OK, I HEREBY CALL THE PARKER CITY COUNCIL SPECIAL MEETING TO ORDER ON MARCH 7TH [CALL TO ORDER] [00:00:10] 2022 AT 3:00 P.M. AT THIS TIME, I WILL ASK MR. OLSON, DO WE HAVE A SUPER QUORUM? YES, MADAM MAYOR. YOU DO. OK. OK. AT THIS TIME, I WILL ASK MR. SOLOMON IF HE WILL DO THE AMERICAN PLEDGE AND MR. DOUGLAS, IF YOU WILL READ THE TEXAS PLEDGE. SOUNDS GOOD. I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA AND TO THE REPUBLIC FOR WHICH IT STANDS, ONE NATION UNDER GOD, INDIVISIBLE WITH LIBERTY AND JUSTICE FOR ALL. HONOR THE TEXAS FLAG, I PLEDGE ALLEGIANCE TO THEE, TEXAS ONE STATE UNDER GOD ONE AND INDIVISIBLE. THANK Y'ALL. AT THIS TIME, I WILL. DO YOU WANT ME TO READ THIS BEFORE I OPEN THE PUBLIC HEARING? [PUBLIC HEARING] AT THIS TIME, I AM GOING TO READ THE WHILE WE'RE HERE TODAY TO GO ON ORDINANCE PROPOSED ORDINANCE NUMBER 812. AN ORDINANCE OF THE CITY OF PARKER, COLLIN COUNTY, TEXAS, ENACTING A TEMPORARY MORATORIUM ON THE ACCEPTANCE, AUTHORIZATION AND APPROVALS NECESSARY FOR THE SUBDIVISION, SITE PLANNING, DEVELOPMENT, ZONING, CONSTRUCTION IN THE CITY LIMITS AND EXTRATERRITORIAL JURISDICTION, PROVIDING FINDINGS OF FACT DEFINITIONS APPLICABILITY, PURPOSE, ENACTMENT, DURATION, EXTENSION, EXCEPTIONS AND EXEMPTIONS, DETERMINATION AND APPEALS PROVIDING FOR A SEVERABILITY REPEALER ENFORCEMENT, PROPER NOTICE AND MEETING AND AN EFFECTIVE DATE. OK, AT THIS TIME, WE ARE GOING TO OPEN THE PUBLIC HEARING. IT IS 3:02 AND MR. BIRKHOFF I WILL ASK IF YOU WILL COME UP AND PROVIDE US INFORMATION. JOHN BIRKHOFF, AT BIRKHOFF HENDRICKS AND CARTER OF DALLAS, TEXAS. I'M ACTING AS THE CITY ENGINEER AND I'M GOING TO GO BACK IN TIME A LITTLE BIT AND BRING YOU UP TO DATE TO WHERE WE ARE TODAY. THIS ALL STARTED BACK IN 2008, WHEN WE DID A MASTER PLAN STUDY FOR THE CITY OF PARKER, YOU KNOW, ENVISIONING WHAT THE FUTURE WOULD BE. IN THAT REPORT, YOU KNOW, WE, YOU KNOW, THE CITY HAD A TRACT OF LAND FOR SECOND DELIVERY POINT FROM THE DISTRICT. AND SO WE SIZE THE PUMP STATION, NEEDS THE GROUND STORAGE NEEDS FOR THAT STATION. AND THEN AS TIME HAS GONE ON, THERE'S BEEN A POINT, YOU KNOW, WE'VE MADE PROJECTIONS OF WHEN WE NEED TO HAVE THAT PUMP STATION IN PLACE. SO BACK IN 2008, WHEN WE WERE LOOKING AT THE CITY, WE HAD LOOKED AT A BUILD OUT POPULATION AROUND 14,000 PEOPLE. THERE WERE SEVERAL LARGE TRACTS OF LAND THAT STILL EXIST TODAY. BUT IN, YOU KNOW, 50 YEARS FROM NOW, THEY MAY NOT BE BIG LARGE PLOTS OF GROUND. SO WE TRIED TO ENVISION THAT OF WHAT IT WOULD BE. AND SO, YOU KNOW, WE MADE OUR POPULATION PROJECTIONS AND WE LOOKED AT DEMANDS. SO WE DID A DEMAND STUDY BACK IN 2008 AND WE UPDATED IN 2015. AND WHEN WE DO A DEMAND STUDY, YOU KNOW, WE GO THROUGH AND WE LOOK AT YOUR ACTUAL PUMPAGE RECORDS ON AN HOURLY BASIS, THE MOVEMENT IN YOUR ELEVATED STORAGE ON AN HOURLY BASIS. AND WE COME OUT WITH HOW MUCH WATER YOU GUYS ARE ACTUALLY USING. AND BY DOING, YOU KNOW, ON A PER HOURLY BASIS, WE KNOW WHEN THE MAX DAY IS AND WE KNOW WHEN THE MAX HOUR IS. AND SO BACK IN 2008, YOU KNOW, YOU WERE LIKE A LOT OF OTHER COMMUNITIES USING A WHOLE LOT OF WATER IN THAT TIME FRAME. AND UP TO NOW, YOU KNOW, WE'VE HAD SOME DROUGHT CONDITIONS. WE'VE SEEN A LOT MORE PEOPLE MOVE INTO NORTH CENTRAL TEXAS. AND WE'VE SEEN LAKE LAVON, YOU KNOW, KIND OF LOOK LIKE IT WAS READY TO DRY UP. AND SO PEOPLE CHANGE THE WAY THEY USE WATER. AND, YOU KNOW, ONE THOUGHT WAS, WELL, THAT WAS GOING TO BE TEMPORARY. AND AS WE GO ON, PEOPLE WOULD REVERT BACK TO THE WAY THEY WOULD USE WATER. WELL, A COUPLE OF THINGS HAVE OCCURRED. ONE, A LOT OF CITIES, INCLUDING PARKER, RAISE THEIR WATER RATES TO GET ATTENTION OF PEOPLE TO TRY TO CONSERVE WATER. [00:05:02] AND EVERY SUMMER, WE HEAR ON THE RADIO AND TV NORTH TEXAS WATER DISTRICT, DALLAS WATER UTILITIES, TARRANT COUNTY, THEY HAVE PUBLIC SERVICE ANNOUNCEMENTS TELLING PEOPLE TO VALUE WATER AND DON'T USE IT AS MUCH. AND SO AS WE'VE DONE DEMAND STUDIES NOT ONLY HERE BUT IN SURROUNDING CITIES, WHAT WE HAVE SEEN IS A DECREASE IN THE WAY PEOPLE USE WATER. SO IN 2015, WE WENT BACK AND WE UPDATED THE MASTER PLAN WITH SOME REVISED NUMBERS. AND YOU KNOW, WE WERE ABLE TO REDUCE THE SIZE OF THE PUMP STATION AND REDUCE THE AMOUNT OF SUPPLY THAT WAS NEEDED. AND IN ABOUT THAT TIME, THERE WAS A LOT OF SUBDIVISIONS THAT WERE BEING PLANNED. A LOT OF THOSE ARE IN THE GROUND NOW OR ABOUT TO BE ON THE GROUND NOW. SO WE WOULD, YOU KNOW, GET OUR PROJECTIONS OF POPULATION. WE KNOW HOW MANY EMPTY LOTS THERE ARE. AND THEN WE WOULD PROJECT OUT WITH WHAT WE CALL OUR MAX DAILY DEMAND. SO MAX DAILY DEMAND IS GOING TO BE THE HIGHEST DEMAND THAT YOU WOULD EXPERIENCE IN A HOT, DRY SUMMER BASED ON RECORDS. AND YOU KNOW, AS WE LOOK AT THAT, YOU KNOW, WE SEE PROJECTIONS UPWARDS, YOU KNOW, ABOUT 400 AND SOME GALLONS PER CAPITA PER DAY. AND SO WHEN WE APPLY THAT TO THE FOLKS THAT ARE HERE AND THE NUMBER OF LOTS, WE ARE AT OR BEYOND THE SUPPLY THAT YOU CAN GET FROM THE WATER DISTRICT. AND SO, YOU KNOW, AS WE'VE DONE THESE PERIODICALLY THROUGH THE YEARS, YOU KNOW WE'RE THERE. AND BACK IN 2020, YOU KNOW, WE LOOKED AT THESE NUMBERS AND SAID, WE REALLY NEED TO GET THE PUMP STATION GOING. WE'VE DELAYED IT FOR WHATEVER REASONS. BUT THE TIME IS NOW THAT WE NEED TO GET THAT STATION GOING AND BRING IT ONLINE TO MEET, YOU KNOW, SOME OF THE DEMANDS THAT ARE COMING UPON US. AT THAT POINT AND GOING BACK TO 2014 2015, THERE WAS CONVERSATIONS WITH THE NORTH TEXAS MUNICIPAL WATER DISTRICT FOR A NEW CONTRACT THAT HAS BEEN AN ONGOING CHORE THAT THE CITY HAS HAS ENCOUNTERED, TRYING TO GET SOMETHING THAT WORKS FOR BOTH PARTIES. AND AS OF TODAY, WE DON'T HAVE THAT AGREEMENT. WE DID MOVE FORWARD TO PUMP STATION, THE NORTH TEXAS MUNICIPAL WATER DISTRICT BASICALLY, SAID MR. CONTRACTOR. YOU ARE NOT ALLOWED TO TAP OUR EIGHTY FOUR INCH LINE THAT RUNS, YOU KNOW, ADJACENT TO THE PUMP STATION UNTIL WE HAVE A CONTRACT, WE HAVE, YOU KNOW, THE CONTRACTOR IS FINISHING UP, I THINK WE'RE GETTING POWER HERE THIS WEEK AND WE'RE GOING TO START TESTING THE PUMP STATION, BUT WE HAVE NO SUPPLY. SO THE CITY HAD US GO BACK THROUGH AND LOOK AT, YOU KNOW WHAT WE HOW PEOPLE USED WATER LAST YEAR AND MAKE SOME PROJECTIONS. AND AGAIN, WITH OUR PROJECTIONS, WITH THE EMPTY LOTS THAT YOU HAVE ALREADY APPROVED, THAT THERE'S NOT HOUSES ON IF ALL OF THOSE GET CONSTRUCTED. AND WE HAVE A HOT, DRY SUMMER, WE'RE GOING TO EXCEED THE SUPPLY FROM THE DISTRICT. SO AS YOU KNOW IN OUR LETTER TODAY, YOU KNOW, WE'RE RECOMMENDING THAT ANY DEVELOPER COMES IN AND THEY WANT TO PUT LOTS ON THE GROUND. DON'T DO IT UNTIL YOU CAN BE ASSURED THAT YOU CAN HAVE A WATER SUPPLY. I DON'T KNOW HOW LONG IT WILL TAKE TO GET AN AGREEMENT WITH NORTH TEXAS. ONCE AN AGREEMENT IS SIGNED IT WILL PROBABLY TAKE 60 TO 90 DAYS TO BRING THE PUMP STATION ONLINE. AND YOU KNOW, ONCE WE FINISH HERE, THE CONTRACTOR IS GOING TO MOVE AWAY. WE'RE GOING TO HAVE TO SCHEDULE HIM AND PAY HIM TO COME BACK TO MAKE THIS CONNECTION. THEN NORTH TEXAS, WE'RE GOING TO HAVE TO GET THEM SCHEDULED IN TO TEST ALL THEIR METER STATION AND THEN WE CAN BE FLOWING WATER. SO IT IS CRITICAL THAT WE JUST DON'T KEEP APPROVING LOTS AND NOT HAVE A CONTRACTED IN A KNOWING WATER SUPPLY AT SOME POINT IN TIME. AS WE HEAD INTO THIS SUMMER AS WE HAD LAST SUMMER WAS, YOU KNOW, A PRETTY MILD SUMMER. YOU KNOW, I WOULD SAY THERE ARE HISTORICALLY MORE WET SUMMERS THERE ARE COOLER SUMMERS IN THE HOT, DRY EXTREME ONES. IT'S THE HOT, DRY, EXTREME ONES THAT WE'RE GOING TO BE RIGHT ON THE BORDERLINE OF MEETING THE DEMAND THAT WE HAVE TODAY. IF ALL THOSE LOTS GET FILLED, WE MAY BE ON THE LINE OF MEETING THE DEMAND WITH THE PEOPLE WE HAVE TODAY, DEPENDING ON HOW THEY USE WATER. WHEN WE LOOKED AT THE 2020 DATA, THAT PER CAPITA WAS DOWN, BUT WHEN I WENT BACK TO 2019, IT WAS BACK UP OVER ABOUT 450 GALLONS PER CAPITA PER DAY. LAST YEAR, YOU KNOW, IT WAS AROUND 400 A LITTLE UNDER 400. SO, YOU KNOW, IT'S UNPREDICTABLE THE WAY PEOPLE USE WATER, BUT IT IS, YOU KNOW, WE CAN [00:10:02] KIND OF LOOK IN THE CRYSTAL BALL AND, YOU KNOW, WE HAVE A BUNCH OF 100 DEGREE WEATHER AND NO SIGN OF ANY RAIN AND AS THE SUMMER LINGERS ON PEOPLE USE MORE, MORE WATER TO WATER THEIR FOUNDATION OR THEIR PLANTS FOR THEIR YARD. AND THAT'S, YOU KNOW, Y'ALL ARE NO DIFFERENT THAN ANYONE ELSE IN THE METROPLEX IT'S JUST THE WAY WE SEE, YOU KNOW, WATER CONSUMPTION AN THE WAY PEOPLE USE WATER. AND IT'S VERY UNPREDICTABLE, YOU KNOW HOW PEOPLE REACT. SO I'LL OPEN UP FOR ANY QUESTIONS YOU HAVE. WHAT WAS THE SO IN 2008, I GO BACK A LITTLE BIT. IT WAS SIX HUNDRED AND FORTY FIVE GALLONS PER CAPITA PER DAY. IN 2015, IT DROPPED TO FIVE HUNDRED AND SEVENTY ONE GALLONS PER CAPITA PER DAY. IN 2020, WE WERE AT SIX HUNDRED AND FORTY GALLONS PER CAPITA PER DAY. IN THE SUMMER OF 2021 IT DROPPED TO FOUR HUNDRED AND SEVENTY TWO GALLONS PER CAPITA PER DAY. SO YOU CAN SEE IT'S A ROLLER COASTER OF WHERE WE ARE. BUT IF WE START TO TAKE IN MORE RECENT TIMES, THE DEMAND 2020, WE'RE 640. THAT'S ABOUT WHERE WE WERE IN 2008 AND WE WENT BACK AND LOOKED AT TO SEE IF THERE'S ANY CORRELATION BETWEEN HOT AND DRY. THERE WAS JUST NO CORRELATION THAT WE COULD FIND. WE ACTUALLY USED MORE WATER WHEN IT WAS RAINING OUT AND THEN, YEAH. SO, YOU KNOW, THE DATA IS JUST WE COULDN'T FIND A CORRELATION UNLESS WE STARTED GOING LOOKING AT DEW POINTS [INAUDIBLE]. AND IT REALLY, YOU KNOW, IF YOU HAVE