Amherst vehicle capital reserves and budget deserve your support
The Amherst Ways & Means Committee’s strongest recommendation last year was to re-establish the Capital Improvements Plan Committee to provide a long-term view of the town’s needs and develop a plan for meeting them. This group of volunteers, under the guidance of Community Development Director Sarah Marchant, has revitalized this important community resource and provided our community a roadmap to improve and cost-effectively maintain our largest investments.
With the CIP in mind, this year’s W&M Committee continued to focus on funding analyses within each department, town-wide, long-term capital investments, and the strategic initiatives that were introduced this year through strategic planning. We found that the new budget process introduced this year by the Board of Selectmen allowed for ongoing dialogue and modifications along the way.
W&M unanimously supports the proposed operating budget because it reflects a prudent approach to funding ongoing operations and begins to implement a few of the strategic initiatives recently introduced by the Board of Selectmen.
In addition, we unanimously support, with special emphasis, the capital reserve warrants that will address the town’s uneven vehicle replacement schedules.
Amherst has been operating under a “default” budget – which is essentially the prior year’s budget with a few contractual adjustments – for the last two years. Because of reduced funding under the default budgets and the failure of past vehicle related capital reserve warrants, the town has been unable to execute its long-term fleet management plans. This imposed deviation from those plans is now costing the taxpayers more money.
The vehicle capital reserve warrants represent the minimum investment recommended by the CIP Committee this year. W&M feels that passing these warrants is crucial to establishing a methodical approach to managing the town’s fleet of safety-related vehicles.
The following is a brief description of the committee’s assessment of some of the more complex problems facing the town:
Most manufacturers recommend replacing their vehicles every seven years. W&M, however, agrees with the town’s goal of a 10-year cycle for its road equipment and snow plows. The additional depreciation between 7 and 10 years is not financially significant, and the anticipated repairs costs are typically acceptable. However, after 10 years, vehicle and equipment repair costs frequently exceed the 10-year life cycle replacement cost.
Although owning newer vehicles will never completely eliminate breakdowns or repair costs, they do possess several inherent advantages. New vehicles are historically more reliable, they are equipped with new safety and performance technology, and they are covered by the manufacturer’s warranty that pays the cost of most repairs. In short, a well-managed fleet composed of vehicles that are evenly spaced in age across their target life span minimizes total operational expenses, and less expense means lower taxes.
Because of a combination of default budgets and voter rejection of past vehicle capital reserve warrant articles, the current condition of the DPW fleet is significantly degraded.
Due to age and normal wear and tear, two vehicles in the DPW fleet failed to pass state inspections and were therefore rendered unusable. The age of these trucks, coupled with the very expensive repairs required to pass the inspections, made it cost-prohibitive to do so. In addition to the trucks, the town is operating a 14-year-old back hoe that has been of limited use because of frequent breakdowns requiring expensive repairs.
One of the affected trucks has been replaced by using funds that were intended for other services. Those delayed other services, i.e., fixing a road and/or doing less critical repairs on other equipment will cost even more to do later.
The second vehicle, a 15-year-old snow plow/dump truck, is still not fit for service and the town could not afford to divert any other funds to replace it. The town was forced to lease a private vehicle to plow the routes normally assigned to this truck. The contract cost exceeds the yearly cost of owning our own truck.
The 14-year-old back hoe has had serious maintenance issues for a number of years. To properly assess the status of needed repairs, the unit must be split in half to expose the internal systems for inspection. The cost to do this inspection is $5,000 in and of itself, and must be spent before we are able to even estimate how much the repairs will be. We do know that the electrical system, which has suffered fire damage in the past, and the hydraulic system, which has had chronic problems with hoses and fittings that have simply worn out, will probably need significant repairs.
To address the substandard condition of this fleet, the CIP recommended that the above three vehicles (at a minimum) be replaced this year. W&M has unanimously endorsed that recommendation. Article 32 – Highway Equipment and Vehicle Capital Reserve Fund is proposed by the Selectmen as a first step toward fulfilling the recommendations of both committees.
Our oldest fire engine will be 26-years-old this year – much older than several of the volunteers who operate it. Not only is there significant rust deterioration in the tank supports, this vehicle does not possess any of the significant technological and safety improvements that have been introduced over the last two and a half decades. Among other things, this fire engine is not equipped with roll over protection, three-point seat belts, anti-lock brakes, traction control, air bags or any of the other features that are standard on modern vehicles.
The National Fire Protection Association recommends 10 years active and then five years as a backup for fire engine life spans. Amherst, and most small New England towns, have routinely been able to make their equipment last for 20 years of active service. History has shown us that the increase in repairs and upgrades are typically less than the additional depreciation that will be realized between 15 and 20 years and that makes a 20-year planned life span a financially sound practice. The situation is quite different after age 20.
It is possible with moderate increases in repair and by scheduling an additional (very expensive) refurbishment, to extend the life of a fire engine for a few years if it is absolutely necessary. However, indefinite delay in replacement does not make financial sense because the combination of more frequent repairs and the loss of residual value exceed the yearly cost of replacing the vehicles on a 20-year cycle.
Article 27 – Fire Truck Capital Reserve Fund is not an authorization to buy a new fire engine. It is, however, a way to ensure that the town can afford to buy one when it is needed.
Because of the funding issues noted above, the town’s vehicles have not been methodically replaced in accordance with the existing long-term fleet management plans. The forced deviations from those plans have skewed the desired age of our fleets and will result in uneven expenditures in at least the two following areas:
1. Repairs because we are forced to keep more older vehicles in operation simultaneously.
2. Replacement cost because more vehicles will reach the end of their useful life having little, if any, residual trade-in/resale value.
W&M feels that the Selectmen’s proposed budget and warrants have incorporated as many of the recommendations of the CIP as possible while trying to keep the increase in taxpayer burden to a minimum.
In summary, we, the town of Amherst, are now in “catch up” mode due to insufficient funding caused by default budgets and rejected warrants for capital equipment. This year’s proposed budget and the vehicle replacement warrants are the critical first steps toward fixing that problem.
Election day is Tuesday, March 11.
BOB BREWSTER, chair, ANDY
LEFEBVRE, PAULA TROIE, COLLEEN LYNCH, NATE JENSON, alternate and JOHN POST, alternate
Amherst Ways & Means Committee