5.5. SR 05-12-2008 - Laserfiche WebLink

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Item # 5.5. ver MEMORANDUM TO: Mayor and City Council FROM: Tim Simon, Fleet Committee Member DATE: May 12, 2008 SUBJECT: Equipment Replacement Fund Establishment of an Equipment Replacement fund to work in conjunction with the Fleet Committee will provide a fund where money will be accrued fox future vehicle purchases. The fund balance inside the Equipment Replacement (Internal Service Fund) will allow for significant year to year differences in capital replacement without significant impact on the General Fund. Also the interest earnings and auction proceeds will stay within the fund to help cash flow future purchases. 'The Equipment Replacement fund will pay fox the purchase of equipment, and equipment users (i.e. departments) pays the fund back a pxo- xated share of the purchases over the next 10 years, plus a surcharge (if necessary) to keep a positive cash flow. If the fund requires additional capitalization, the use of a surcharge will be necessary. The Fleet Committee has produced a set of replacement parameters that make sense fox the City's fleet and projected ten-year mplacement plan. Each piece of equipment will be scheduled fox replacement based upon its projected life and use, but evill not actually be replaced until its age, mechanical condition, and need warrant it as determined by the Fleet Committee. The Fleet Committee group will examine the replacement plan annually, evaluating each vehicle fox replacement in the current cycle. Once the Fleet Convnittee has detextnuied the current year replacements, they will work with fmance to ensure enough cash flow exists in the equipment replacement fund to replace all items, if not a priority rate will be established and lowest priority will need to be wait-listed until cmxent year costs on all items and amounts are determined. If funds axe not available the priority rating of the item will be higher the next year. Any capital purchases used for enterprise purposes will be funded from enterprise funds.