Police Jury public works committee members are looking to possibly save money by entering into an agreement with Enterprise Fleet Management on new vehicle purchases.
Committee members met Monday morning to discuss the possible arrangement with Dustin Hinds, Enterprise spokesman.
According to Hinds, under his plan Franklin Parish Police Jury would lower the average age of their fleet, reduce operating costs and maintain a manageable vehicle budget.
Currently, the Police Jury has a fleet of 20 vehicles, mainly trucks, with just 12 regularly running. The average vehicle year model is 2014.
The Police Jury would purchase the vehicles through an open-end equity lease, according to Enterprise documents.
An open-end lease is a type of rental agreement that obliges the lessee to make a balloon payment at the end of the lease agreement amounting to the difference between the residual and fair market value of the asset.
Hinds explained to the Police Jury how the open-end equity lease would work.
“When we say leasing, most everybody goes to traditional leases,” Hinds said. “When I go to a dealership, I may get 12,000 miles a year (with a lease). If I go over they will bust me with penalties. An open-end lease is more like financing a vehicle down to a balance. All of the money that is paid into the vehicle from depreciation is parish money. So, that money is able to be utilized back into the parish. That is why it is very effective for many municipalities.”
Open-end leases are also called "finance leases."
Often, open-end leases are used in commercial transactions. For example, when a moving business procures a fleet of vans and trucks, an open-end lease may prove to be a better bargain due to the unlimited mileage offered under the terms of a lease.
According to Hinds, Enterprise Fleet Management works with 85 government entities with the closest to Franklin Parish being Monroe.
“We can help fund the vehicles and get your fleet updated, so you can get out of some of the maintenance woes and improve some of the fuel efficiency,” Hinds said.
Committee members took no action and will review the presented information.
Last year, the Winnsboro Town Council unanimously approved a 10-vehicle lease agreement with Enterprise Fleet Management.
The vehicles are used in Winnsboro’s public works departments.
The four-year lease was a cost-saving measure while replacing the town’s aging fleet, according to former Winnsboro Mayor John Dumas.
“By partnering with Enterprise Fleet Management, it is estimated that the Town of Winnsboro will reduce maintenance costs by 72 percent,” said Karen Molberg, Enterprise account executive, to Council members. “By shifting from reactively replacing inoperable vehicles to planning vehicle purchases, the city will be able to replace 10 of its oldest vehicles within a year and save approximately $22,580.”
According to Enterprise documents, Winnsboro was expected to save approximately $250,000 over eight years and reduce maintenance cost by 72 percent.
Before entering into an Enterprise contract, Winnsboro suffered from numerous breakdowns from an aging fleet.