IT'S HOT AND DRY, THEN IT RAINS, YOU KNOW, A COUPLE OF DAYS AND THEN IT GETS HOT AND DRY AND IT RAINS IN A FEW DAYS. IT'S NOT AS BAD AS IF WE HAD NO RAIN. SO IN 2019, THE DISTRICT BILLED YOU 99 BILLION NINE HUNDRED AND NINETY SEVEN THOUSAND GALLONS ANYWAY, AVERAGE THROUGHOUT THE WHOLE YEAR, IT WAS 3.2 MILLION GALLONS PER DAY PER MONTH WAS PER DAY WAS THE AVERAGE AND THE SUPPLY YOU HAVE FROM DISTRICT THAT THE EAST SIDE IS 3.5 MILLION GALLONS A DAY. SO, YOU KNOW, WE'RE VERY CLOSE. WE DON'T WANT TO GO ABOVE THAT THREE POINT FIVE BECAUSE THEN THAT FALLS INTO THAT TAKE OR PAY SCENARIO. YOU KNOW, YOU CAN, BUT IT JUST IT DOESN'T. IT WON'T BE WELL FOR THE CITIZENS OF THE CITY OF PARKER FOR THAT. AND SO IN 2019, BASED ON THE WATER THAT WAS USED AND THE POPULATION OF AROUND 550, 200 PEOPLE THAT CAME UP ON AVERAGE ABOUT 288 GALLONS PER CAPITA PER DAY OF WATER USAGE, YOU KNOW, NORTH TEXAS IN THE STATE OF TEXAS. THEY WANT YOU DOWN TO AROUND 140 GALLONS PER CAPITA PER DAY. EVERYBODY IN THE STATE. SO THERE'S A 50 PERCENT REDUCTION, YOU'RE SAYING. YES. IF YOU GO BACK ON A PER ACRE DAY AND I HAVE THAT SOMEWHERE IN HERE, PARKER COMPARED YEAH SO PARKER, HAS ABOUT SIXTY FIVE HUNDRED ACRES, YOU KNOW, AND WE HAVE A BUILD OUT MAX DAY DEMAND ABOUT 9.66. SO WE WORK ALL THAT OUT ON A PER ACRE PER DAY IS ABOUT FOURTEEN HUNDRED AND NINETY ONE GALLONS PER ACRE. IF YOU LOOK AT MURPHY, WHO'S BILLED OUT, MAX DAY IS ABOUT 11 NOT TOO FAR OFF YOURS, BUT 3000 ACRES THERE PER ACRE IS THIRTY SIX HUNDRED AND TWENTY. SACHSE IS SEVENTEEN HUNDRED AND FORTY NINE, AND WYLIE IS THIRTY NINE SIXTY NINE. SO IF YOU LOOK ON A PER ACRE BASIS, YOU ALL ARE LOWER THAN YOUR SURROUNDING CITIES. BUT WHEN YOU LOOK ON A PER CAPITA BECAUSE OF THE LOT SIZES, YOU HAVE THAT PER CAPITA USAGE, IT'S HIGHER. SO WE BACK IN AND WE DID THIS BACK IN JULY OF 2014, JUST LOOKING AT THE DIFFERENT CITIES OF GROSS ACRES, KNOWING WHAT THEIR MAX DAY DEMAND WAS AND TRYING TO GET THAT COMPARISON ON A PER ACRE BASIS. ANY OTHER QUESTIONS FOR MR. BIRKHOFF AT THIS TIME? OK, THEN, THANK YOU MR. BIRKHOFF. DON'T RUN AWAY, THOUGH. [00:15:01] WE MAY NEED YOU. OK? ARE THERE ANY OTHER PEOPLE THAT WOULD LIKE TO SPEAK IN THE PUBLIC HEARING? OK, MR. DOUGLAS IS. AFTERNOON, JIM DOUGLAS I ACTUALLY HAD A COUPLE OF QUESTIONS AT THIS PUMP STATION, HOW MUCH IS THAT COSTING US ROUGHLY? HOOK IT UP. IT SEEMS TO ME LIKE THIS MEETING SHOULD HAVE BEEN HELD TWO OR THREE YEARS AGO OR CERTAINLY WHEN THE PUMP STATION WAS STARTING CONSTRUCTION. NOW WE'RE GOING TO HAVE TO HAVE A CONTRACTOR MOVING OFF AND THEN PAY THEM TO MOVE BACK ON. WHEN YOU GET THIS DONE, I MEAN, THIS IS SORT OF BACKWARDS AND IT'S ABSOLUTELY SILLY. HERE WE ARE TIGHT WITH MY DOLLARS AND WE'RE SPENDING $6 MILLION DOLLARS ON SOMETHING, WE CAN'T EVEN HOOK UP. SO WHAT'S THE PLAN? I MEAN, HOW AGGRESSIVE? WHO'S MEETING WITH NORTH TEXAS TRYING TO NEGOTIATE THIS? BECAUSE NORTH TEXAS IS [INAUDIBLE], THEY GOT THEIR RULES. THEY GOT THEIR 13 MEMBER CITIES. AND EVERYBODY ELSE IS A CUSTOMER. AND THE 13 MEMBER CITIES RULE NORTH TEXAS. I DEAL WITH THEM ALL THE TIME. THERE'S NOT A LOT OF GIVE WITH THEM. YOU SHOULD HAVE GOTTEN A CONTRACT DONE BEFORE YOU STARTED CONSTRUCTION, OR AT LEAST WHEN THIS CONSTRUCTION STARTED TWO YEARS AGO. SO WHAT HAVE YOU BEEN DOING FOR TWO YEARS? ANYBODY. NOBODY. NO ANSWER. THAT'S ABOUT WHAT WE GET. THANK YOU. THANK YOU. NO, PLAN. IS THERE ANYBODY ELSE THAT WISHES TO SPEAK DURING THE PUBLIC HEARING? OK, HEARING AND SEEING NO ONE RUSHING TO THE MICROPHONE, I WILL CLOSE THE PUBLIC HEARING AND AT THIS TIME, WE WILL GO TO THE INDIVIDUAL. [INDIVIDUAL CONSIDERATION ITEMS] HUH? OK. AT THIS TIME, WE'LL GO TO THE INDIVIDUAL CONSIDERATION, ITEMS, CONSIDERATION AND CONDUCT THE FIRST OF TWO PUBLIC READINGS OF AN ORDINANCE ENACTING A PROPOSED TEMPORARY MORATORIUM ON THE ACCEPTANCE, REVIEW AND APPROVALS NECESSARY FOR THE SUBDIVISION, SITE PLANNING, DEVELOPMENT OR CONSTRUCTION WITHIN THE CITY LIMITS IN EXTRATERRITORIAL JURISDICTION OF THE CITY OF PARKER. OK, COUNCIL, IS THERE ANY COMMENTS? ANY QUESTIONS? DO I NEED TO READ THE OK. OH, YEAH, THERE WE GO, THANK YOU. OK. OK. AT THIS TIME, I WILL READ THE PROPOSED ORDINANCE AGAIN, AN ORDINANCE OF THE CITY OF PARKER, COLLIN COUNTY, TEXAS, ENACTING A TEMPORARY MORATORIUM ON THE ACCEPTANCE, AUTHORIZATION AND APPROVALS NECESSARY FOR THE SUBDIVISION, SITE PLANNING, DEVELOPMENT, ZONING AND CONSTRUCTION IN THE CITY LIMITS. AND EXTRATERRITORIAL JURISDICTION, PROVIDING FINDINGS OF FACT DEFINITIONS, APPLICABILITY, PURPOSE, ENACTMENT, DURATION, EXTENSIONS, EXCEPTIONS AND EXEMPTIONS. DETERMINATIONS AND APPEALS PROVIDING FOR A SEVERABILITY REPEALER, ENFORCEMENT AND PROPER NOTICE AND MEETING AND AN EFFECTIVE DATE. OK. ANY COMMENTS? I JUST HAVE ONE QUESTION. HOW MANY PROPOSED SUBDIVISIONS ARE BEING TALKED ABOUT, I MEAN, THAT HAVEN'T BEEN APPROVED YET, HAS ANYBODY? THERE SHOULDN'T BE ANY RIGHT NOW. SO THERE'S NOTHING THAT'S POSSIBLY COMING DOWN THE PIKE. THERE SHOULD BE NOTHING THAT'S ALREADY NOT ACCOUNTED FOR. YES, MA'AM. ANY OTHER QUESTIONS OR COMMENTS, IF NOT, I WILL TAKE A MOTION. NO MOTION. NO A MOTION. OK, THEN. YEAH, THAT'S IT. OK, THEN AT THIS TIME WE WILL ADJOURN THE COUNCIL MEETING AND GO TO THE WORKSHOP. [00:20:03] AND I BELIEVE MR. HARDWICK IS HERE FROM ENTERPRISE TO TALK TO US ABOUT CHANGING OUR VEHICLE POLICIES. HELLO, MAYOR AND COUNCIL, JUST WAIT FOR ME TO PLUG IN OR DO YOU ALL HAVE AH THERE WE GO. [INAUDIBLE] HOOK UP IS THAT? HDMI? HDMI. USB? LET'S SEE IF THIS WORKS OR NOT. OK, LET ME. WHEN YOU BEGIN. SORRY, DON'T ENCRYPT. I DON'T KNOW, IT'S A GOOD QUESTION. IT'S A NEW ONE FOR ME. IT'S EVEN WORSE. I THINK IT TAKES A STRONG DRIVE. GOTCHA. DO YOU HAVE IT ON THOUGH? I CAN EMAIL IT. YEAH, IF YOU NEED IT EMAILED, I CAN DO IT UP THERE. YOUR EMAIL ADDRESS? YEAH, IT'S NOT TOO BIG. SORRY, SLIGHT TECHNICAL ISSUE. HOLD MY MOUTH WRONG. ALL RIGHT FIRE IT OFF AND SEE IF IT. DO WE NEED TO TAKE A BREAK? IT'S TRYING. YOU PUT IT ON A FLASH DRIVE, WHAT'S THAT? FLASH DRIVES. YOU DON'T HAVE AN HDMI PLUG IN DO YOU? IT'S OFF, IT'S A LEFT THE OUT BOX. [00:25:26] WELL, MAYOR DO YOU WANT MY HOME ADDRESS, YOU WANT MY WORK ADDRESS? IT'S A NEW ONE FOR ME. YOU SAID YOU NEED TO SAY MY ADDRESS. PLEASE SAY YOUR NAME AND YOUR ADDRESS. HOME ADDRESS, OR WORK [INAUDIBLE]. WORK. OK, I'M GOOD EITHER WAY. BUT. ONE OF THEM WAS TEXTING. IT'S A LONG STORY. THEY TOOK IT OUT. YEAH, THEY TOOK IT OUT, AT LEAST ON MY PHONE, IT'S NOT ON THERE ANYMORE. AND WE'RE LOSING I THINK IT'S SO MY COMPUTER IS ENCRYPTED. OH, IT IS. YES, YOU ALL HAVE THE. DOES THE PRESENTATION FOR BOSTON? NO, YEAH NO. THAT YOU SENT ME. YEAH, WE JUST USE THAT. THAT'S FINE. NOTHING'S REALLY CHANGED SO TOO MUCH, AT LEAST . YEAH, LET ME SEE. OR YOU CAN ALSO PULL UP THE SYNOPSIS I SENT TO GRANT AND YOU TODAY, I THINK I SENT ONE TODAY. I CAN WORK OFF THAT TOO. [INAUDIBLE]. THERE YOU GO. I CAN WORK OFF THAT. [APPLAUSE] ISN'T SO, [INAUDIBLE], YOU'LL BE MY-- YOU'LL BE THE SCROLLER, I GUESS. APPRECIATE IT. OK. ALL RIGHT. WELL, THANK YOU SO MUCH. [WORKSHOP] MY NAME IS NICK HARDWICK, I'M WITH ENTERPRISE FLEET MANAGEMENT, WHICH IS AT 4201 STATE HIGHWAY 161 IN IRVING. THAT'S OUR LOCAL OFFICE HERE. THE ENTERPRISES, WE'RE HEADQUARTERED OUT OF ST. LOUIS, MISSOURI. [INAUDIBLE] OUT OF, BUT I'M HERE LOCAL WITH MY DALLAS BASED TEAM THAT WE HAVE HERE. SO I APPRECIATE, AGAIN, MAYOR AND COUNCIL FOR HAVING ME HERE. I'M DEFINITELY EAGER TO KIND OF WALK EVERYBODY THROUGH, YOU KNOW, THE ANALYSIS OF [00:30:03] [INAUDIBLE]. WE CURRENTLY WORK WITH ROUGHLY 170 PLUS CITIES THROUGHOUT THE STATE OF TEXAS, RANGING IN SIZE. YOU KNOW, I CAME [INAUDIBLE] THROUGH, YOU KNOW, UP HERE IN NORTH TEXAS AREA, WORK WITH JUSTIN, ANNA ARE A COUPLE OF CITIES, HIGHLAND VILLAGE, PROSPER, PILOT POINT, THOSE ARE SOME UP NORTH. BUT THEN ALSO LIKE KELLER, COLLEYRVILLE, CITY OF ROWLETT, A FEW OF THE ONES AROUND THE AREA THAT WE CURRENTLY WORK WITH TODAY. IN A DAY WHAT WE DO [INAUDIBLE] IS WE HELP CITIES OPERATE A MUCH NEWER, MORE FISCALLY EFFICIENT FLEET THAN THEY HISTORICALLY HAVE, AND REALLY, IT'S ALL ABOUT HELPING THEM DRIVE DOWN THE TOTAL CAPITAL AND OPERATING DOLLARS THAT THE CITY SPENDS OVER A LONG PERIOD OF TIME. AND SO WHAT PUT TOGETHER TODAY IS A FINANCIAL ANALYSIS OF YOUR CITY WITH ALSO, THIS ALSO HAS SOME PROJECTED GROWTH IN IT, AS WELL AS THE CITY GROWS TO BE TO HANDLE GROWTH INTO THE FUTURE AS IT SITS TODAY. SO AS YOU CAN SEE, THIS IS A SYNOPSIS WHICH [INAUDIBLE] CURRENTLY, YOU KNOW, WE HAVE A NUMBER OF VEHICLES THAT ARE MORE THAN 10 YEARS OLD WITHIN THE CITY, YOU KNOW, QUITE A FEW THAT ARE MORE THAN FIVE YEARS OLD TODAY. YOU KNOW, IN THIS ANALYSIS, WE'RE PROJECTING ROUGHLY $497,000 DOLLARS IN SAVINGS OVER THE NEXT TEN YEARS OF OPERATION. THAT'S IN COMPARISON TO THE CURRENT COST BASIS THAT THE CITY HAS TODAY. YOU [INAUDIBLE] TO SCROLL DOWN TO THE ANALYSIS PORTION OF IT, WE'LL WE'LL KIND OF SPEND OUR TIME THERE. SO, THE CITY CURRENTLY A SIXTEEN VEHICLES IN OPERATION RIGHT NOW, WE HAVE PROJECTED FOUR GROWTH VEHICLES INTO THE ANALYSIS ITSELF. THIS IS REALLY GOING THROUGH A REPLACEMENT PLAN OF THE CITY. NOW, THIS, FOR THE REASON OF FOR GROWTH, I MEAN, THE CITY [INAUDIBLE] ADOPTS THIS PLAN, THIS GIVES THE CITY ABILITY TO BE ABLE TO GROW ITS FLEET, YOU KNOW, BEYOND [INAUDIBLE] PART OF OUR PROGRAM. SO WE HAVE A COOPERATIVE AGREEMENT