Recording in progress.

Well, good afternoon.

This Wednesday, July 22nd, 2026.

It is four o'clock in order gathering for the finance committee meeting of the South and Road City Council.

Madam Cork, would you please take role to establish quorum?

Mayor present.

Iceman Venos Walton.

Councilmember AEI.

Present.

After each agenda item is presented, the mayor will ask for committee member comments and then take public comment.

You'll have two minutes for your comment.

The cabinet camera will appear for the convenience of the speaker and attendees.

Okay.

Good afternoon.

Can we do that?

Yeah, thank you.

Okay.

Good afternoon, Mayor and committee members.

The item before you this afternoon is an update on the city's efforts around its fleet fund policy and continue an analysis for appropriate funding models.

So we did want to provide a little bit of background on where the city's been with its fleet.

It is something that is of high importance on the finance department and organization as a whole.

A significant number of our fleet is related to public safety and public works with an emphasis on ensuring that we provide core services to our community.

It's vital that we have the appropriate fleet to support those efforts.

And so in August of 2024, the city did complete a study with Baker Tilly.

It took an inventory of the city's fleet and looked at its current policy and made some recommendations at that time.

And that work was done by A Mays and Incorporated, and we completed the initial work with both the study and recommended policy changes in April 2026.

So over the last couple of months, we spent some time looking at the uh the funding forecast tool that was developed, policy recommendations, as well as ensuring that the inventory that we have on file is complete and accurate.

And so that brings us to this meeting today to talk about some of the initial uh steps we would like to take to continue our efforts to build a sustainable fleet uh fund.

So one is make sure that we are under the same uh understanding about what a fleet fund is and why it's important.

A fleet fund is an internal service fund, an internal service fund is a fund to account for centralized services that is provided by city departments, and in this case we have a number of uh vehicles that support city uh city services, so public safety, police, fire, with public works.

We also have non-public, so we do have public work inspector vehicles.

We also have some recreation uh vehicles.

We also have equipment, so it's not solely uh a fund that is for vehicles like trucks and cars, but also equipment that we operate as well within the public works department in particular.

So why is it important to have a fleet fund?

Um it promotes cost recovery by charging departments the actual cost of the vehicle, including any maintenance and fuel and replacement costs.

It provides sustainable vehicle replacement funding by collecting replacement costs over the cost or two over the useful life of the vehicle or equipment.

Um, and so then it in result uh will reduce the number of large one-time capital uh requests uh to support those roots expense.

It promotes um consistent replacement schedules before maintenance costs become exorbitant.

Um, and then also it minimizes the potential for disruption to the city in providing its core services to the community.

So we've talked a little bit over the last year about fleet replacement challenges and funding needs.

So there's there's a couple of components that um we look at.

One is that the city has ongoing fleet replacement needs a significant portion of those to support the city's efforts in providing core services, so public safety, public works, and public health.

The fleet includes city fleet, police fleet, fire fleet, and city equipment.

So any type of city equipment that we have, bucket trucks, things like that, those are also part of what we look at when we're looking at our full inventory of our fleet and equipment.

We have ongoing procurement challenges as it relates to maintaining those operational needs for our fleet.

For example, the fleet fire fleet, there is estimated lead time of anywhere from four to five years.

So from the moment that we purchase the vehicle to when we actually receive it and outfit it, and it is back on the road for service.

So that is not necessarily incumbent on any practices that the city does.

It just happens to be the amount of time it takes the vendor to fully build and outfit a fire vehicle apparatus and deliver to the customer.

And then another component is our funding challenges.

So we as a city and similar jurisdictions are all facing budgetary challenges and how we balance providing those core services and creating a sustainable general fund and long-term fiscal sustainability while also supporting and making sure that we are funding infrastructure and assets in a way that allows us to provide those services to the community.

Historic practice of been deferred fleet replacement.

So as the city has experienced financial budgetary challenges in past years, it has balanced it by deferring replacement of vehicles and equipment.

What I will state is that is not a uncommon practice that agencies, there are other agencies that are experiencing the same type of budgetary, and oftentimes will look to ways to reduce the contribution from the general fund to the fleet by either extending the life of the fleet and then therefore extending the life of the replacement costs.

That has its pluses and its minuses.

But as a vehicle ages, there are more things that go wrong with a vehicle.

So there are some challenges with that as well.

The other piece is that historically the fleet fund or equipment fund has been underfunded for future replacements.

So why a sustainable fleet is needed.

Again, I've said it a couple of times during this presentation, but maintaining a reliable fleet to ensure uninterrupted delivery of essential city and public safety services.