From left, Don Baker, maintenance technician; Mike Shullenberg, equipment service specialist, and John Culley, senior maintenance technician, work on a dump truck in Everett, Wash. Due to improved maintenance, the average age of these trucks rose from 6.55 years in 2001 to 8.5 years in 2005. Photo: City of Everett, Wash.
DeRousse's fleet consists of 800 pieces of rolling stock—dump trucks, sedans, even transit buses—used by the city of approximately 100,000 people. The city employs 14 technicians and operates about 20 service bays in three buildings.
Another reason fleet managers recommend buying over leasing is that private sector interest is simply an added expense. Plus, the debt incurred in leasing equipment impacts the city's municipal bond rating. A city could be forced to pay higher interest rates for money in the bond market, if it has extensive debt on the books. “Just a small slide upward in interest rates could cost the city a lot of money in interest dollars,” says John McCorkhill, director of fleet services in Lynchburg, Va.POINT/COUNTER-POINT
Leasing advocates argue that owning is an outdated business model that leads to over-aged equipment and reliance on skilled technicians that are in ever-shorter supply. Lease the equipment—this argument holds—turn it over, and keep your fleet up to date. Outsource the maintenance.
Not a good idea, say fleet managers.
“This technician shortage thing is overblown,” says McCorkhill. He contends that cities can offer technicians a number of benefits and job security to make the positions attractive. Cities need to publicize those benefits, make them available, and take care of their technicians.
Plus, maintenance agreements with leasing companies are expensive. Mc-Corkhill says when he arrived on the job at Lynchburg, the city had leases with maintenance included on some landfill equipment. “The maintenance was costing us an arm and a leg,” he says.
An analysis revealed that the city could do the maintenance itself for much less. Within two years, the city had dissolved the full-service leases.
— Brown is a freelance writer in Des Plaines, Ill.