WITH TWO PRIMARY COOPERATIVES IN THE STATE OF TEXAS, ONE THROUGH SOURCEWELL, ONE THROUGH TIPS. TIPS IS THE MOST COMMONLY USED ONE, IT'S A FLEET MANAGEMENT AWARD, WHICH IS GOING TO BE ALL ENCOMPASSING OF THE SERVICES I'LL TALK ABOUT TODAY. IT'S REALLY--. SO WE'RE HELPING SEE EVERYTHING FROM ACQUISITIONS OF THOSE VEHICLES ALL THE WAY THROUGH THE DISPOSAL OF THE VEHICLES AND ALL THOSE THINGS IN BETWEEN. MAINTENANCE, FUEL, DISPOSITION RESALE. KNOWING WHEN TO BUY AND WHEN THE SELL IS A BIG PIECE OF THIS. [INAUDIBLE] MAY GO DOWN TO THE ANALYSIS PORTION OF IT. SO AS IT CURRENTLY SITS, TODAY IS-- [INAUDIBLE] UP THERE. CITY IS SPEND ROUGHLY $216,000 EVERY YEAR ON ITS FLEET AS IT CURRENTLY SITS, AS A COMBINATION OF ITS AVERAGE ANNUAL ACQUISITION EXPENSE, AS WELL AS THE CURRENT OPERATIONAL EXPENSES THAT THE CITY INCURS TODAY, SO MAINTENANCE AND FUEL EXPENSES. ON AVERAGE, THE CITY IS BUYING AROUND 2.5 VEHICLES EVERY YEAR AS IT HISTORICALLY STANDS, SO SOME YEARS MORE, SOME YEARS LESS, BUT ON AVERAGE YOU'RE BUYING ABOUT 2.5 VEHICLES EVERY YEAR. AND THAT'S WHAT BUILDS YOUR AVERAGE ANNUAL PURCHASE EXPENSE ROUGHLY $120,000-$130,000 DOLLARS. THERE IT GOES. [LAUGHTER] PERFECT TIMING. SO AND THAT BUILDS IN YOUR TOTAL FROM A COMPARISON STANDPOINT IS WHAT I'VE DONE AS I COMPARED THE CURRENT AVERAGE ANNUAL EXPENSE COMPARED TO MOVING INTO A MORE DEFINED REPLACEMENT PLAN FOR THE CITY. SO AMONG THE CITY VEHICLES, THERE ARE 11 VEHICLES THAT ARE AT OR BEYOND THEIR IDEAL CYCLE POINT AS IT SITS TODAY. THOSE ARE--. AND WHEN I SAY THE [INAUDIBLE] DEFINED CYCLE POINT THAT CAN BE, YOU KNOW, PICKUP TRUCKS GONNA CYCLE A LITTLE BIT DIFFERENTLY THAN A PATROL VEHICLE, DIFFERENTLY, THERE MAY BE A FLATBED OR SOMETHING LIKE THAT THAT MIGHT BE NEEDED IN PUBLIC WORKS, AND REALLY, OUR JOB IS TO HELP THE CITY DEFINE WHAT ARE THE KEY POINTS IN TIME WE SHOULD CYCLE OFF THE VEHICLES. SO BASED ON THOSE KEY POINTS OF TIME [INAUDIBLE] 11 VEHICLES IN THE CITY EITHER AT OR BEYOND ITS IDEAL CYCLE POINT. SO IN THE ANALYSIS HERE IN THE FIRST YEAR, WE ACTUALLY HAVE 15 VEHICLES BEING ACQUIRED IN THE FIRST YEAR, WHICH ALSO INCLUDES FOUR GROWTH UNITS. TWO IN PD, TWO IN THE PUBLIC WORKS DEPARTMENT WITHIN THE FINANCIAL ANALYSIS, WE'RE PROJECTING A YEAR ONE [INAUDIBLE] EXPENSE OF $146,000 EXPECTING $51,000 DOLLARS IN UPFRONT CAPITAL. THAT'S FOR OUTFITTING VEHICLE, LIGHTS, SIRENS, YOU KNOW, LOGOS, EVERYTHING [INAUDIBLE] VEHICLES NEED AND WE'RE PROJECTING A DROP IN THE MAINTENANCE AND FUEL EXPENSE DOWN TO $69,000, AND WE'RE PROJECTING ROUGHLY $160,000 DOLLARS IN EQUITY FROM RESALE. AND THAT'S A REALLY IMPORTANT POINT OF THIS BECAUSE THE REALLY BRINGING INBOUND REVENUE INTO THE SYSTEM THAT'S NOT NECESSARILY THERE TODAY IS ONE OF THE WAYS THAT WE CAN ENABLE THE CITY TO REPLACE VEHICLES ON A MORE REGULAR BASIS BECAUSE RIGHT NOW WE BUY A VEHICLE [00:35:03] [INAUDIBLE] YEARS, WE GO SELL THEM [INAUDIBLE] NOT REALLY WORTH THAT MUCH. BUT THIS IS ALL ABOUT SELLING THEM AT THE RIGHT POINTS IN TIME TO BRING THE INBOUND REVENUE INTO THE SYSTEM. THAT ALLOWS US TO CREATE BUDGET STABILIZATION FOR A VERY LONG PERIOD OF TIME. SO IN THE FIRST YEAR, WE'RE PROJECTING A PROJECTED COST SAVINGS IN COMPARISON TO THE CURRENT FLEET BUDGET OF $109,000 DOLLARS. SO THE YEAR ONE FLEET BUDGET OVER THE NEXT 12 MONTHS OF OPERATION OF THE NEW FLEET, WE'RE EXPECTING TO SPEND $107,000 DOLLARS IN COMPARISON TO THE AVERAGE OF $216,000. IN YEAR TWO, WE'RE EXPECTING THE LEASE EXPENSE TO BE $155,000 DOLLARS. WE'LL SPEND ABOUT $10,000 DOLLARS ON THE EQUIPMENT OF THOSE-- EQUIPPING OF THE VEHICLES THAT WE'RE ACQUIRING IN THAT GIVEN YEAR. PROJECTED MAINTENANCE AND FUEL WILL DROP DOWN TO $64,000, AND IN THAT YEAR WE'RE EXPECTING ANOTHER ROUGHLY $60,000 DOLLARS OF EQUITY COMING FROM SELLING OF THE VEHICLES. AND THE REASON WHY, YOU SEE, EVERY SINGLE YEAR WE HAVE REVENUE COMING IN FOR RESALE BECAUSE WE'RE BUYING VEHICLES AND SELLING THEM. FOR INSTANCE, [INAUDIBLE] IN THE PUBLIC WORKS DEPARTMENT, YOU HAVE YOUR REGULAR EVERYDAY PICKUP TRUCKS THAT YOU HAVE IN OPERATION. WE TYPICALLY TURN THOSE OVER EVERY 12 TO 18 MONTHS, AND THE REASON WE TURN THEM OVER THAT FREQUENTLY IS BECAUSE IN THE GOVERNMENT SPACE, WE CAN TYPICALLY BY VEHICLE RUN IT FOR A YEAR AND WE'RE SELLING IT FOR MORE MONEY THAN WE ORIGINALLY ACQUIRED IT FOR. AND THAT'S WHY [INAUDIBLE] EVERY SINGLE YEAR [INAUDIBLE] SEEING REVENUE COMING IN FROM RESALE. BECAUSE EVERY YEAR WE'RE SELLING VEHICLES, SELLING VEHICLES, SELLING VEHICLES THAT CREATE THAT CONSISTENT REVENUE ON AN ANNUALIZED BASIS TO BE ABLE TO STABILIZE YOUR BUDGET. AND IF YOU [INAUDIBLE] SEE HOW THE NUMBERS FLOW OVER THE NEXT 10 YEARS HERE, THAT'S HOW WE GET TO THE PROJECTED SAVINGS OF $497,000 DOLLARS OVER AN--. NOT IN THAT ONE, IT'S IN THE OTHER ONE THAT I SENT. YEAH--. NO, NOT IN THE POWERPOINT. IT'S IN THE--. THERE WAS ANOTHER EMAIL I SENT HAD THAT IN. AND WE'LL GO TO THAT ONE TOO. ALSO, ANOTHER QUICK QUESTION, SO ON THIS SELL BACK NOW, OBVIOUSLY WE'RE IN A MARKET RIGHT NOW THAT THE VEHICLE SELL BACK IS SOMETHING THAT'S CRAZY. PROGRAM, IS THAT A GUARANTEED RATE OF THAT SELL? BECAUSE WHEN I'M RUNNING THE NUMBERS, JUST MY HEAD HERE, THIS IS THE FIRST TIME I SAW THIS BECAUSE I COULDN'T DIGEST ALL OF THAT IN THE SHORT TIME THAT WE HAD, BUT I JUST HAVE THIS FEELING BECAUSE I'VE GONE THROUGH OTHER CONTRACTS LIKE THIS AND THEY USUALLY DON'T WORK OUT THAT WAY BECAUSE I MEAN, WE'RE IN AN EXTREMELY HIGH END AREA RIGHT NOW FOR VEHICLE SELL BACK. SO I JUST LIKE TO GET YOUR COMMENTS ON THAT, AND WHAT'S MORE REALISTIC, MAYBE OVER THE LAST 10 YEARS? WELL, THIS IS REALISTIC OVER THE LAST 10 YEARS, NOT THE CURRENT YEAR, BECAUSE WE USE HISTORICAL DATA IN A FINANCIAL ANALYSIS LIKE THIS, NOT TODAY'S DOLLARS IN TERMS OF RESALE, BECAUSE RIGHT NOW THINGS ARE EXTREME. I'LL GIVE YOU EXAMPLES OF WHAT'S GOING ON IN TODAY'S MARKET. YOU KNOW, IN THE MUNICIPAL GOVERNMENT SPACE, WE WILL BUY-- WE GOT VEHICLES WE BOUGHT A YEAR AGO. WE'RE SELLING FOR $15,000-$20,000 DOLLARS MORE THAN WE BOUGHT THEM FOR A YEAR AGO. THAT'S NOT REPRESENTATIVE IN THIS ANALYSIS AT ALL. WE'RE USING A MUCH MORE CONSERVATIVE NUMBERS THAT WE KNOW WE'RE GOING TO BE ABLE TO HIT BECAUSE THE CITY OWNS ALL EQUITY IN IT. BECAUSE THAT JUST SEEMS ODD TO ME THAT YOU WOULD DRIVE IT FOR A YEAR OR SO UNDER NORMAL CONDITIONS, AND IT WOULD STILL BE WORTH MORE THAN WHEN YOU BOUGHT IT. YEAH, AND THE REASON WHY IT DOESN'T IS BECAUSE IF YOU THINK ABOUT MUNICIPAL GOVERNMENT'S GOT TWO THINGS GOING ON WITH IT. ONE, YOU BUY VEHICLES VERY, VERY CHEAPLY, WELL UNDER THE MARKET VALUE OF WHAT ANY OTHER-- . YOU KNOW, TYPICALLY, THE AVERAGE ACQUISITION COST CAN BE SOMEWHERE BETWEEN $8,000 TO $11,000-$12,000 DOLLARS BACK AT WHAT'S CALLED FACTORY INVOICE FOR VEHICLES [INAUDIBLE] GOVERNMENT PAYS FOR VEHICLES. THE SECOND THING YOU HAVE GOING ON IS YOU DRIVE VERY, VERY LOW MILEAGE ON THE VEHICLES. I MEAN, YOU'RE NOT DOING-- THE CITY'S NOT DOING 30,000-40,000 MILES A YEAR. IT'S AVERAGING, I MEAN, ON ITS PUBLIC WORKS VEHICLES, UNDER 10,000 MILES EVERY YEAR. SO YOU COUPLE ONE, A VERY AGGRESSIVE ACQUISITION POINT FOR THE CITY, TWO VERY LOW MILEAGE, AND ALSO OUR ABILITY TO GO SELL IT OUTSIDE IN THE MARKETPLACE THROUGH SOME DIFFERENT CHANNELS THAT ALLOWS US TO MAXIMIZE OUR RETURN ON A VEHICLE. JUST [INAUDIBLE] GIVE YOU AN EXAMPLE, YOU KNOW, THE AVERAGE COST TO ACQUIRE A THREE QUARTER TON TRUCK WAS SOMEWHERE AROUND $28,000-$29,000 DOLLARS LAST YEAR, AND IN NORMAL MARKET CONDITIONS 12 MONTHS DOWN THE LINE, THAT VEHICLE HAS NINE THOUSAND MILES ON IT, IT'S GOING TO SELL FOR SOMEWHERE IN THE LOW THIRTIES. AND SO THAT'S A NORMAL MARKET CONDITIONS. NOW, IF WE'RE TALKING ABOUT TODAY'S MARKET CONDITIONS, THAT'D BE A VERY, VERY DIFFERENT SCENARIO, BUT IF--. [INAUDIBLE] ALWAYS SAY, IF I COULD GO BUY A VEHICLE AS CHEAP AS GOVERNMENT COULD BUY VEHICLES, I WOULD DO IT EVERY DAY OF THE WEEK BECAUSE THEY DO. IT'S JUST A DIFFERENT WAY OF BEING ABLE TO HANDLE [INAUDIBLE] ASSETS BECAUSE IF YOU WERE [00:40:01] TO BE ABLE TO ACQUIRE VEHICLES CHEAP AS THE GOVERNMENT [INAUDIBLE], RUN THEM FOR A SHORT PERIOD OF TIME SELLING THAT KIND OF LOW MILEAGE PATTERN, IT'S A VERY DESIRABLE VEHICLE IN THE MARKETPLACE. IN ANY MARKET CONDITION. WHAT HISTORY ARE YOU USING ON THE PURCHASE OF THE NEW VEHICLES? I KNOW WE'RE ABOUT TO GET STARTED ON THIS, BUT JUST SO THAT I UNDERSTAND AS I'M LOOKING THROUGH THIS. BECAUSE RIGHT NOW VEHICLES COST WAY MORE THAN THEY DID A YEAR AGO, THE SAME. WE DON'T KNOW WHETHER THAT PRICE IS GOING TO COME DOWN. I MEAN, EACH YEAR, VEHICLES GO UP IN PRICE, STATISTICALLY. ARE YOU USING A BASE PRICE OR DID YOU ADD INFLATION INTO YOUR PRICE--. I HAVE A THREE PERCENT INFLATION RATE BUILT IN THERE FOR [INAUDIBLE] FORM A YEAR OVER YEAR BECAUSE WE DON'T NECESSARILY KNOW WHAT 2023 PRICING IS GOING TO BE LIKE. MANUFACTURERS HAVEN'T RELEASED IT, BUT TO THE SAME DEGREE, THOUGH IF THE--. WHATEVER--. THE ACQUISITION COST OF VEHICLES IS RELATIVE IN THE ANALYSIS BECAUSE I'M BASING, YOU KNOW, 2.5 VEHICLES ACQUIRED EVERY YEAR TO BUILD YOUR COST BASIS FOR ACQUISITION EVERY YEAR. SO IF, FOR INSTANCE, VEHICLE PRICES [INAUDIBLE] GOING [INAUDIBLE] ABOUT FIVE PERCENT INSTEAD OF THREE PERCENT, THEN THAT'D BE REFLECTIVE IN YOUR BUDGET BECAUSE THIS IS VERY MUCH A FORWARD LOOKING BUDGET WHEN IT COMES TO LOOKING AT YOUR CURRENT