Kneehill County council pre-approved $4.5 million in vehicle purchases as staff explained the municipality’s efforts to deal with serious supply chain problems. The decision was made at the Nov. 15 regular meeting of council.
Councillors heard a presentation from Director of Infrastructure Mike Ziehr requesting $4.5 million from the county’s capital equipment replacement reserve to purchase many new vehicles needed by the municipality complicated by the serious delays Kneehill County is facing to obtain them.
“Administration is requesting a pre-authorization to purchase specific capital equipment and vehicles prior to the interim budget being approved,” stated Ziehr’s memo.
“The equipment and vehicles have been scheduled for procurement based on the lifecycle replacement strategy which considers the initial costs, repair and maintenance costs as well as the expected disposal revenue.”
Ziehr’s memo listed the following vehicles: four three-quarter ton pick-up trucks, one half-ton pick-up truck, one highway tractor truck, one super B gravel trailer, one end dump gravel trailer, three 160M Caterpillar motor graders, one 14M Caterpillar motor grader, one fire engine (joint purchase with Town of Three Hills) and two community peace officer vehicles.
County Chief Administrative Officer CAO) Mike Haugen stated the $4.5 million price tag is a block amount, meaning the exact prices of each individual vehicle may not be presently known, but the total cost of everything listed will be under the total pre-authorized amount.
Ziehr stated supply chain delays are crushingly bad in some cases: some of the equipment on the list isn’t expected to be delivered before the fourth quarter of 2024.
“It is extensive delays on here,” said Ziehr.
He noted some of the current equipment is nearing the limit of its lifespan and the county wants to ensure the older vehicles still have resale value.
On the bright side, he reported he’s been told the Caterpillar equipment will be held at its current price despite delivery delays.
During discussion, he pointed out the 160M graders are 4X4 models that best fit Kneehill’s needs.
Coun. Faye McGhee pointed out the vehicle replacement was planned ahead of time and she was glad to see extra effort exerted to secure the best deals for Kneehill County.
Coun. Carrie Fobes noted the Caterpillars appeared to be quoted by Finning; she asked if any other dealers were approached as she’d heard Finning’s has serious supply chain problems.
Ziehr noted Kneehill County uses several methods for obtaining offers and all are in line with the trade agreement but are not always open bid.
Ziehr added that some details like warranty have yet to be ironed out.
Fobes asked if the county has ever considered leasing, to which Ziehr responded yes, the idea has been investigated but when the numbers were crunched leasing didn’t seem to come out in Kneehill’s favour; he pointed out issues such as equipment modifications and repairs.
Fobes stated she had a ratepayer question, specifically a concern from three ratepayers who apparently saw a Kneehill County pick-up truck leaving the municipality at about 5 p.m. and wished to know why that was occurring.
The CAO answered by saying some vehicles in that situation may be on-call and some employees take vehicles as a taxable benefit.
Coun. Laura Lee Machell-Cunningham asked how elected councillors have a say in the vehicle replacement programs, adding she gets questions from ratepayers about all the brand-new trucks county staff are driving.
The CAO responded Kneehill County has benchmarks for vehicle replacement such as keeping them when they’re under warranty and not running a vehicle into the ground so it has little resale value.
Haugen stated councillors would see vehicle replacements in the budgeting process and within five and ten-year capital plans.
Haugen also reiterated the large pre-approval was being done to address supply chain delays.
Machell-Cunningham asked how old equipment is disposed of. Ziehr answered several different methods are used, including auctions and closed tender, to get the best return.
Haugen pointed out Kneehill County may price and advertise a vehicle locally to give neighbouring municipalities a chance to buy it if they wish.
Councillors unanimously approved spending up to $4,500,000 from the capital equipment replacement reserve to fund the purchase of the equipment and vehicles listed above.
Local Journalism Initiative reporter