availability. The new lifts will have the necessary maintenance and sustainment capability within the local area. The City’s old lifts will be auctioned for sale in accordance with City policies.
2. Diagnostic equipment and software purchase for the Fleet Maintenance shop to improve the level of diagnostics capability. The diagnostics equipment will provide operational and financial efficiencies. Currently, all heavy equipment is sent to local vendors for diagnostics. Providing our employees with the opportunity to diagnose in-house will eliminate unnecessary logistical and program costs.
FINANCIAL IMPACTS:
The attached Council Budget Amendment No. 23P10 would increase the expenditure budget for the Fleet Fund’s SB Fleet Management Admin (61030900) by $100,000 to purchase the equipment and software. $100,000 of the Fleet Equipment Replacement and Upgrade Reserve balance of $150,000 will be used to fund the increase to the FY23 operating budget, leaving $50,000 in the Fleet Equipment Replacement and Upgrade Reserve balance. Fleet will collect additional funding from City Departments in future years to replenish the Fleet Equipment Replacement and Upgrade Reserve. In the FY 2023/24 and FY 2024/25 budget cycle, an additional $50,000 will be added to the Fleet Operations and Maintenance calculation for each fiscal year in order to replenish the reserve. This will increase the costs for all City funds/departments with Fleet vehicles.
CEQA:
The Public Works Director has determined that the Recommended Action described in this Agenda Report is not subject to CEQA, pursuant to CEQA Guidelines Section 15060(c).
DOCUMENTS ATTACHED:
ATCH 1 - Council Budget Amendment No. 23P10
NOTIFICATION:
None.