EXPENSE BASIS ON ACQUISITION BECAUSE YOU CAN'T--. WHAT YOU PAY FOR A VEHICLE THREE YEARS AGO, YOU CAN'T GO BUY THAT VEHICLE AGAIN, RIGHT? RIGHT. WE'RE GOING [INAUDIBLE] IT'S GOING TO BE THE COST BASIS GOING FORWARD. IN YOUR EQUIPMENT COST, YOU'RE ASSUMING WORST CASE, WE HAVE TO RE-OUTFIT EVERY VEHICLE? WE CAN'T SO TO [INAUDIBLE] POINT WAS SAYING IS IN THE ANALYSIS, EVERY TIME WE BUY A NEW VEHICLE, WE HAVE TO GET IT REEQUIPED. SO IT'S GOING--. [INAUDIBLE] PUBLIC WORKS VEHICLES GOING TO NEED SOME LIGHTING ON THE OUTSIDE, WHICH I DON'T THINK--. SOME SAFETY LIGHTING. I'M NOT SURE YA'LL NECESSARILY HAVE TODAY, BUT WE WOULD RECOMMEND PUTTING SOME SAFETY LIGHTING ON THE OUTSIDE OF THE VEHICLES, SOME STROBES THAT SORT OF THINGS. SO I BUDGETED TO REPLACE THAT EVERY TIME. ON THE POLICE VEHICLE SIDE, WE BUDGETED ALMOST $20,000 ON THE PATROL VEHICLES FOR EQUIPMENT. NOW, SOME OF THAT EQUIPMENT CAN BE REUSED IN THE FUTURE, WHICH WOULD CREATE MORE POTENTIAL SAVINGS, AND THEN THERE'S SOME OTHER EQUIPMENT THAT [INAUDIBLE] POTENTIALLY RECYCLED, BUT WHEN I'M BUILDING AN ANALYSIS LIKE THIS, I CAN'T NECESSARILY PROJECT THAT WE CAN REUSE THE EQUIPMENT. I HAVE TO PROJECT THAT WE'RE GOING TO NEED TO BUY IT NEW EVERY TIME JUST BECAUSE WE DON'T KNOW WHAT'S GOING TO HAPPEN WITH THE MANUFACTURER REDESIGNS IN THE FUTURE. THIS IS THE YEAH, SO YOU'RE GOING TO SEE A HIGHER SAVINGS NUMBER BECAUSE WE DON'T HAVE--. BECAUSE IF THE CITIES VEHICLES--. [INAUDIBLE] CITY WAS TO GROW ITS FLEET, NOT PARTNERED WITH US, YOUR AVERAGE ANNUAL FLEET BUDGET WOULD INCREASE AS WELL, BUT IN THE PREVIOUS ANALYSIS, I'M COMPARING YOUR CURRENT FLEET BUDGET BASED ON THE CURRENT FLEET SIZE THAT THE CITY HAS TODAY COMPARED WITH INCREASING YOUR FLEET SIZE. AND I DO THAT FOR A COUPLE OF REASONS. ONE, BECAUSE SEE, THIS SIZE TYPICALLY IS GOING TO HAVE SOME GROWTH NEEDS WITHIN THE CITY'S FLEET, BUT TWO, IT ALSO TELLS ME HOW SUSTAINABLE IS THIS OVER A LONG PERIOD OF TIME. IF I CAN BUILD GROWTH IN THERE AND STILL CREATE SAVINGS, I KNOW IT'S VERY SUSTAINABLE. THAT'S WHY YOU SEE EVEN A LARGER COST SAVINGS INCREASE BY KEEPING THE FLEET THE SAME SIZES AS IT IS TODAY. IT'S BECAUSE WE DON'T HAVE THOSE FOUR ADDITIONAL VEHICLES BUILT INTO THE MIX. TWO OF THOSE ADDITIONAL VEHICLES BEING PATROL VEHICLES, WHICH HAVE A HIGHER OUTFITTING COST TO THEM THAT WE HAVE TO ABSORB WITHIN THE ANALYSIS, THAT'S WHY YOU SEE THAT BIG JUMP IN THE [INAUDIBLE] SAVINGS. SO, [INAUDIBLE] OTHER CITIES THAT HAVE DONE THIS FOR THAT LENGTH OF TIME? YES. I MEAN, WE'VE BEEN IN THE MARKETPLACE IN TEXAS FOR A COUPLE OF DECADES NOW. I MEAN, THROUGHOUT THE METROPLEX, I MEAN, I'D SAY IN THE LAST FIVE YEARS HAD SPREAD TREMENDOUS GROWTH IN THE NORTH TEXAS MARKET, BUT ONE OF OUR OLDEST CITIES AND WE WORK WITH EVERYBODY FROM SMALL LOCAL MUNICIPALITIES ALL THE WAY UP TO YOUR CITY OF CHICAGO'S OF THE WORLD THAT WE WORK WITH. SO JUST KIND OF GIVE YOU A SCOPE OF WHAT WE DO. IN THE STATE OF TEXAS, CITY OF HOUSTON IS OUR BIGGEST MUNICIPALITY WORK WITHIN STATE TODAY. I GOT A QUESTION. YES MA'AM? CONSIDERING THAT THE COST OF EVERYTHING IS GOING UP, SO WHATEVER YOU'RE PROJECTING A YEAR FROM NOW FOR A SIMILAR KIND OF VEHICLE, TAKING INTO ACCOUNT THE INFLATION RATES AND ET CETERA, IS THAT GOING TO AFFECT THAT OVERALL PROJECTED SAVINGS? NO, NOT REALLY BECAUSE--. $30,000-$40,000, MAYBE. A FEW YEARS AGO. RIGHT? YEAH. SO THIS ANALYSIS DOES LOOKING, KIND OF, AS SOMEWHAT OF A BUBBLE BECAUSE YOU SEE THE BASIS I'M COMPARING IT AGAINST, THAT YELLOW LINE RIGHT THERE, THAT'S YOUR CURRENT COST BASIS, AND I'M COMPARING THAT BASED ON TODAY'S DOLLARS, ASSUMING THAT THAT'S NOT INCREASED. I CAN BUILD IN A TWO OR THREE PERCENT INFLATION OF THAT OVER A PERIOD OF TIME, YOU KNOW, BUT IT'D ACTUALLY BE RELATIVE IN THE ANALYSIS AS WELL, BECAUSE IT JUST BE THE COST AVERAGING WOULD WORK OUT ON BOTH SIDES OF THINGS. [00:45:01] YOU'RE GOING TO NATURALLY HAVE VEHICLE COSTS RISE, WHETHER YOU PARTNER WITH ENTERPRISE OR YOU DON'T. SO THAT'S GOING TO INCUR--. YOU HAVE NO WAY OF AVOIDING THAT, SO TO SPEAK, BUT THE THINGS THAT WE DO HAVE THE ABILITY TO CAPITALIZE ON AS INFLATION DOES GROW IS RESALE. AND IF YOU WERE TO TALK WITH SOME OF OUR CITIES, YOU KNOW, CITY OF CORINTH HAS BEEN WITH US QUITE A WHILE NOW, THEY WOULD DEFINITELY TELL YOU THAT THE PROJECTIONS FROM A RESALE VERSUS THE REALITIES ARE ARE VERY, VERY DIFFERENT FROM EACH OTHER. [INAUDIBLE]. BUT. YEAH. SO WE SELL [INAUDIBLE]. YEAH. WELL, ONE THING IS BECAUSE OF THE WAY WE OPERATE, WE DON'T HAVE TO SELL THEM THROUGH PUBLIC AUCTION CHANNELS. WE CAN SELL THEM OUTSIDE OF PUBLIC AUCTION TO [INAUDIBLE] LOTS, SOMETIMES. FRANCHISE DEALERS ARE YOUR BIG CHEVY AND FORD HOUSES OF THE WORLD WE CAN SELL THEM TO. YOU HAVE LARGE WHOLESALERS. WE HAVE OVERSEAS BUYERS. [INAUDIBLE] ABOUT 19,00 UNIQUE BUYERS THROUGHOUT THE UNITED STATES--. [INAUDIBLE]. NO, BECAUSE NOT IN THE SAME WAY YOU ARE. NO. BECAUSE THE VEHICLES ARE TECHNICALLY TITLED IN ENTERPRISES NAME, BUT THE CITY OWNS ALL THE EQUITY IN THE VEHICLES. SO WE TURN OVER THE EQUITY TO THE CITY AS WE SELL THEM. SO YEAH, THERE WAS ANOTHER QUESTION THAT MAYBE WE WANT TO TALK ABOUT INTERNALLY HERE IS THAT--. SO I WANTED TO KNOW ABOUT THE EQUITY BECAUSE NOW WE HAVE ALL THE EQUITY AND ALL THE VEHICLES. SO THE ONLY FEAR I SEE HERE IS THAT IF YOU GO TO SOMETHING LIKE THIS, WHICH I MEAN DOES LOOK ATTRACTIVE ON THE SAVINGS PERSPECTIVE, BUT THEN IF YOU EVER WANTED TO GET OUT OF THE DEAL, ARE YOU SOMEWHAT LOCKED INTO IT NOW? BECAUSE NOW YOU DON'T HAVE BE UPSIDE DOWN BECAUSE THE EQUITY VALUE CANNOT BE THE SAME AS WHAT WE HAVE NOW OWNING ALL THE VEHICLES, I WOULD THINK. SO, THAT'S JUST SOMETHING I THINK WE NEED TO UNDERSTAND. YEAH. SO JUST TO THAT POINT, KIND OF THE OUT. NOW, I'VE BEEN DOING THIS A REALLY LONG TIME, BEEN AT ENTERPRISE 19 YEARS, I'VE [INAUDIBLE] CITY EVER LEAVE US YET, BUT LET'S SAY THAT Y'ALL ARE THE ONE THAT DECIDE YOU WANT TO DO THAT. THE VEHICLES ARE ALL ON AMORTIZATION SCHEDULE, EVEN THOUGH THEY ARE LEASED, THEY'RE AN EQUITY LEASE, WHICH MEANS THEY'RE EVENTUALLY AMORTIZE OUT AND THE LEASE PAYMENTS WILL STOP AT THAT POINT IN TIME. AND SO THE CITY CAN JUST KEEP OPERATING THEM, AND THEN WHEN YOU GO SELL THEM, YOU OWN THE 100 PERCENT EQUITY JUST LIKE YOU DO TODAY. YOU COULD TURN THEM IN AT THAT POINT, AND WE CAN SELL THEM AND YOU CAN TAKE THE PROCEEDS BACK AND GO BUY NEW VEHICLES WITH IT. YOU HAVE A LOT OF OPTIONS AS FAR AS THAT GOES. IF THAT EVER DID COME TO FRUITION, LIKE, HEY, WE DON'T WANT TO DO THIS ANYMORE. YOU KNOW, I'M JUST TRYING TO THINK THERE HAS TO BE SOME DRAWBACK THERE, BECAUSE WHY WOULD YOU DO THIS IF YOU'RE GIVING US THE EQUITY OF THE VEHICLES AND THERE'S ALL THE BENEFIT, I'M TRYING TO UNDERSTAND--. WHERE ENTERPRISE MAKES THIS MONEY, MAYBE? WOULD THAT BE A GOOD QUESTION TO ASK? I THINK. SO, ENTERPRISE MAKES MONEY REALLY TWO [INAUDIBLE] WAYS. ONE, WITHIN THAT LEASE PAYMENT IS OUR MANAGEMENT FEE, WHICH PAYS FOR ENTERPRISE TO DO IT DO ITS JOB, WHICH IS ABOUT 0.1 PERCENT OF THE COST OF A VEHICLE. SO ABOUT $30,000 DOLLARS VEHICLE, YOU'RE PAYING ME THIRTY BUCKS A MONTH TO MANAGE THAT INDIVIDUAL VEHICLE. DOESN'T SOUNDS LIKE A LOT, [INAUDIBLE] COUPLE MILLION VEHICLES EVENTUALLY BECOMES REAL MONEY, YOU KNOW? AND TWO, WE GET MONEY FROM THE MANUFACTURERS ON A VERY LARGE SCALE. IF WE BUY A HALF MILLION CHEVROLET THIS YEAR, WE GET MONEY FROM MANUFACTURERS, THOSE THE TWO PRIMARY AREAS. IF THINGS WORK REALLY WELL, WE HOPEFULLY MAKE A LITTLE BIT OF MONEY ON INTEREST, WHICH IS WITHIN THE LEASE PAYMENT ALSO, IF THINGS GO WELL. INTEREST IS A LITTLE FUNNY RIGHT NOW BECAUSE WHAT THE FEDS DOING WITH IT. SO IS ENTERPRISE OPERATING AS A DEALER? NO, WE'RE NOT A DEALERSHIP, WE ARE A FLEET MANAGEMENT COMPANY. SO WE'RE NOT--. SO YOU BUY UNDER THE FLEET PROGRAM, DO ALL OF THE DIFFERENT GROUPS, AND SO YOU MAKE THE REBATES ON THAT SIDE AS WELL, WHICH THAT EQUITY BELONGS TO? NO, NO. IT GOES BACK TO CITY OWNS 100 PERCENT OF THE EQUITY. WELL, BUT I'M SAYING THE REBATES THAT COME BACK, THOSE BELONG THOSE ARE YOUR INCENTIVE TO SELL THE VEHICLES? NO, THOSE GO BACK TO THE CITY AS WELL. THAT'S HOW WE'RE ABLE TO--. THE WAY WE ACQUIRE MOST VEHICLES IS DIRECTLY THROUGH THE MANUFACTURER, THROUGH THE GOVERNMENT BUY CHANNELS AT THE MANUFACTURER DIRECT LEVEL, AND SO WE TAKE ADVANTAGE OF THE GOVERNMENT REBATE PROGRAMS THROUGH THAT. AND THE CITY OWNS ALL THOSE REBATES, WE CAN'T KEEP THEM. AND THEN ONE QUESTION THAT I'VE GOT FOR YOU JUST REAL QUICK. I'M LOOKING AT LIKE 2027, WE HAVE 10 NEEDS, WHICH MEANS WE'RE SELLING OFF 10 VEHICLES IN THIS THEORY? YES. SO WE ORDERED 10 VEHICLES FROM ENTERPRISE, 10 VEHICLES SHOW UP, AND I'M JUST MAKING UPDATES NOW, 10 VEHICLES SHOW UP IN AUGUST. WE HAVE TO GET THOSE OUTFITTED, WE SEND YOU OUR 10 VEHICLES, I'M ASSUMING AT THAT POINT WE ARE PAYING ON THE 10 VEHICLES THAT HAVE HIT THE GROUND THAT ARE BEING OUTFITTED AND THE 10 VEHICLES WE GIVE TO YOU TO GO SELL OFF, YES? NO. YOU DON'T PAY FOR THE VEHICLES TILL THEY LAND HERE, READY TO GO TO WORK. RIGHT, BUT WHEN THEY LAND HERE, WE'VE GOT TO HAVE TIME TO OUTFIT THEM SO WE OWN THEM--. WE'RE HANDLING THE OUTFITTING FOR YOU, SO--. OK. SO THEY'RE ALREADY OUTFITTED. GOT IT. OK. UNLESS Y'ALL WANT--. NOW, IF Y'ALL WANT TO DO IT YOURSELF, THEN YEAH. ONCE WE TAKE DELIVERY OF IT, THEN Y'ALL WOULD PAY FOR IT IF Y'ALL