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Home My WebLink AboutTR-87-96 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON REPORT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE File# �� l Date: MONDAY, NOVEMBER 4, 1996 Res. #_L201-0 " 115 S-1/6 Report#: TR-8 7-9 6 File#: By-Law# Subject: TENDER CL96-21 LEASING OF ONE 1997 COMPACT SIZE PASSENGER VEHICLE Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1 . THAT Report TR-87-96 be received; 2 . THAT Tender CL96-21, Leasing of one 1997 Compact Size Passenger Vehicle be cancelled. i BACKGROUND AND COMMENT: On July 8, 1996, Council approved report TR-57-96 which authorized staff to issue a tender for the leasing of a mid-size passenger vehicle . Report TR-57-96 was a result of TR-32-96 Employee Mileage Expenses being referred back to staff for additional information. A copy of both reports are attached marked Schedule "A" and Subsequently, Tender CL96-21 was issued with the following bids being submitted: LBIDDERS : -� Ontario Motor Sales Cowan Pontiac LEASE COST $427 . 12/mth x 36 $351 . 79/mth x 36 (Including GST & months = $15, 376 . 32 months = $12 , 664 . 44 PST) BUYOUT PRICE $7, 336 . 00 $10, 100 . 75 TOTAL LEASE COST $22, 712 . 32 $22, 765 . 19 COST/KM, Excess of . 04�/km . 05�/km KM Allowance PAPE�RD RE-LE A "'✓✓✓ ] THGBP NTE00N REGY-D PAPER �l TR-87-96 PAGE 2 TENDER CL96-21 Based on the prices submitted, the total annual cost to lease a vehicle, including maintenance is as follows : LEASE (Including GST, PST & GST Rebate) $4, 991 . 75 ANNUAL MISC. OPERATING COSTS $1, 700 . 00 $6 , 691 . 75 As indicated in Report TR-32-96, the largest single annual claim for mileage is $6, 336 . 24, which is approximately 6% lower than the annual cost to lease a vehicle . Also, as suggested in Report TR- 32-96, alternatively Council may wish to consider the option of setting up a car pool, whereby one or more vehicles are available for employee use while on Municipal business . However, due to conflicting situations as well as various other implications or concerns of the Public Works Department, such as storage of the vehicles, this alternative may not be practical . It is therefore recommended that Tender CL96-21, Leasing of one 1997 Compact Size Passenger Vehicle, be cancelled. A second alternative to reduce the total expenditure for employee mileage is to take advantage of the Ontario Management Board Secretariat Corporate Travel Program. This program provides for rental of a mid size car for $38 . 00 per day, unlimited mileage . For employees who are occasionally required to travel into Toronto or further, this would provide a lower cost than to reimburse them for mileage . However, the one disadvantage is that the vehicle must be picked up in Oshawa and therefore may also not always be practical . A third alternative is that where possible employees utilize existing Public Works vehicles to attend out of town functions . � I � TR-87-96 PAGE 3 TENDER CL96-21 Therefore, in an effort to keep employee mileage to a minimum, it is recommended that each Department identify any potential areas and address in the most efficient manner and that the alternatives identified in the body of the report be utilized where appropriate . Respectfully submitted, Reviewed by, i arano, H.BSc . ,AMCT. , W.H. Stockwell, Treasurer Chief Administrative Officer Step A. Vokes, P.Eng. Director of Public Works MM*LB*ce 812 SCHEDULE "A" THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON REPORT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE File# Date: TUESDAY, JULY 2, 1996 Res. # Report#: TR-5 7-96 File #: By-Law# Subject: EMPLOYEE MILEAGE EXPENSES - PURCHASE/LEASE VEHICLES Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report TR-57-96 be received; 2 . THAT Public Works staff prepare tender specifications for leasing of a mid-size vehicle; 3 . THAT staff be authorized to issue a tender call; and 3 . THAT a subsequent report with staff recommendations identifying actual lease cost and associated maintenance costs, compared to current expenditures for mileage, be forwarded to Council for approval . BACKGROUND AND COMMENT: At a meeting held on April 29, 1996, Council passed the following resolution: "THAT Report TR-32-96 be referred back to the Treasurer for further review of the leasing costs of a vehicle to be used on a pooled basis and for review of block funding as used by the Regional Health Department . " The Block funding as used by the Regional Health Department is a reimbursement of travel expense by an assigned category based on a flat rate allowance . This type of arrangement is included in their CUPS Union Agreement and varies somewhat with each Local . An example is as follows : i .rEA ®AE.aE 813 N.s srn,rrrEO Cer�cvc�orarEn REPORT NO. : TR-57-96 PAGE 2 EMPLOYEE MILEAGE EXPENSES PURCHASE/LEASE VEHICLES <2nth..:::.:::.:::::::::::::: 1, 000 to 5, 000 $159 . 00 5, 001 to 8, 000 $228 . 00 8, 001 to 12, 000 $350 . 00 12, 001 to 16, 000 $437 . 00 . 16, 001 to 20, 000 $559 . 00 Note : Under 1000, a casual rate of 35 .3�/km would apply The amount to be travelled annually is estimated and the employee is accordingly put into one of the above categories . There are also provisions for annual payout at the casual rate of 35 . 