BALTIMORE, MARYLAND May 23, 2016 – On May 9th Mayor Stephanie Rawlings-Blake joined the Department of General Services and the Fire Department to unveil Baltimore City Fire Department’s new Hazmat and Air Flex units. DGS’s Fleet Management Division is responsible for the management and maintenance of more than 5,600 pieces of motorized equipment that are assigned to the various City agencies for use in performing a wide range of services which include plowing and sweeping the City streets, collecting refuse and recycling, and responding to medical emergencies.

The new Fire units were made possible because in her Ten Year Financial Plan, the Mayor prioritized the recommendation of a new lease financing model to both modernize and reduce the cost of the City’s fleet, which is managed by the Department of General Services.

Based on the results of a comprehensive study into the replacement of vehicles, the City determined that it was facing a replacement backlog—the value of assets which have reached or exceeded their useful life—of just about $125 million. Such an aging fleet requires a much higher investment in maintenance and repair costs, and is also associated with higher fuel costs due to older, less fuel-efficient vehicles. In addition, an aging fleet experiences substantially more breakdowns, which affects service delivery and requires a large reserve fleet for core operations. In Fiscal 2014, in order to break away from this counterproductive condition, the City adopted a lease financing strategy, known as the Master Lease Program. Previously, the City funded vehicle purchases through a Mobile Equipment sinking fund; the entire capital cost of each asset in the fleet was paid at the beginning of the asset’s service life. Under a lease financing approach, the purchase of every vehicle in the fleet is financed over its useful life. This new approach has allowed the City to modernize its fleet more rapidly than the previous model would have allowed. The Department of General Services can say with confidence that had the Master Lease Program not been created, the replacement backlog today would be at or close to $200 million, or  90% of the total value of the fleet.

In addition, the transition to a debt financing model for vehicle purchases, allowed for a onetime appropriation of $30 million from the City’s Mobile Equipment Fund in the Fiscal 2014 Capital budget. These funds were used for transportation projects ($10M), blight elimination ($10M), MOIT upgrades ($5M), and recreation centers ($5M).

Through the end of 2016, the City will have replaced close to 1,500 vehicles, which accounts for approximately 1/3 of the vehicle fleet. One major result, through investment in fleet renewal, has been a reduction of the backlog to $99.5 million. Over the past 3 years, Fleet Management has cut the expense of maintaining the City’s vehicle fleet by $1 million per annum

The Department of General Services is committed to providing healthy work environments and safe reliable vehicles for City employees by delivering high quality and cost-effective support services to City agencies who serve Baltimore’s citizens and stakeholders.

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