DECIDE YOU WANT TO [00:50:03] HANDLE IT YOURSELF. AND WE CONTINUE TO PAY THE LEASE ON THE VEHICLES, WE TURN INTO YOU UNTIL THEY SELL? NO, WE STOP BILLING IT THE MINUTE WE TAKE POSSESSION OF THEM. SO THAT'S ANOTHER THING, TOO, IN THE OVERALL, YOU TALKED ABOUT HAVING THE GOVERNMENT VERY LOW PURCHASE. SO THAT'S ONE THING THAT YOU BENEFIT FROM, RIGHT? NO, THE CITY BENEFITS FROM THAT, NOT ENTERPRISE. CAN YOU GO OVER THE FLEET MAINTENANCE AND STUFF LIKE THAT? YEAH, FOR SURE. SO WITHIN THIS PROGRAM IS OUR MANAGEMENT OF THE MAINTENANCE REPAIR PROCESS AS WELL. SO ALL THE NEWLY ACQUIRED VEHICLES THAT ENTERPRISE ACQUIRES THAT ARE NON PATROL VEHICLES, THOSE GO UNDER WHAT'S CALLED A FIXED COST MAINTENANCE PROGRAM. THAT'S ONE WAY WE'RE ABLE TO HIT SOME OF THE SAVINGS IN TERMS OF THE MAINTENANCE AND REPAIR PROJECTED SAVINGS WITHIN THE ANALYSIS. SO WE PROVIDE A GUARANTEED FIXED COST OF MAINTENANCE REPAIR FOR MONTH ONE THROUGH MONTH WHATEVER THAT THE CITY'S OPERATING THE THOSE VEHICLES, AND SO ENTERPRISE ASSUMES THE RISK ON THOSE VEHICLES. FOR THE PATROL VEHICLES, THE CITY IS GOING TO PAY AS YOU GO ON THOSE. SO IF A VEHICLE GOES IN THE SHOP AND THE SHOP BUILDS THOSE 50 BUCKS, WE'RE GOING TO PASS THAT BACK THROUGH TO THE CITY, BUT WE THE CITY IS GOING TO UTILIZE OUR LOCALLY CONTRACTED SHOPS THAT WE WORK WITH TO HANDLE THE MAINTENANCE AND REPAIR. PART OF OUR JOB IS [INAUDIBLE] EVEN THE EXISTING FLEET. UNTIL WE THEY DO GET REPLACED, WE WILL [INAUDIBLE] MANAGING THE MAINTENANCE REPAIR PROCESS ON THOSE. SO [INAUDIBLE] WE'RE ADDING COST LABOR, COST PARTS, ALL THAT AND IT RUNS THROUGH OUR SYSTEM. AND THEN HOW'S THAT NETWORK, IS IT PRETTY EXTENSIVE? SO WE'RE CONTRACTED WITH EVERYBODY FROM LOCAL YOKEL SHOP ALL THE WAY UP TO YOUR BIG NATIONAL FRANCHISE. WE HAVE, I MEAN, I THINK JUST AROUND THIS AREA HERE, WE'LL HAVE ONE HUNDRED AND SOMEWHAT OF THEM JUST IN THE--. I JUST WANTED TO MAKE SURE THAT WE HAD ACCESS POINTS THAT WERE CLOSE SO THAT YOU DIDN'T HAVE VEHICLES THAT WERE OUT OF-- A HUNDRED AND TWENTY ONE OF THEM LOOKS LIKE. YEAH, I THINK WE EVEN CLICKED ON A FEW LAST TIME I WAS-- CALIBER COLLISON. YEAH, THAT'S WHAT I WANTED TO SEE. I JUST WANTED TO SEE IF IT WAS A NICE PORTFOLIO OF DIFFERENT ONES AND IT APPARENTLY IS. [LAUGHTER] YEAH. [LAUGHTER] UNDERSTAND WE--. SO, ENTERPRISE ALSO OWNS A MILLION VEHICLES ITSELF. WE'RE A FAMILY OWNED COMPANY, BELIEVE IT OR NOT, AND SO WE HAVE [INAUDIBLE] THE FAMILY OWNS ANOTHER MILLION RENTAL CARS THAT WE HAVE TO MANAGE. WE HAVE TO BE ABLE TO SUPPORT THAT INFRASTRUCTURE WITH A PRETTY VAST NETWORK OF REPAIR FACILITIES. THAT'S ONE REASON WE HAVE SO MANY. [INAUDIBLE] TESLA FOR--. ELECTRIC CARS. OH, SO WE DO HAVE A LARGE ELECTRIFICATION PROJECT GOING ON, NOT JUST WITH TESLAS, BUT WE HAVE A LOT OF THINGS, THEY'RE CALLED POLESTARS ARE GOING IN THE SERVICE NOW TO. NOW, ELECTRIFICATION, I THINK I TOLD YOU ALL THIS LAST TIME, FIVE YEARS FROM NOW YOU'RE GOING TO HAVE ELECTRIC VEHICLES OUT THERE OPERATING. IT'S COMING. IT'S SOMETHING THAT WE SHOULD THINK ABOUT IN THE FUTURE. I DON'T KNOW IF IT'S THE RIGHT TIME. [INAUDIBLE] NO--. NO, WE DID, BUT--. WE DO, BUT THAT'S LIKE ONE LITTLE SMALL SECTOR OF EVERYTHING WE'RE DOING FOR ELECTRIFICATION. AS FAR AS THE MAINTENANCE GOES FOR THESE, OUR CURRENT IN-HOUSE VEHICLES THAT WE OWN BECAUSE WE'LL OWN SEVERAL OF THOSE BASED ON YOUR SCALE THROUGHOUT THE TERM OF THIS, BECAUSE WE'RE SLOWLY KIND OF RELEASING THEM, DO WE HAVE TO GO THROUGH YOUR PEOPLE FOR THE MAINTENANCE ON OUR OWN VEHICLES? WHEN WE SIGN UP, IS IT AN ALL OR NOTHING? YOU DON'T HAVE TO, BUT MOST CITIES DO, BECAUSE THEN WE'RE GOING TO START, EVEN ON THE EXISTING FLEET, WE'RE GOING TO START TRACKING COST OF MAINTENANCE. SO IN THE FUTURE, WE'RE GOING TO REALLY PART OF WHAT YOU'RE HIRING FOR IS TO MANAGE THE FLEET AND PROVIDE ANALYTICS INTO THE FUTURE, AND PART OF THAT'S REALLY GOOD DATA CAPTURE . BECAUSE I'M GOING TO WANT TO KNOW THIS VEHICLE, WHAT DID I SPEND LAST MONTH, LAST YEAR, LOST A DATE ON A VEHICLE. BY RUNNING IT THROUGH US, WE GET THAT DATA CAPTURE ON IT AND THEN TWO, IT ALSO ALLOWS US TO PUSH OUT MAINTENANCE AND REPAIR, RECORD ALERTS, EVERYTHING VIA OUR WEBSITE OR VIA THE MOBILE APPLICATION RIGHT THERE. SO IF YOU DO RUN THE FLEET THROUGH US, IT'S--. YOU DON'T REALLY SAY ANYTHING BY NOT RUNNING IT THROUGH US. YOU ACTUALLY END UP PROBABLY SPEND MORE MONEY BECAUSE YOU DON'T HAVE OUR NEGOTIATED RATES, BUT YOU CAN JUST KEEP ON MANAGING THOSE. AND WHAT BRANDS DO WE COMMIT TO FOR THIS? DO WE GET A CHOICE ON BRANDS OR DO YOU ALL JUST KIND OF NOW WE'RE GOING TO PROVIDE RECOMMENDATIONS. PART OF OUR JOB IS YOU'RE HIRING US TO PROVIDED, SAY, SHOULD YOU RUN A CHEVY, SHOULD YOU RUN A FORD SHOW, YOU RUN A RAM? WE'RE GOING TO PROVIDE THAT ANALYSIS AND SAY, HEY, HERE'S YOUR LOWEST COST OF OWNERSHIP VEHICLE. BUT THE CITY IS LIKE, NO, HEY, NO, BY GOD, I WANT TO DRIVE A FORD, AND THAT'S WHAT I WANT TO DRIVE. THAT'S OK. AND THAT'S NOT GOING TO HURT OUR FEELINGS ONE IOTA. OUR JOB IS JUST TO PROVIDE THE ADVICE AND THEN WE TAKE OUR MARCHING ORDERS FROM Y'ALL. AND SO WHAT IS THE FIXED COST MAINTENANCE PER VEHICLE? YOU KNOW, IF YOU GO BACK TO ANALYSIS, THE TOTAL PROJECTED, INCLUDING THE EXISTING FLEET [00:55:05] AND THE NON FIXED COST, I THINK, [INAUDIBLE] INCLUDING FUEL, WE HAVE OBJECTED TO OPERATING EXPENSE COSTING OF $69,000 IN THE FIRST YEAR IN COMPARISON TO CURRENT OF $81,000. SO YOUR AVERAGE FIXED COST MAINTENANCE PROGRAM, IT'S PROBABLY SOMEWHERE BETWEEN $30 TO $45 BUCKS PER VEHICLE PER MONTH. SOMEWHERE IN THAT GENERAL RANGE. JUST IT VARIES BY VEHICLE, BY TYPE, HOW LONG WE'RE HOLDING IT FOR. THERE'S A LOT OF FACTORS. [INAUDIBLE]. CORRECT. WHICH THAT INCLUDES FUEL AS WELL IN THAT PROJECTION, BECAUSE YA'LL, RIGHT NOW, YOUR CURRENT AVERAGE ANNUAL OPERATING EXPENSES RIGHT AROUND $81,000. ANOTHER QUESTION WITH RESPECT TO THE TYPE OF VEHICLE WE SELECT, WILL YOU PROVIDE THE DIFFERENCE IN COST OF EACH OF THOSE SO WE WOULD BE HAVING THAT INFORMATION TO HELP MAKE THE DECISION AS TO--. SO BEYOND--. COST BENEFIT ON ALL DIFFERENT ANGLES? SO ONCE THE CITY DOES PARTNER WITH US, YOU ASSIGN ACCOUNT MANAGEMENT TEAM AND ONE OF THEIR JOBS IS TO DO WHAT'S CALLED 'RIGHT TERM, RIGHT TYPE' ANALYSIS EVERY YEAR WHEN WE LOOK AT ALL THE VEHICLE TYPES. WE ALSO LOOK AT, HEY, WHAT ARE YOU RUNNING TODAY? DO WE NEED TO RUN A ONE TON, CAN WE RUN A THREE QUARTER TON [INAUDIBLE], REALLY PROVIDE ALL THOSE ANALYSIS, PRESENT THAT TO CITY MANAGEMENT AND THEN CITY MANAGEMENT GETS WITH DEPARTMENT HEADS, EVERYBODY COMES TO CONSENSUS, AND THEN WHAT EVERYBODY DECIDES, THEY TELL US WHAT TO DO, WE GO OFF AND WE EXECUTE UPON THERE. I'LL SAY TO THE TESLA COMMENT EARLIER, THERE IS SOME ELECTRIFICATION OPTIONS IN THE POLICE SIDE OF THINGS THAT IS VIABLE. I MEAN, IT'S NOT VERY WELL TESTED RIGHT NOW, BUT IF THAT'S SOMETHING YOU WANT TO DO, I WOULD SAY LET'S TALK THREE YEARS FROM NOW, THOUGH. [LAUGHTER] YEAH. IF YOU DIDN'T FEEL IT, THE CHIEF WAS STARED INTO THE BACK OF YOUR HEAD AS YOU STARTED THAT CONVERSATION. [LAUGHTER] YEAH. SMART CAR, IS THAT WHAT [INAUDIBLE] DECIDE LAST TIME? YEAH. [LAUGHTER] YEAH, NOT JUST YET. WE'LL GET THERE, I PROMISE. THEY'RE TRYING. WELL, I THINK AT THE END OF THE DAY, THE MORAL OF THE STORY HERE IS IT'S REALLY ALL ABOUT BEING PROACTIVE AND CONSISTENT AND CREATING SOME STABILIZATION IN YOUR BUDGET. AND THAT'S REALLY WHAT WE'RE TRYING TO ACHIEVE BY PARTNERING WITH ENTERPRISE. WE'RE NOT NECESSARILY SAYING THIS EXACTLY WHAT THE CITY'S GOT TO DO, BUT IT ALLOWS US TO EXECUTE UPON A PLAN SUCH AS THIS BASED ON Y'ALL'S CONSENSUS. SO WHAT IS THE--. ARE THERE TERMINATION FEES IN YOUR CONTRACT, IF WE TRY THIS FOR A YEAR, DECIDE WE DON'T LIKE IT AND WE WANT YOU TO SELL OUT ALL OF YOUR VEHICLES? OR ARE THERE ANY HIDDEN TURN IN FEES OR ANYTHING LIKE THAT, LIKE A TRADITIONAL LEASE? NO, THESE ARE OPEN ENDED EQUITY LEASES. THE REASON THEY'RE CALLED OPEN ENDED IS BECAUSE THEY CAN [INAUDIBLE] POINT IN TIME. IT'S JUST LIKE WITH ANY--. THEY'RE REALLY JUST FINANCES. SO, AT EVERY POINT IN TIME THERE'S A PRINCIPAL BALANCE DUE IT'S TICKING DOWN EVERY SINGLE MONTH, AND SO AT ANY POINT IN TIME, THERE'S THE PRINCIPLE VERSUS WHAT'S THE VEHICLE WORTH IN THE OPEN MARKETPLACE? SO I WOULD SAY, YOU KNOW, A YEAR DOWN THE LINE, THE CITY IS LIKE, THIS IS WHAT WE WANT TO DO ANYMORE. MOST LIKELY WHAT YOU WOULD DO, IF THAT WAS TO OCCUR, YOU JUST KEEP OPERATING THE FLEET, LET IT AMORTIZE OUT, AND THEN THEY'LL QUOTE UNQUOTE PAY OFF, AND THEN YOU CAN JUST KEEP THEM OR SELL-- YEAH. AND TURNING THEM IN. LIKE I SAID, I'VE NEVER SEEN IT HAPPEN, BUT I ASSUME THAT'S WHAT WOULD GO DOWN. AMORTIZING THESE OUT FOR IT, BUT SAY 12 MONTHS FROM NOW, WE DECIDE THIS TAHOE IS THE ONLY ONE WE'VE GOTTEN. WE'RE DONE WITH ENTERPRISE. IT DIDN'T WORK FOR US, BUT WE WANT IT. CAN WE PAY IT OFF EARLY AND NOT HAVE TO PAY THE INTEREST? CORRECT. OK. YEAH. I MEAN, WE HAVE SOME CITIES THAT IF YOU'RE IN A--. YOU HAVE A VERY WELL-FUNDED VEHICLE EQUIPMENT REPLACEMENT FUND THAT WILL SELF-FUND THIS OR WE'RE NOT ACTUALLY QUOTE UNQUOTE LEASING, CITY OF KELLER IS EXAMPLE OF CITY THAT DOES THAT, I WOULD SAY IT'S A VERY SMALL, I MEAN, LESS THAN FIVE PERCENT OF OUR MUNICIPAL SPACE ACTUALLY DO THAT. AND THE REASON WHY IS BECAUSE THE IMPLEMENTATION, BECAUSE YOU NOTICE, WE'RE LIKE IN THIS ANALYSIS AND THEN IF WE'RE HAVING GROWTH