Mayor Carrie Tergin's draft 2016 budget includes a number of changes from the 2015 budget, but one that may prove to be a point of debate in ongoing budget discussion is the leasing of six police vehicles and one command vehicle for the Fire Department.
Tergin's draft budget includes a total of $209,787 for leasing seven vehicles. Tergin said she would prefer to purchase the vehicles outright, but that's just not possible considering the amount of vehicles that need to be replaced. (Her draft budget does include the purchase of two police vehicles.)
"I think it makes more sense if we can purchase," Tergin said. "If we want to keep a good turnover of vehicles ... we need to find a routine to make sure that we are replacing (vehicles)."
Throughout the past two years, city officials and staff have been discussing the issue of an aging city fleet and how deferred maintenance on the vehicles has begun to stack up. A letter from Tergin to the council detailing some of the major changes in her draft budget states, "there is a projected estimated funding gap of $300,000 for buildings and $900,000 for vehicles and equipment annually for the general fund."
Tergin said the city has been reactive instead of proactive when it comes to vehicle replacements, something that's going to have to change moving forward. Also, she said, all the vehicles being replaced have more than 100,000 miles on them and ongoing maintenance would be costly. Instead of spending that money fixing older models, she said it's better to begin the turnover process through leasing than continuing to count on short-term fixes.
"I would rather pay the interest and get the turnover happening than replace more at a later date," Tergin said.
City Administrator Steve Crowell said leasing simply spreads out the cost over time to allow the city to get more vehicles quicker.
"Leasing just spreads out that payment," Crowell said. "It really preserves some of our cash."
However, at least one council member has already voiced concerns on the issue.
At the first budget committee meeting last week, 2nd Ward Councilman Rick Mihalevich said he's most concerned about the vehicle replacement, noting leasing will tie the city's hands with debt.
"We have a huge fleet issue that we can't keep kicking that can down the road," Mihalevich said. "I have a few problems that I need to resolve myself."
Crowell said the council could opt not to lease the vehicles or to borrow money from another fund to pay for vehicle replacement, noting none of the options are bad, it's just a matter of preference. He said the important aspect of the leasing discussion is really to prompt a larger conversation with city officials about how to address the many capital equipment and vehicle needs.
"We wanted to prompt some discussion," Crowell said.
Related documents:
Proposed Jefferson City budget changes for 2016
Other articles in this series:
Pink sheets detail unfunded budget requests from city staff