3�/km . for any kilometres driven over the maximum of the category as well as employee payback should the kilometres be under the minimum amount . In addition, if at least 3 , 500 km annually are not driven, the reimbursement becomes a taxable benefit . This program has been in place since approximately 1974 and was initially set up to cover not only travel reimbursement but the cost of additional Insurance required by the employee while on Regional business . One of the major disadvantages of this plan is that employees that are at the lower end of any category are paid more for travel expense than if they were paid per kilometre travelled. Example, under this plan, an employee in category 2 that travels 5, 002 km would be paid $2, 736 .00 annually, however if calculated under per kilometre basis at 35 .3�/km, would be paid $1, 765 . 71 . A second disadvantage is that this type of program is administratively complex, with paybacks, reimbursements, taxable benefits (where applicable) and changing of positions or categories all being factors . X14 REPORT NO. : TR-57-96 PAGE 3 EMPLOYEE MILEAGE EXPENSES PURCHASE/LEASE VEHICLES Based on the 1995 Total Mileage Expenditure for Municipality of Clarington employees, the breakdown is as follows : ::::::::::.:. .::. Yep;;::�'�;�.:;;.;; �.:�,;e�g�::;::»:>:::::>::::: under 1, 000 620 1, 000 to 5, 000 260 5, 001 to 8, 000 20 8, 001 to 12 , 000 50 12, 001 to 16, 000 40 16, 001 to 20, 000 10 Should Council wish to consider a similar plan, it would be necessary to negotiate the arrangement with the Union. With respect to leasing a vehicle, it is recommended that, in order to obtain accurate, competitive pricing that a tender be issued. As various other implications such as maintenance and storage of the vehicle must be considered, it is further recommended that Public Works staff prepare the tender specifications, provide subsequent analysis of the bids submitted, and assist in the preparation of a subsequent report to Council comparing actual lease/maintenance costs with current expenditures for employee mileage reimbursement . � 1 � SCHEDULE "B" THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON REPORT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE File# Date: MONDAY, APRIL 22, 1996 Res. # Report#: TR-3 2-9 6 File #: By-Law# Subject: EMPLOYEE MILEAGE EXPENSES - PURCHASE/LEASE VEHICLES Recommendations: it is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1 . THAT Report TR-32-96 be received for information; and 2 . THAT Council consider the lease of one vehicle on a trial basis to be used as a pooled vehicle . BACKGROUND AND COMMENT As part of the annual budget process, a review has been conducted of the total annual expenditure paid to employees who utilize their personal vehicles for Municipal business . In accordance with the Union Collective Agreements and the Municipality' s Social Contract obligations, the 1995 mileage rates paid were as follows : • .30 cents per kilometre up to 5000 kilometres 0 . 34 cents per kilometre + 5000 kilometres . Note, effective April 1, 1996, the rate of . 34 cents per kilometre applies regardless of the total kilometres travelled in accordance with the pre social contract conditions . i As a potential cost saving measure, staff have done some preliminary investigation, with respect to leasing or purchasing of vehicles for staff use, while on Municipal business, 1Tersus the PAPER ®RE�.«E 817 11166 PRIII RCN RECYC 0PAPER REPORT NO. : TR-32-96 PAGE 2 EMPLOYEE MILEAGE EXPENSES - PURCHASE/LEASE VEHICLES current method of paying the employee mileage to use their personal vehicle . The approximate associated costs for each of these alternatives are identified as follows : MISCELLANEOUS OPERATING COSTS Maintenance $ 100 . 00 Safety Inspections $ 100 . 00 Washing Vehicle $ 200 . 00 Fuel $1, 000 . 00 Insurance $ 300 . 00 TOTAL ANNUAL MISC. OPERATING COSTS $1,700 . 00 ANNUAL LEASE COST Yearly cost (includes G.S .T. $5, 100 . 00 rebate) based on 36 month lease and list price of $15, 000 . 00 (mid- size vehicle) Plus Annual Misc . Operating Costs $1, 700 . 00_F 11TOTAL ANNUAL LEASE COST $6, 800 . 00 LEASE VS PURCHASE COMPARISON Total Lease Price $ 5, 100 . 00 x 3 yrs. $15, 300 . 00 +7, 350 . 00 Residual value_F_ITOTAL LEASE PRICE $22, 650 . 00 TOTAL PURCHASE PRICE $15, 000 . 00 * Residual Value is lease buy-out at 36 months which is 49a of list price i 818 J ' REPORT NO. : TR-32-96 EMPLOYEE MILEAGE EXPENSES - PAGE 3 PURCHASE/LEASE VEHICLES The largest claim is for the By-law Officer in the amount of $6, 135 .24 . This amount translated into 1996 dollars is $6,336 .24, which is approximately 7% lower than the annual cost to lease a vehicle. The other significant claims relate to the four building/plumbing inspectors at an average of $4, 250 . 00 each. Alternatively, Council may want to consider the option of setting 'up a car pool, whereby one or more vehicles are available for employee use while on Municipal business . The building/plumbing inspectors are generally in separate areas of the Municipality daily, consequently, it may not be productive to operate on pooled vehicle arrangement for them alone. One vehicle for shared used between the Parking Enforcement Officer and Building Inspectors may be worth while on a trial basis. This vehicle could be available for sign out as required or be assigned on a regular schedule, whichever method is practical and economically efficient . Further investigation of this alternative would be required by the Public Works Department, as various other implications must be considered, ie : storage of vehicles . Respectfully submitted, Reviewed by, arie Marano H.B Sc. ,AMCT. , W.H. Stockwell, Treasurer Chief Administrative Officer MM*LB*ld I f 819