PROJECTED, WE GOT 11 TO 15 VEHICLES WE NEED TO ACQUIRE IN THE FIRST YEAR. AND THE CITY MIGHT BE ABLE TO FUND THAT MANY VEHICLES, BUT IT'S NEVER BOUGHT THAT MANY VEHICLE BEFORE IN THE PAST, AND NUMBER TWO, IF YOU DID HAVE THAT MUCH MONEY, YOU MIGHT ALSO ZAP YOUR BUDGET FOR OTHER THINGS. YOU MIGHT NEED SOME EQUIPMENT OR THINGS OF THAT NATURE, AND THAT'S WHY MOST CITIES USE A FUNDING MECHANISM. IT JUST ALLOWS THEM TO GET THE PROGRAM STARTED PROPERLY WITHOUT HAVING TO HAVE MAJOR CAPITAL IMPACT. EXACTLY. THAT'S WHAT I WAS WORRIED ABOUT THE UPFRONT COST AND THEN THE ACTUAL, YOU KNOW, GETTING OFF OF THE ACTUAL PURCHASE PROGRAM, I THOUGHT THERE'D BE A BIG BUMP THAT YOU HAVE TO DO, BUT ESSENTIALLY YOU'RE FINANCING IT UP FRONT FOR US. YEAH, ENTERPRISE IS SELF-FUNDING IT THROUGH OUR FINANCE CHANNELS. ENTERPRISE IS THE LEASER AND WE WRITE ALL THE PAPER. [01:00:09] AND WE WERE BRINGING [INAUDIBLE] CHIEF, AND GARY BROUGHT THIS TO ME, I BROUGHT IT TO THE MAYOR AND MICHAEL AND CINDY JUST BECAUSE I KNOW THEY'VE BEEN BIG ON THE FLEET AND WE KIND OF BROUGHT THIS TO YA'LL NOW TO KIND OF LOOK THROUGH, AND, YOU KNOW, JUST IF YOU HAVE QUESTIONS OR ANYTHING, YOU KNOW, THERE'S NO ACTION ITEM TODAY ON THIS. IF YOU HAVE QUESTIONS, LET US KNOW THAT WAY WE CAN GET WITH NICK OR WE CAN GET WITH OTHER CITIES. GET THEIR FEEDBACK ON IT. I KNOW MICHAEL'S ASKED ME--. I TALKED TO THE CITY OF CORINTH. I'VE GOT MESSAGES FROM THEIR MANAGER THERE, BUT WHAT THEY WERE SPENDING ON POLICE VEHICLES ALONE, THEY ARE NOW JUST SPINNING ON THE WHOLE ENTIRE FLEET FOR THE CITY. SO. MODEL SEEMS INTERESTING TO ME. I REACHED OUT TO ONE CITY THAT I'VE WORKED WITH, THAT I HAPPEN TO KNOW THEIR CITY MANAGER, WHO IS MORE BRUTAL THAN ANY PERSON I'VE EVER MET WHEN IT COMES TO PENNY PINCHING, ZND HE ACTUALLY SAID HE WAS SHOCKED. HE WAS SKEPTIC AND IT WORKED OUT FOR THEM. AND, YOU KNOW, THERE HAVE BEEN A FEW LITTLE BUMPS THAT THEY JUST DIDN'T REALIZE, BUT OVERALL, THE PROGRAM HAS MORE THAN EXCEEDED WHAT WAS PROPOSED. YOU KNOW, MY CONCERNS ARE THE FUTURE. WE DON'T KNOW THE EQUITY PLAYS IN THE FUTURE. WE DON'T KNOW HOW THE MARKET IS GOING TO RUN. WE DON'T KNOW, YOU KNOW, WHAT'S GOING TO HAPPEN. BUT I GUESS WE DON'T KNOW THAT WITH OUR CURRENT FLEET BECAUSE MY CONCERN IS YOURS. RIGHT NOW WE HOLD THE EQUITY, BUT HOW MUCH EQUITY DO WE HAVE IN A 13 YEAR OLD F-150 THAT'S GOT SEVEN MILLION MILES ON IT, THAT, YOU KNOW, THE PUBLIC WORKS GUYS HAVE GOTTEN IN AND OUT OF MUDDY AND DIRTY? SO WE PROBABLY DON'T HAVE A WHOLE LOT BECAUSE IT'S A DEPRECIATING ASSET ANYWAY. WELL, AND THE OTHER THING IS THAT WAS MY OTHER CONCERN WAS THAT YOU GET EQUITY IN THE VEHICLE AS YOU PAY FOR IT THROUGH THE LEASE. SO IT'S ALMOST LIKE YOU'RE FINANCING THE VEHICLE, BUT THEN YOU HAVE THE EQUITY IN THE LONG RUN ANYWAY AND THROUGH THEIR FLEET SERVICE, BECAUSE OF THE VERY AGGRESSIVE PURCHASE PRICE, IT SOUNDS LIKE YOU'RE PRETTY MUCH EVEN AT THE END ANYWAY. SO. VERY INTERESTING. YEAH, IT SOUNDS LIKE WE GET QUITE A BIT OF OUR MONEY BACK IF WE DO THIS, WE'D BE SWAPPING VEHICLES FREQUENTLY. SO HOPEFULLY THAT, BUT I'M GUESSING WE AREN'T BOUND BY THAT. I KNOW YOU HAVE A PROCESS THAT SAYS 12 MONTHS, WE HAVE TO SWITCH OUT A PUBLIC WORKS TRUCK. WELL, WE DON'T ACTUALLY HAVE TO DO THAT? WE COULD--. NOW, WE'LL SHOW YOU THE ERROR IN YOUR WAYS IN TERMS OF, YOU KNOW, FINANCIAL ANALYTICS IN THE FUTURE IF YOU WANT DIVERT FROM THE DECISION AND WHAT THE ANALYSIS IS TELLING US TO DO . BECAUSE WE'RE GOING TO TRY TO--. WE WANT TO HIT AND EXCEED ANY OF THESE PROJECTIONS EVERY TIME BECAUSE WE WANT REALLY GOOD STORIES. EVERY SINGLE YEAR, WE COME BACK TO THE COUNCIL AND TALK ABOUT WE LIKE TO PAT OURSELVES ON THE BACK. SO IF WE DIVERT FROM THE PLAN, YOU KNOW, WE'RE GOING TO SHOW, HEY, HERE'S THE I MEAN, OBVIOUSLY, WE COULD HAVE NEWER VEHICLES WITHOUT ANY MORE COST, I MEAN, THAT'S A NO BRAINER, RIGHT? WELL, YOU FIGURE FUEL SAVINGS, MAINTENANCE, DOWNTIME, BUT WHAT ABOUT GETTING THE CHIEF A SMART CAR? [LAUGHTER] THAT'S SOMETHING--. LIGHTNING TRUCK. [LAUGHTER] SO THIS INCLUDES, THOUGH, ALL OF OUR MAJOR VEHICLES, SO ALL THE FIRE APPARATUSES ARE NOT INCLUDED, THE--. I DON'T THINK YOU PUT THE BRUSH TRUCK ON HERE? NO, WE CAN DEFINITELY ADD THE BRUSH TRUCK IN. ARE THOSE--? THE ONLY ONES WE DON'T HAVE ON THE REPLACEMENT SCHEDULE ARE THE ACTUAL FIRE APPARATUSES, I DON'T HAVE THE BRUSH TRUCK ON THE SCHEDULE. NOW, WE DON'T EVER TOUCH FIRE APPARATUSES, BUT WE DO BRUSH TRUCKS PRETTY FREQUENTLY. TYPICALLY, WHAT HAPPENS WITH THOSE, THOUGH, WE TEND TO CHANGE OUT THE CHASSIS PORTION OF IT AND THEN REUSE THE SKID UNIT THAT'S ON THE BACK, THAT LITTLE FLATBED JOB ALL THAT STUFF SITS ON, IT GETS TRANSFERRED BETWEEN VEHICLES BECAUSE THAT CAN BE A $100,000-$200,000 PIECE OF EQUIPMENT SITTING ON THE BACK OF THAT. AND WE WANT TO JUST REUSE THAT BECAUSE IT DOESN'T HAVE AN INHERENT RESALE VALUE, AND THEN YOUR VAC TRUCK THAT WHEN YOU BOUGHT FOR TWENTY FIVE BUCKS, I TOLD YOU, I'D GIVE YOU 50 BUCKS FOR IT RIGHT NOW, [LAUGHTER] ANY DAY OF THE WEEK, DOUBLE YOUR MONEY. BUT I DON'T HAVE THAT ONE IN THE SCHEDULE. YOU KNOW, IT MIGHT BE AT SOME POINT IN TIME YOU'LL WANT TO REPLACE THAT OR DO SOMETHING. MAYBE YOU CAN FIND ANOTHER ONE FOR THIRTY FIVE DOLLARS BECAUSE OF INFLATION, BUT [LAUGHTER]. YOU KNOW, THOSE ARE ONES I DON'T TYPICALLY PUT ON SCHEDULE, BUT WE WILL MANAGE YOUR OPERATIONAL EXPENSES IN THE INTERIM PERIOD OF TIME JUST TO MAKE SURE WE'RE TRACKING THEM BECAUSE SOMETIMES THOSE REALLY OLD VEHICLES THAT ARE REALLY CHEAP TO BUY, SOMETIMES THEY HAVE WHAT I CALL THE THOUSAND START. YOU GO OVER THERE TRY TO START, DOESN'T DO IT AND WE DUMP A THOUSAND BUCKS INTO IT, AND IF WE DO THAT ENOUGH TIMES, THAT MAYBE IT MAY OR MAY NOT MAKE SENSE TO EITHER HAVE THAT VEHICLE OR MAYBE EVEN LOOK AT RENTING THAT TYPE OF VEHICLE THROUGH EQUIPMENT COMPANY RATHER THAN OWNING ONE. SO THOSE ARE ALL CONSIDERATION POINTS WE'LL HELP BRING TO THE TABLE. I'M DEFINITELY INTERESTED IN TALKING ABOUT THIS MORE BECAUSE, I MEAN, IT ALMOST SOUNDS [01:05:01] TOO GOOD TO BE TRUE, WHICH USUALLY MAKES ME HESITANT, BUT--. [INAUDIBLE]. WELL, MAYBE IT'S LIKE THE MOB YOU ONLY GET AT ONE WAY. [LAUGHTER] IT'S YOU CAN GET OUT, BUT THERE'S ONLY ONE WAY OUT. YEAH. BUT I WAS WONDERING, ARE WE ABLE TO GET A COPY OF THIS JUST SO THAT WE CAN LOOK THROUGH THE--? I'LL SEND ALL THE DOCUMENTS TO YOU. PLEASE. YEAH. AND I WOULD LIKE TO ASK CHIEF BROOKS AND CHIEF SHEFF YOUR THOUGHTS? YEAH. DID YOU HAVE ANY, YOU KNOW, WHAT ARE YOUR OVERALL THOUGHTS OF THIS PROGRAM AND YOUR, YOU KNOW, YOUR COMMENTS? CENTRAL. THE CITY HAS NOW REACHED CRITICAL MASS [INAUDIBLE] YOU'LL MAKE [INAUDIBLE]. SO THERE IS A PROFIT [INAUDIBLE] TO WHAT THEY'RE DOING. THEY'RE MAKING THEIR MONEY, AND MY FEELING IS THE CITY IS SAVING SOME MONEY AT THE SAME TIME. SO, FROM MY PERSPECTIVE, IF I CAN TAKE MY TWO VEHICLES AND REPLACE THEM EVERY COUPLE OF YEARS, RIGHT NOW WE HAVE [INAUDIBLE]. I'M EXTREMELY ENCOURAGED, MAINLY BECAUSE THE FLEET GETS MANAGED. IF WE HAVE A MECHANISM IN PLACE THAT REPLACES A POLICE CAR EVERY THIRTY SIX THOUSAND ISH MILES OR KEEPING THAT CAR UNDER WARRANTY, WE HAVE SOME RATHER FIXED COST, [INAUDIBLE] WE'RE DRIVING AT [INAUDIBLE]. THERE'S NO CONTROVERSY OF REPLACING THAT BECAUSE IT'S IN THE PLAN. WE'VE THOUGHT ABOUT IT 30 YEARS FROM NOW, AND THIS IS HOW [INAUDIBLE] GOING TO EXECUTE THAT PLAN. AND I'M VERY ENCOURAGED, SAFETY WISE, MONEY WISE, AND THE OFFICERS ARE GOING TO BE DRIVING SOMETHING THAT WE CAN DEPEND ON, AND I ALSO THINK GETTING THIRTY SIX ISH THOUSAND MILES OUT OF A POLICE CAR IS GOING TO [INAUDIBLE]. ALL THOSE ISSUES AND WHO GET TO LEVERAGE THEIR HUGE CONTRACTS OF MAINTENANCE, PURCHASE PRICE, ALL OF THOSE THINGS THAT WILL HELP US IN THE LONG RUN TO BE ABLE TO HAVE MORE MONEY TO SPEND ON THE THINGS THAT [INAUDIBLE] OVER THAT 10 YEAR PERIOD. [INAUDIBLE] LOOK AT SAVING $400,000 DOLLARS, YOU'RE TALKING ABOUT JUST [INAUDIBLE]. [INAUDIBLE] TALKING ABOUT A FIRE TRUCK, YOU KNOW, THIS PROGRAM CAN POTENTIALLY [INAUDIBLE] FIRE TRUCK AND ANY COMPANY CAN DO SOMETHING LIKE THAT. I'M VERY EXCITED ABOUT TAKING THE MILLION PLUS POWER AND USING THAT FOR OUR BENEFIT. SO EXTREMELY [INAUDIBLE]. THREE KIND OF TALKING POINTS. ONE, I MEAN, THING THAT A LOT OF CITIES MAY OR MAY NOT CONSIDER IS EMPLOYEE MORALE. I DO BELIEVE THERE IS SOMETHING TO EMPLOYEES DRIVING NEWER, WELL-MAINTAINED VEHICLES. IT MAKES THEM FEEL, I MEAN, IN A VERY DIFFICULT HIRING MARKET, AS IT IS RIGHT NOW, IT'S EVEN HARDER FOR A SMALL MUNICIPAL GOVERNMENT TO TRACK [INAUDIBLE] HIRE, RETAIN QUALITY EMPLOYEES. THIS IS JUST ONE OTHER THING, AND ALMOST [INAUDIBLE] TO YOUR POINT IN REGARDS TO THE EXTREME MARKET CONDITIONS, RIGHT NOW [INAUDIBLE] CONDITIONS ARE WHAT THEY ARE RIGHT NOW. THE CITY HAS NO ABILITY TO TAKE ADVANTAGE OF THE MARKET CONDITIONS BECAUSE YOU DON'T HAVE THE ABILITY TO GO OUT THERE AND JUST RAPIDLY GO AND SELL VEHICLES OR REACT TO WHAT'S GOING ON IN THE MARKETPLACE, BECAUSE EVERYTHING IS SO CAPITAL DRIVEN YOUR DECISION TO REPLACE IS, WHICH IS NOT WRONG, BUT JUST HOW MOST OF THESE TEND TO OPERATE. THIS IS ALL ABOUT KEEPING YOUR FLEET CALLED NIMBLE. THE ABILITY TO ADAPT TO WHAT'S GOING ON IN THE MARKETPLACE, VERY MUCH LIKE A COMMERCIAL BUSINESS, CAN MAKE THOSE QUICK SHIFTS. THIS ENABLES THE CITY TO BE ABLE TO CHANGE LIKE THAT, AND ONE EXAMPLE [INAUDIBLE] CITY OF