5.5. SR 05-12-2008 - Laserfiche WebLink

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Item # 5_5. MEMORANDUM TO: City Council FROM: Lori Johnson, City Administrator DATE: May 12, 2008 SUBJECT: Equipment Replacement Fund The Fleet Committee was charged with several tasks and goals when it was re-established last year. One of the goals was to develop a policy that establishes guidelines fox replacement and useful life of vehicles and equipment and puts in place mechanisms to improve purchasing and budgeting. The attached City Vehicle Acquisition and Replacement Policy accomplishes that goal. Along with that policy, we axe proposing that the Council consider establishing an Equipment Replacement Fund. This funding method would help reduce the volatility in budgeting fox capital purchases. The City Vehicle Acquisition and Replacement Policy will be used by the Fleet Committee as the Committee annually reviews equipment and vehicle requests. Based on the criteria in the policy, the Committee will recommend to me the equipment and vehicles to be included in the proposed budget. Phis approach will help to ensure that the highest priority needs axe funded and that, whenever possible, equipment is shared among various departments. All of the purchases would be funded by the Equipment Replacement Fund if the Council approves its establishment. After an initial transfer to start the fund, annual revenue would come from re-payment from departments fox their purchases and from a portion of Elk River Municipal Utilities' contribution (three percent of Elk River electric sales). The purchases, share of ERMU conuibudon, repayment from the General Fund, and other revenue sources would still be reviewed annually and approved by the Council during the budget process. Of course, the annual amount to be spent on equipment each yeas and the funding sources axe always up to Council discretion. Finally, several members of the Fleet Committee will be present at Monday's meeting to go over the proposed policy and Finance Director Tim Simon will explain the Equipment Replacement Fund in more detail. The members of the Committee axe Mark Thompson, Bob Rupxecht, Bill Nlaertz, Bruce West, Bxad Rolfe, Tim Simon, and Gary Leirmoe.