Three New Garbage Trucks Come In Over Budget

The City is going to get a shiny new fleet of garbage trucks but the big questions circulated around the Council table were why was it not tendered and exactly how much is in the Engineering Department control equipment account?

In making a request to access the funding from the Engineering Department’s control equipment account City Engineer Josh Mickelborough said approval was needed to access an additional $190,000 to purchase three new garbage trucks.

The trucks are being purchased because the City’s present garbage truck fleet is reaching its useful life span. The three new trucks were originally approved to be purchased in 2017 for 990,000 but are now approximately $190,000 over budget and will cost $1,179,331.62.

“We are over budget on these so we issued an RFP (Request For Proposal) on December 5, 2018 for the purchase of three trucks. We received proposals and have selected a supplier of the trucks and are seeking Council’s approval,” Mickelborough stated.

A Request For Proposal (RFP) is where a document is issued and a good or service is requested from a selected number of firms. A tender is where bids are solicited publicly and any firm qualifying may make a bid to provide the goods or service.

The “equipment control account does have sufficient funds to cover the tender,” Mickelborough told Council.

Councillor Scott McMann questioned about the amounts held in the equipment control accounts or reserve accounts as he had made inquiries previously and been told there was not significant funds in them.

“I believe I was told it is not significant. To me $190,000 in just this one purchase is fairly significant. So how much is in the Engineering Department’s control account? Do you have that information?” Councillor McMann asked.

Finance Director Brian Acker replied there was $700,000 in the account and it was not significant considering the equipment slated to be purchased.

“I believe there is approximately $700,000 in the Engineering Department’s control account. That may sound like a significant amount of money but obviously in this case we need about $190,000 for this particular purchase. I believe as well the Engineering Department is looking at the addition of substantial equipment to the fleet,” Acker stated.

“Even though it may sound like a lot of money when you have $700,000 in your control account, when you look at acquiring new equipment it certainly does not amount to that (a lot).”

Councillor McMann questioned if new equipment was purchased from the control account to which Acker said that was correct.

“The control account is for instances like this when we don’t have enough accumulated depreciation and certainly the purchase of new equipment we have not set aside money in the past would come out of the control account,” Acker stated.

Moose Jaw has a reserve system where when a piece of equipment is purchased money is deposited into a specified account to help pay for the piece of equipment when it reaches it useful age and is replaced.

Councillor Chris Warren questioned why an RFP and not a tender was used for the purchase of the three new garbage trucks.

“In this case it is just a variety of mechanisms that can be used and it is just getting one that is best suited to our operation in this case,” Mickelborough stated.

Councillor Warren pressed on the issue on how the units were purchased.

“I don’t have the purchasing policy in front of me but I thought whenever possible we are suppose to be using a tendering process. Why wouldn’t the tendering process have been adequate for this one?” he asked.

“That’s a good question, a fair question,” Mickelborough responded, adding “In this case there is a wide range of people that could probably meet the specifications and several different ways to get there…we are trying to get a unit with good warranty, standardized, reliable, good for parts and proven technology.”

“For warranties that is pretty simple to build into the tender. So is this bid was it the lowest RFP?” Councillor Warren asked with Mickelborough replying it was.

Councillor Brian Swanson echoed Council Warren’s concerns.

“I still have concerns going to an RFP on something like a garbage truck,” Councillor Swanson stated.

Councillor Swanson then went on to ask questions along the same lines as asked by Councillor McMann.

“I would have appreciated the details of the equipment control account just to make sure there is enough money in the account…it would be interesting to get this in context of what Mister Acker is saying is there some large scale equipment purchases coming up?”

“When we are asked to spend over $190,000 over the budgeted price I would just ask the report would include the details of the source of the extra money and a statement on the account,” Councillor Swanson said.

Councillor Dawn Luhning asked why the new garbage truck fleet was approved for 2017 why is it just being purchased now?

“Why so long until we do these purchases? Is there any rationale?” Councillor Luhning asked.

Mickelborough replied there were some internal delays getting the tenders out due to the decisions around rear lane collection.

“It fell through the cracks a bit but we were sorting out our garbage in 2017 and making sure we were getting the right fleet to provide service,” Mickelborough stated.

Council approved the new fleet as requested.

For many Council meetings the issue of converting to curb side garbage collection dogged Council as hours were spent debating the issue. After a partial conversion in the 2018 budget an attempt was made to finalize the conversion of the entire city. At the end of it all the entire curb side initiative was dumped and garbage collection reverted back to the way it was before the proposal first came up in the 2017 budget.

moose jawFebruary 27, 2019Comment