EVERMAN I DID AND ANALYSIS FOR. THEY'VE BEEN [INAUDIBLE] WITH US FOR ABOUT FOUR YEARS, MAYBE FIVE AT THIS POINT IN TIME. AND LOOKING AT SOME OF THE MORE RECENT THINGS, WE CYCLED SOME VEHICLES A LITTLE EARLIER [INAUDIBLE] PLANNED [INAUDIBLE] A FEW OF THEM AND BECAUSE OF THAT, WE'VE BROUGHT IT--. WE HAVE VEHICLES IN SERVICE FOR 18 MONTHS. WE ENDED UP SELLING IT AND WE HAD $19,000 ON RESALE RETURNED BACK ON JUST ONE VEHICLE, THE FIRST ONE I LOOKED AT, WHICH MEANS THERE ARE TWO YEAR OPERATIONAL EXPENSE FOR THAT ONE VEHICLE WAS ACTUALLY A NEGATIVE $9,000. AFTER MAINTENANCE, FUEL, EVERYTHING THEY ACTUALLY HAD AN OPERATIONAL CREDIT AND THAT WAS JUST BECAUSE OF THE WAY WE HAVE IT STRUCTURED. [INAUDIBLE] ABLE TO ADAPT TO WHAT WAS COMING UP IN THE MARKETPLACE AND BE ABLE TO CYCLE [INAUDIBLE] JUST TO HAVE A JUST AN EXAMPLE OF SOMETHING THAT I'VE LOOKED AT RECENTLY, JUST BEING ABLE TO KIND OF MAKE THOSE CHANGES. AND THEN ALSO IT ALLOWS YOU TO BE ABLE TO, YOU KNOW, TAKE ADVANTAGE OF NEW TECHNOLOGY [01:10:04] THAT'S COMING INTO PLAY BECAUSE TECHNOLOGY IS RAPIDLY ADVANCING IN THE VEHICLE SPACE. I MEAN, ELECTRIFICATION, LIKE WE'VE JOKED ABOUT, BUT IT'S REALLY IS COMING, AND SO I THINK IT ALLOWS YOU TO BE ABLE TO GET INTO THAT PLAY WITHOUT--. OTHERWISE, IT CAN TAKE Y'ALL A DECADE. TO CHIEF BROOKE'S POINT, I THINK ONE OF THE PROBABLY THE BIGGER IMPACTS IS THE SAFETY FEATURES. SAFETY FEATURES, I'M IN THE HIGH TECH ARENA AND WE, YOU KNOW, MAKE CHIPS AND ALL THAT KIND OF STUFF. SO THE CHIP CONTENT IS GOING UP AND MOST OF IT IS IN SAFETY TYPE THINGS. SO ALTHOUGH ELECTRIFICATION IS ALSO A BIG FACTOR, I THINK THE SAFETY IS BIG. CAN YOU BUILD A FEW MORE CHIPS? I THINK THEY NEED THEM OUT THERE, BY THE WAY. SO THANK YOU ALL FOR THAT. AND FROM A FINANCE COST PERSPECTIVE, I WOULD LIKE TO SEE OUR ACTUAL EXPENSES FOR MAINTENANCE AND FUEL OVER THE LAST FEW YEARS. YOU KNOW, AS WE GET TO THE, YOU KNOW, IF WE PURSUE THIS FURTHER, I WOULD KIND OF LIKE TO SEE WHAT THOSE PAST EXPENSES HAVE BEEN. I'D ALSO KIND OF LIKE TO SEE HOW THIS, YOU KNOW FOR THESE VEHICLES, HOW DOES THAT COMPARE TO YOUR ANALYSIS IN YOUR FUND, YOU KNOW, TO WHAT WE'RE PUTTING INTO THE EQUIPMENT REPLACEMENT FUND AND HOW DOES THAT KIND OF LINK UP? YEAH, I THINK THE CURRENT ACQUISITION EXPENSE IS VERY--. IT'S HARD TO LOOK BACK. YOU REALLY GOT TO LOOK AT YOUR NUMBER OF ACQUISITIONS EVERY YEAR, YOUR AVERAGE, TO BE ABLE TO FORWARD PROJECT FORWARD ON THAT. I THINK ON YOUR MAINTENANCE AND FUEL, THIS IS BASED OFF YOUR ACTUAL BUDGET, [INAUDIBLE] YOU ACTUALLY BEEN SPENDING, BY THE WAY, BUT Y'ALL'VE HAD SOME VOLATILITY AND I'LL SAY THAT. [LAUGHTER] AND SO I HAD TO USE KIND OF A CONSERVATIVE AVERAGE VERSUS--. Y'ALL HAD SOME YEARS Y'ALL SPEND A LOT OF MONEY IF YOU LOOK THE PAST FEW YEARS ON SOME--. I DON'T KNOW WHAT MADE UP THAT EXPENSE, BUT THERE ARE SOME BIG TICKET ITEMS THAT I COULD TELL THAT HAPPENED IN SOME YEARS. [LAUGHTER] HE'S THE ONE. ONE QUESTION THAT I HAD WAS ON THE FLEET SIZE. RIGHT NOW WE HAVE 16. I DON'T HAVE ANY INTENTIONS OF GOING BEYOND 16. BUT IF WE HAD TO NEXT YEAR, WE'RE LOOKING AT THIS AND WE NEED ANOTHER VEHICLE. THERE'S NO CONTRACT IN PLACE. WE JUST CONTACT YOU GUYS, GO, HEY, WE NEED A 17TH VEHICLE. AND THEN THE OTHER QUESTION I HAVE IS KIND OF IF WE WANT TO IMPLEMENT THIS PROGRAM FOR THE 2022-2023 YEAR, WHEN DO YOU NEED AN ANSWER BY? BECAUSE OF COURSE, OUR BUDGET'S IN OCTOBER, BUT WHEN DO YOU NEED AN ANSWER BY? BECAUSE I KNOW ORDERING IS HARD I MEAN, WE NEED SOMETHING, YOU KNOW, IN THE APRIL TIME FRAME THE BEST BECAUSE THEY START OPENING UP, ORDERING MAY 1ST FOR MOST THINGS, SO. BUT WE NEED IDEALLY A WEEK OR SO PRIOR TO THAT BECAUSE [INAUDIBLE] GOING TO TAKE US TIME TO GET EVERYTHING READY TO ROCK AND ROLL SO WE CAN ORDER VEHICLES. THE VEHICLE MARKET, I'LL SAY, IN TERMS OF THE GROWTH, YOU REALLY GOT TO GET AHEAD OF THE GROWTH. YOU CAN'T BE REACTIVE TO YOUR GROWTH RIGHT NOW BECAUSE IT'S TAKEN THE MANUFACTURER ABOUT A YEAR TO PRODUCE A VEHICLE OR MORE IN SOME CASES, AS IT CURRENTLY STANDS TODAY, FROM THE TIME WE ORDER IT TO TIME WE'RE PUTTING IT IN SERVICE. SO SAY THE COUNCIL APPROVES--. HECK, IF THEY APPROVED IT TODAY, RIGHT, THEN WE WON'T ORDER TILL MAY, THEY DON'T START PRODUCTION TILL THE FALL, PROBABLY EARLY FALL, AND WE'RE LOOKING AT, YOU KNOW, BEYOND THIS TIME NEXT YEAR BEFORE WE ACTUALLY START SEEING VEHICLES START TO LAND. THAT'S UNLESS WE HAVE TO GO--. IF WE CAN GO BUY THEM OFF DEALER LOTS, BUT I'LL TELL YOU ANYTHING YOU BUY OFF DEALER LOT RIGHT NOW, YOU'RE DRASTICALLY OVERPAYING FOR THAT VEHICLE AS YOU MAY OR MAY NOT BE AWARE OF. AND SO I THINK THE SOONER [INAUDIBLE] IMPROVE IT AND DO IT AND THEN WE REALLY NEED TO THINK OUT, NOT JUST--. I KNOW WE HAVE 16 VEHICLES NOW, BUT I KNOW MAYBE IF WE WANT [INAUDIBLE] A VOLUNTEER VEHICLE OR POLICE OR ANYTHING OF THAT NATURE, YOU KNOW, WE NEED TO GET WAY AHEAD OF IT, THEN WAIT AND SAYING, AND FALL COMES AROUND, OCTOBER ONE. WE HEY, WE DECIDE WE WANT TO DO THIS. OCTOBER ONE MIGHT BE TOO LATE--. ARE ON THE NEWER END. IF WE HAVE A CITIZENS ON PATROL OR SOMETHING LIKE THAT, WE COULD TAKE ONE OF OUR OWN TO MAKE IT A DO NOT REPLACE AND THROW IT OUT THERE FOR THEM, SINCE IT WON'T GET AS MUCH USE. WHICH ONE IS THE ONE THAT'S OWNED THAT CONTINUES [INAUDIBLE]? OH, THAT'S LUKE'S VAC VEHICLE. OKAY. [LAUGHTER] WITH THAT FOREVER. I'M CONFUSED [INAUDIBLE] THE YEARS AND THE ANNUAL NEEDS BECAUSE--. OKAY. COULD YOU WALK THROUGH [INAUDIBLE] THE ANNUAL NEEDS VERSUS THE LEASE NUMBER BECAUSE IT'S NOT ADDING UP. YEAH, THOSE WON'T ADD. THAT'S THE NUMBER OF VEHICLES THAT WE'RE ACQUIRING WITHIN THAT GIVEN YEAR. NOT NECESSARILY--. DOESN'T HAVE MUCH CORRELATION TO YOUR NUMBER OF LEASED VEHICLES. IT JUST SAYS, FOR INSTANCE IN YOU KNOW, 2027, WE'RE REPLACING 10 VEHICLES OF THE, YOU [01:15:03] KNOW, 15 VEHICLES THAT ARE LEASED THAT YEAR. SO MOST OF THAT'S--. THE REASON YOU HAVE SO MANY THAT YEAR IS BECAUSE WE HAVE THE PATROL VEHICLES WE REPLACED IN YEAR ONE THAT'RE COMING UP FOR REPLACEMENT AGAIN IN THAT YEAR. OK, SO THE FIRST YEAR WE WOULD--. REPLACE 11. LEASE 11 OUT OF THE 16? CORRECT. RIGHT? CORRECT. AND THEN THE NEXT YEAR WOULD GO UP TO 12, BUT I'M NOT SURE WHERE THAT'S COMING FROM. YEAH, WELL, THERE'S ONE MORE VEHICLE THAT'S COMING OUT OF SERVICE, SO IT GETS US UP TO 12 LEASED VEHICLES. [INAUDIBLE] OUR CURRENT MILEAGE? CORRECT. OR IS IT BASED ON REPAIR? WELL, THE DECISION TO REPLACE? [INAUDIBLE]. IT'S BASED ON REALLY THREE FACTORS. YES, IT'S BASED ON MILEAGE, TIME, IN Y'ALL'S CASE OPERATIONAL EXPENSE. IT'S ONLY IMPORTANT FROM THIS CURRENT YEAR, BUT IN FUTURE YEARS HAS VERY LITTLE IMPACT ON IT BECAUSE WE WILL HAVE STABILIZE BY THEN. BUT THE THIRD FACTOR THAT'S REALLY IMPORTANT IS RESALE. FOR MUNICIPAL GOVERNMENT, THE BIGGEST THING IS WE'RE CHASING IS KNOWING WHEN TO SELL A VEHICLE. ARE YOU INVOLVED IN THAT DECISION? NO, WE'RE NOT, AND TO THE ONLY PERSPECTIVE THAT WE ADVISE ON IT AND THEN THE CITY MANAGEMENT MAKES DECISIONS AS FAR AS WHAT GETS REPLACED. THEY'LL GET [INAUDIBLE]. BASICALLY, THEY HAVE WHAT ACTUARIES THAT KIND OF DO THIS FOR THEM AND SAY AT THIS, WE CAN SELL ALL OF YOUR F-150S AT, YOU KNOW, YOU MIGHT HAVE BOUGHT THEM FOR $20,000, BUT WE CAN SELL THEM FOR $25,000 IS WHAT THEY'LL COME BACK AND SAY TO US. SO, AT THAT POINT, WE'LL SAY, OK, WE CAN GET MORE MONEY FOR THEM WHAT WE PURCHASED THEM FOR. LET'S MOVE FORWARD WITH THAT. WHEN YOU SAY WE, I JUST WANT TO UNDERSTAND BECAUSE I KNOW HE SAYS CITY MANAGEMENT, WOULD THESE BE COMING TO CITY MANAGEMENT TO DECIDE OR WOULD THESE BE COMING TO COUNCIL TO DECIDE? WOULD YOU BE BRINGING IT TO COUNCIL WE WOULD BRING THIS ALL TO COUNCIL SO EACH YEAR, COUNCIL SHOULD EXPECT TO SEE SOMETHING THAT ASKS FOR HOWEVER MANY VEHICLES THEY THINK THAT WE NEED LEASE. [INAUDIBLE]. YEAH. IT'S NO LONGER A CAPITAL DECISION IN THE SAME WAY. SO YOU'RE NOT GOING TO HAVE LIKE A CAPITAL BUDGET, YOU HAVE TO APPROVE FOR THE VEHICLES, BUT MOST CITY MANAGEMENT IS GOING TO TAKE IT TO COUNCIL AND SAY, HEY, HERE'S WHY WE'RE REPLACING, AND MORE OF A HEY, HERE'S WHAT WE'RE DOING, AND HERE'S WHY WE'RE DOING IT, BECAUSE THAT'S PART OF OUR ANALYSIS IS [INAUDIBLE]. WE DO TWO BIG [INAUDIBLE] A YEAR. ONE'S A FLEET PLANNING MEETING, WHICH IS THE PLANNING OF THE REPLACEMENTS, AND THEN WE'RE ALSO GOING TO HAVE AN ANNUAL CLIENT REVIEW MEETING, WHICH IS THE YEAR OVER YEAR FINANCIAL ANALYSIS OF THE FLEET. THE COUNCIL DOESN'T NECESSARILY-- WON'T HAVE TO APPROVE THE ACQUISITIONS OF THEM BECAUSE IT'S NOT CAPITAL EXPENDITURE IN THE SAME WAY. BUT YOU'LL HAVE THE BUDGET YOU'LL BE APPROVING. IT'S A MORE OF A CITYWIDE BUDGET. BUT WE [INAUDIBLE] STILL DOING THIS TO YOU ALL TO LET YOU GUYS KNOW THAT, HEY, WE'RE BRINGING IN, YOU KNOW, 10 VEHICLES OR 11 VEHICLES, AND THIS IS OUR EQUITY THAT WE'RE GOING TO WE POTENTIALLY ARE GOING TO GET BACK IN [INAUDIBLE]. SO YOU WOULD BE ABLE TO BRING US AND SAY THAT WE'RE WE'RE TRADING OUT FOUR PUBLIC WORKS, FOUR PD TAHOE'S. WE'RE GETTING--. NOW, WE'RE GETTING FORD INTERCEPTORS AND WE'RE GETTING DODGE RAMS OR SOMETHING LIKE THAT SO THE COUNCIL CAN LOOK AT AND GO THAT MAKES SENSE. YEAH, THIS MAKES SENSE, AND SO COUNCIL WILL BE ABLE TO TAKE AN ACTION ON THAT. BLESS IT AND WE GO ON. YES, SIR. THIS PAST YEAR, DID WE BUY TWO OR THREE VEHICLES? WE'VE ONLY-- I THINK WE HAVEN'T EVEN BOUGHT ONE YET. I THINK GARY'S GOT