Marion council explores leasing versus capital purchases

The Marion City Council directed City Administrator Roger Holter at its meeting Jan. 6 to make a cost analysis comparing the benefits of leasing capital purchases as opposed to purchasing those items.

?(Leasing) is a relatively new concept in government,? Holter said. ?Governments always operated under lease/purchase, and (lease/lease) will be a shift in this philosophy.?

Rather than looking at the budgeting process from year-to-year, he said, when going to a lease-to-lease program, it would require maintaining the budget on a five-year basis.

The idea of leasing was for discussion only, and not all the council members were sold on the plan.

Councilor Jerry Kline said the concept didn?t make sense to him.

?(Leasing) is pretty high rent, isn?t it?? he said. ?We pay that five years and then turn it in at zero?we get nothing??

Mayor Mary Olson asked if Holter has done any research on other cities leasing equipment.

?Newton and Pittsburg are two cities that have gone to a lease program,? he said. ?Both expressed being happy with it because of maintenance issues that go along with it.?

One example, Holter explained, was the E-3 unit, a support bucket truck, and recapping expenses.

?In Year 1, it would only cost $1,000, which is for normal maintenance and oil changes,? he said.

?By the time we get the equipment to the fifth year and beyond, we are spending $4,000 to $6,000 per piece of equipment.?

?I know we need to be safe,? Kline said, ?but it seems to me like this is a mighty expensive deal.?

Holter explained the unit has injector problems and has been into Webster?s for repair and also Wichita checked it.

?We are looking at $4,000 for injectors,? he said.

Olson asked if the lease would be on a case-by-case basis.

?Some of the equipment in our fleet is not to our advantage from the electrical department,? he said.

The street and alley department can purchase used equipment for the most part, but for an electrical department, it is a safety issue.

Councilor Todd Heitschmidt said the city hasn?t done a very good job with capital purchase or improvements for many years.

?That is why we have street issues and things that are folding over,? he said. ?So maybe this is a gentle push to get some of that to happen.?

Heitschmidt added that from the capital purchase part, the city is locked into certain companies.

?Speaking selfishly, and sticking up for all three banks,? he said, ?a lease-lease program requires financing by a leasing company?not a local bank.?

Tax dollars are going out of town from a capital purchase, Heitschmidt said.

Although the city has gotten a lot of the life out of its capital purchases at 5 cents on the dollar, Heitschmidt also said it could have 50 cents on the dollar.

?But that is up to the administration to get that on a plan, which we haven?t,? he said. ?All of a sudden we have all these issues with equipment and we have to start somewhere.?

Holter plans to bring the matter back when he completes the cost analysis.

Expensive errand vehicle

In addition to talking about leasing, Kline asked if city employees are using bucket trucks to run errands.

?Should we buy pickups (for this purpose)?? he said.

Holter said department supervisors have been told their employees need to stop this practice.

?If (an employee) is not going to a site to use (the bucket truck), then they should be using one of the three trucks,? Holter said

?Are we fully compliant at this point?? he asked. ?I cannot say that we are, but we will continue to monitor that.?

Holter said it is the same way with all large equipment. If employees are running errands to pick up parts or other items, it should not be in the city?s heavy equipment.

?I do ask that if any of you have incidents (seeing employees using heavier equipment), please let me know so I can address it in a timely manner,? he said.

Expensive errand vehicle

Fire Chief Mike Regnier requested an increase of $5 compensation for each volunteer firefighter per fire based on participation.

?The rate is not about being true compensation for the firefighter?s time, it is about recognizing their unselfish commitment to serve their fellow citizens when needed,? Regnier said.

?I think this is a gesture of support from the council to our firefighters.?

Olson asked Regnier how many volunteers respond to fires.

For a grass fire, he said, the number is usually between six and eight people.

Holter said that on the high side the salary paid out yearly is about $3,600, but the most money expended was $6,100.

?The budget is $12,000, and we have not gone over that,? he said.

The council voted four in favor of raising the compensation rate from $10 to $15 per run. Councilor Chris Meierhoff abstained.

In other business, the council:

? accepted the resignation of Angela Lange as city clerk and planning commission secretary effective Jan. 1.

? appointed Holter to replace Lange as the Freedom of Information officer.

? accepted the Kansas Department of Transportation agreement for U.S. Highway 56 and U.S. Route 77 for the roundabout.

? heard a presentation regarding curb and gutter priorities this year. Marty Fredrickson, street supervisor, was commended for his work in preparing this comprehensive long-term approach.

? tabled discussion regarding electrical transmission rates.

? learned from Police Chief Tyler Mermis that the department?s newest K-9 officer, Legion, made his first stop with Officer Mike Stone, handler. The two of them made a traffic stop netting $350 in cash forfeiture and an undisclosed amount of marijuana.

The incident was on U.S. Highway 56 near Marion.

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