AN F--. [INAUDIBLE] WELL, IT HASN'T--. THAT'S STILL AN ORDER. [INAUDIBLE] THAT'S STILL ON ORDER. YEAH, WE'RE NOT SURE WHEN WE'RE GOING TO GET THAT ONE. OH, OK. SO IT TAKES THREE YEARS TO CYCLE OUT WHAT WE HAVE, CURRENTLY HAVE? CORRECT. SO I'M JUST KIND OF CURIOUS HOW THOSE NUMBERS CAME ABOUT BECAUSE THREE VEHICLES, IT SEEMS TO ME, WOULD BE THE LAST THREE THAT WE PURCHASED, BUT, I MEAN, THAT WOULD BE CYCLED OUT IN 2024. YEAH. BUT AGAIN, IT'S DRIVEN ALSO OFF AN IDEAL CYCLE POINT BECAUSE YOU SAY WE BOUGHT THAT 250 YOU HAVE ON ORDER RIGHT NOW. WHAT WOULD HAPPEN WITH THAT IS WE WOULD ACTUALLY JUMP IN AND PAY FOR THAT VEHICLE ON YOUR BEHALF AND WE WOULD, YOU KNOW, BRING THAT ONE TO A MIX. BUT [INAUDIBLE] SAY THAT ONE 250, WE BUY THIS YEAR, RIGHT? WELL, NEXT YEAR, I'M GONNA HAVE THAT [INAUDIBLE]. IF IT'S A PUBLIC WORKS ONE THAT DOESN'T HAVE MUCH EQUIPMENT GOING ON, [INAUDIBLE] TELLING YOU NEXT YEAR CYCLE THAT ONE OUT, NEXT YEAR. EVEN THOUGH YOU JUST BOUGHT IT THIS YEAR, BUT NEXT YEAR, WE'RE GOING TO SELL IT BECAUSE WE'RE ON CAPITALIZED ON THE PROCEEDS OF SALE OF THAT VEHICLE. SO--. THIS IS A BIG FACTOR THAT'S REALLY [INAUDIBLE] FIGURE IT OUT--. YEAH, WE'RE GOING TO ONE AT A TIME, PLEASE. YEAH. ON SOMETHING THAT'S ALREADY IN ONE AT A TIME. [INAUDIBLE] THE RESALE VALUE WOULD BE MUCH HIGHER NEXT YEAR, BUT THE COST TO ACQUIRE [01:20:09] [INAUDIBLE] WOULD BE MUCH HIGHER ALSO? YEAH, THAT'S OUR JOB TO FIGURE THAT OUT AND LET YOU KNOW. [LAUGHTER] YEAH, IT WAS A BAD FINANCIAL DECISION, WE'RE NOT GOING TO TELL YOU GET RID OF IT. THAT'S PART OF WHAT YOU'RE HIRING US FOR. IT'S NUMBER ONE, I WANT TO BE HIT THESE NUMBERS, BUT NUMBER TWO, IT'S OUR JOB AS YOU'RE HIRING US TO MANAGE YOUR FLEET IS TO PROVIDE THOSE ANALYTICS YEAR OVER YEAR AS FAR AS TO BACK UP YOUR DECISION MAKING. [INAUDIBLE] IF IT DOESN'T COST YOU ANYTHING AND IT'S THE ONLY ONE YEAR TURNAROUND AS LONG AS YOU HAVE THE NEXT ONE IN THAT ONE YEAR TO START, WHICH IF I HEARD HIM CORRECTLY, HE SAID IT IS, THEN IT DOESN'T MATTER UNLESS THERE'S SOMETHING JUST SO SPECIAL WITH THAT VEHICLE THAT WE WOULDN'T WANT TO GET RID OF IT FOR SOME REASON. YEAH. RIGHT? YOU'RE GOING TO HAVE SOME, I MEAN, THINGS LIKE EVEN THE FIRE COMMAND VEHICLES, BECAUSE WE'RE PROBABLY DUMPING $10,000 BUCKS OR PLUS OR MORE IN EQUIPMENT OF THE VEHICLE . NO, THAT EQUIPMENT HAS NO VALUE TO ANYBODY OTHER THAN THE CITY OF PARKER, SO IT DOESN'T HAVE AN INHERENT RESALE VALUE. SO WE'VE GOT TO RUN THAT VEHICLE OUT A LITTLE BIT LONGER, BUT IT'S REALLY ALL ABOUT JUST HITTING THAT DEAL CYCLE POINT FOR EACH AND EVERY VEHICLE. ONE QUICK--. WAS MY UNDERSTANDING THAT THERE'S A GPS ON HOW-- WE CAN PUT [INAUDIBLE] IN THE VEHICLES IF WE WANT TRACKING, IF THE CITY WANTS TO DO THAT. THAT'S A TYPICALLY A SEPARATE COUNCIL DECISION, LINE ITEM OF DECISION. BECAUSE I MEAN, THERE'S A COST ROUGHLY ABOUT 18 BUCKS A MONTH PER VEHICLE FOR THE CITY TO HAVE TRACKING THEM GPS [INAUDIBLE] ON THE VEHICLE. SO THE CITY WOULD JUST HAVE TO MAKE A DECISION ON THAT. WE'RE BEYOND THAT NOW. SO HOW DOES THAT AFFECT THE OVERALL SAVINGS? BECAUSE WE DON'T KNOW WHETHER GAS IS GOING TO BE FIVE DOLLARS A GALLON, TWO DOLLARS A GALLON OR TWELVE DOLLARS A GALLON. IT'S GOING TO INCREASE YOUR SAVINGS. IF I INCREASE THE COST OF FUEL BECAUSE OF THE FUEL DISPARITY BETWEEN YOUR CURRENT FLEET VERSUS FUTURE FLEET, IT'S GOING TO INCREASE THE SAVINGS. SO IT'S MORE CONSERVATIVE TO HAVE ME PUT THAT NUMBER A LOT SMALLER THAN IN TODAY'S DOLLARS. UP, YOU'RE ACTUALLY SAVING MORE. WERE WHEN WE ORIGINALLY MET WITH NICK, AND THEN LAST WEEK IT WAS THREE DOLLARS, AND NOW I THINK IT'S ALMOST $4 THIS WEEK. YEAH. SO, YOU KNOW, WE'RE KIND OF GOING UP QUICKLY HERE. SO. I HAVE TO PUT PREMIUM IN MY CAR, BUT IT WAS OVER FOUR. [INAUDIBLE]. MOVING VERY RAPIDLY. GRANT, DO YOU HAVE ANY COMMENTS YOU'D LIKE TO MAKE ABOUT THIS? WILL THIS CAUSE, IF WE WENT TO SOMETHING LIKE THIS WITH THIS CAUSE YOU A BURDEN OR NEED A SPECIAL PERSON TO HANDLE THE PAPERWORK OR WHAT? NO, NO. I THINK IT ACTUALLY [INAUDIBLE] SIMPLE PROCESS. FROM A BUDGET STANDPOINT, IT SIMPLIFIES IT ON AT LEAST THE VEHICLE PART [INAUDIBLE]. WE STILL HAVE THE OTHER CAPITAL ITEMS [INAUDIBLE] FACTORS AND [INAUDIBLE] AND THOSE SORTS OF THINGS. BUT ON THE VEHICLE SIDE OF IT, IT DOES, AND DEFINITELY APPEARS [INAUDIBLE] HAVE SAVINGS. SO YEAH, THAT'S. I DON'T SEE ISSUES. ONE QUESTION I HAD ASKED YOU, GRANT, I FIGURE I'LL GO OUT AND ASK YOU AGAIN, WAS ABOUT HOW WE CATEGORIZE THIS BECAUSE I KNOW THAT ONE THING OUR RESIDENTS DO NOT LIKE IS US TAKING ON DEBT, AND SINCE THIS IS TECHNICALLY A EQUITY LEASE, DO WE IN THEORY TAKE ON THE FULL DEBT FOR ALL 11 VEHICLES THAT WE PURCHASED FROM THEM IN 2022? OR DO WE LOOK AT THE LEASE PAYMENTS AS OUR EXPENDITURES? THE EXPENDITURES WILL BE THE ANNUAL LEASE PAYMENT, BUT YOU WILL SHOW THE FULL AMOUNT IN FUTURE YEARS ALSO IN OUR AUDIT. NOW, I'M NOT A CPA [INAUDIBLE] SOUND LIKE ADVICE AT ALL IN THAT REGARD, BUT SOME [INAUDIBLE] YOU CAN TREAT IT AS CAPITAL, TO HIS POINT, YOU HAVE YOUR SHORT TERM AND LONG TERM DEBT REPRESENTED ON THE BALANCE SHEET. SO THE FUTURE PAYMENTS WOULD BE REPRESENTED LONG TERM DEBT AND THEN THE CURRENT PAYMENTS FOR THE CURRENT YEAR, WE REPRESENTED AS THE SHORT TERM PAYMENTS ON IT. I PERSONALLY THINK IF WE EXPLAIN IT PEOPLE--. THAT'S NOT COSTING US ANY MORE. I MEAN, BECAUSE THAT'S THE BOTTOM LINE IS CASH FLOW HERE, EVEN THOUGH THERE'S QUOTE UNQUOTE DEBT ON PAPER, WE'RE DOING BETTER OVERALL. SO I THINK THAT'S SOMETHING WE CAN CERTAINLY COMMUNICATE IF IT MAKES SENSE. AND THE NICE THING WHAT I LIKE ABOUT THIS PROGRAM, ONCE WE STARTED LOOKING AT IT WAS ALL THE VEHICLES THAT ARE NOT PURSUIT RATED, YOU KNOW, WITH THEIR PROGRAM, WITH THE MAINTENANCE AND EVERYTHING, IT'S LETTING THEM KNOW, HEY, YOU NEED OIL CHANGES, YOU NEED THIS, YOU NEED THIS, THIS, THIS ON YOUR VEHICLE GIVING ALL OF THE UPDATES OF RECALLS. [01:25:06] IF THERE'S A RECALL, I THINK NICK SAID, WE PROBABLY NEED TO TAKE IT TO THE DEALERSHIP ON THAT. BUT OTHER THAN THAT, YOU KNOW, EACH ONE OF THOSE EMPLOYEES IS RESPONSIBLE FOR THAT VEHICLE THEN AND MAKING SURE EVERYTHING IS BEING DONE I HAD A FLEET SERVICE VEHICLE AND IT WAS A GREAT DEAL. I HAD A BASICALLY A COUPON BOOK IN THERE, AND I'M SURE THAT'S THE WAY IT WORKS, RIGHT? OR SOMETHING-- WE DON'T HAVE THE BOOKS [INAUDIBLE]. THE BOOKS HAVE GONE AWAY. [LAUGHTER] YEAH, IT'S ON YOUR--. YEAH, IT'S ON THE PHONE NOW, EXACTLY. BUT IT WAS VERY EASY [INAUDIBLE] AND IT WAS ALL [INAUDIBLE], YOU KNOW, IN THE OLD DAYS [INAUDIBLE] YOU JUST TOOK IT. YEAH. DO WE HAVE TO KEEP ALL OF THE LIKE THE PD VEHICLES PURSUIT RATED THAT ARE OR ARE WE GOING TO LOOK AT THAT TOO WHEN WE GO INTO THIS? I THINK LIKE COMMAND VEHICLES, WE COULD GO OUTSIDE OF PURSUIT RATED, CORRECT? AND THEN--. THEM IN THE PURSUIT RATE. AND THEN WE'RE GOING TO REPLACE THEM, REPLACE THEM WITH NON-PURSUIT RATED FOR THE COMMAND CAR AND THE [INAUDIBLE] CAR. SO THEN THOSE WOULD BE ON THE MAINTENANCE COVER PROGRAM. THEY WOULDN'T BE POLICE PURSUIT RATED, SO THEY WOULD GO DOWN, BUT THE FLEET HAS EXPANDED TO SIX CARS. THAT'S MY POINT. I'D HAVE TO ASK YOU [INAUDIBLE], BUT WHEN THAT WORKS-- AND THEN FIRES AND FIRES WOULDN'T BE PURSUIT RATED BECAUSE I DON'T THINK CHIEF WANTS TO BE CHASING PEOPLE . [LAUGHTER] JUST THROWING THAT OUT THERE. [INAUDIBLE] ALL OF THEM JUST GET A PLAIN OFF THE STREET [INAUDIBLE] WHICH COST LESS MONEY. THE BOXES STILL FIT, EVERYTHING STILL WORKS AS FAR AS IT'S [INAUDIBLE]. [INAUDIBLE]. AND SOMETHING ELSE I'D LIKE TO SEE ALSO WHEN YOU'RE ASKING ME ABOUT AS FAR AS BEING EXTRA [INAUDIBLE] OR ANYTHING. ANOTHER AREA THAT I THINKS GONNA SAVE [INAUDIBLE] TIMELINE IS THE RESALE. RUNNING THESE CARS THROUGH AUCTIONS. YOU KNOW, IT'S ONE OF THOSE DEALS WHERE A CAR MIGHT GET A PARKED AND SIT BACK THERE FOR TWO YEARS BEFORE WE FINALLY GET IT AUCTIONED OFF. AND IN THAT TIMEFRAME, WE'RE NOT GETTING ANYTHING FOR THAT CAR, AND THEN STAFF'S ALSO [INAUDIBLE] TO PLAY USED CAR SALESMAN UP HERE AND ANSWER QUESTIONS ABOUT WHAT'S WRONG WITH IT IN, SCHEDULE MEETINGS FOR PEOPLE TO COME [INAUDIBLE] AND LOOK AT IT AND IT DOESN'T CRANK, GETTING PUBLIC WORKS OUT THERE TO TRY TO [INAUDIBLE] [LAUGHTER] AND ALL THAT. SO, I THINK IT'S A LOT LESS WORK, [INAUDIBLE] NOT HAVING TO GET INVOLVED WITH THE RESALE. [INAUDIBLE] HAVE AN ACTION ITEM, BUT I WOULD LIKE TO BRING THIS BACK UP LATER IF WE CAN, TO ADD IT TO A FUTURE AGENDA, BECAUSE I THINK THIS IS DEFINITELY WORTH LOOKING INTO. OK, NICK, COULD YOU GET A COPY OF YOUR CONTRACT--? WE GOT IT I WANT TO MAKE SURE WE HAVE A CHANCE TO REVIEW THAT. YES, WE CAN CERTAINLY BRING IT AND PUT IT ON A FUTURE AGENDA ITEM WHERE WE CAN MAKE THAT CONSIDERATION. IS IT NEXT WEEK, IS THAT RIGHT? CORRECT. I WON'T BE ABLE TO ATTEND, BUT IF Y'ALL WANT TO PUT IT ON THERE, IF [INAUDIBLE] HAVE ANY MORE QUESTIONS, I'M GOOD WITH THAT. IF YOU'D LIKE IT TO PUT ON AN ITEM WHERE YOU WANT ME TO BE PRESENT, THEN--. UNDERSTAND. YEAH. SO. ANY FURTHER QUESTIONS? THANK YOU, NICK. THANK YOU ALL SO MUCH. THANK YOU VERY MUCH. OK. AT THIS TIME, UNLESS THERE'S ANYTHING ELSE, THE WORKSHOP IS HEREBY CLOSED. WE HAVE ONE FUTURE AGENDA ITEM, WHICH IS CONSIDERATION OF THIS ENTERPRISE FLEET SYSTEM. ANYTHING ELSE FROM ANYONE? OK, THEN WE ARE ADJOURNED. IT IS 4:28. HUH? OH, [INAUDIBLE]? * This transcript was compiled from uncorrected Closed Captioning.