/Buy or lease Lawmakers look for best deals on wheels

Buy or lease Lawmakers look for best deals on wheels

House Speaker Philip Gunn (Republican from Clinton) often led the discussion on various state agencies’ fleet policies. He also discussed whether buying or leasing new or used vehicles was the best approach for them. Gunn, a Republican from Clinton, led questions with Melinda McGrath, Mississippi Department of Transportation Executive director, about why the agency purchases new vehicles and why heavy equipment like backhoes, excavators, and other machinery are rented instead of rented. Gunn also explained why Transportation Department employees do not use state vehicles and receive mileage reimbursement. McGrath stated that the Transportation Department currently has 2,233 vehicles. However, 986 of these vehicles are heavy-duty vehicles such as dump trucks, tanker trucks and asphalt truck. McGrath stated that several of the fleet vehicles are eligible for federal reimbursements from U.S. Department of Transportation and that a cost-benefit assessment showed that heavy duty vehicles were more cost-effective than renting. The state could save between $150,000 to $200,000. McGrath also mentioned safety concerns such as flashing lights on state-owned vehicles which can’t be mounted on personal vehicles. He also cited efficiency concerns like employees being able to inform the department when state vehicles aren’t at work. McGrath stated that reducing the number of state-owned vehicles would decrease our efficiency. McGrath stated that “we think where we are right now is a reasonable amount of vehicles to maintain what needs to be maintained.” Gunn also pointed out that Enterprise leases vehicles to several universities, including Jackson State University and Alcorn State University. Glenn Boyce (commissioner of higher education) stated that he believes that universities who buy their vehicles get a better deal, but that it depends on whether the college is able to maintain the vehicle on-site. Alcorn officials responded to the questions of the legislative panel by stating that the university cannot afford to maintain and repair the vehicles, and can only purchase new ones. The written response stated that leasing was cheaper at the moment. An afternoon session was held with the Department of Finance and Administration Lieutenant Governor. Tate Reeves suggested the idea of a shared pool of vehicles for state agencies. Reeves stated that instead of each department paying for a fleet, the state would maintain a pool of vehicles that all agencies could access. He noted that the cost of maintaining this fleet would be shared by all entities and not spread to each agency. Aubrey Leigh Goodwin, Department of Finance and Administration, stated that purchasing in general could be cheaper if there was a central procurement process for all commodities of state agencies. Instead of each agency having its own procurement process and division, this plan would see a centralized procurement department under the Department of Finance and Administration. It would handle all procurement. Goodwin stated that such a program would allow bulk purchase leveraging to be implemented. This could help save money for the state. Goodwin stated that vendors would be able to predict the future. “We will be in a position to leverage all our purchasing at once.” All three education agencies, K-12, community college and colleges and universities, stressed that they adhere to state law when buying. Sen. Gary Jackson (R-French Camp) questioned Institutions of Higher Learning about the higher threshold that requires board approval for purchases. While purchases exceeding $100,000 required approval from other state agencies, IHL’s board review starts at $250,000. I don’t know why that threshold was set at this level. Boyce said that there is much debate about whether the threshold is too low or too high. Legislators also asked Andrea Mayfield, head of community colleges, about the absence of a central oversight body for college purchases. Senator Briggs Hopson (R-Vicksburg) asked where the community colleges draw the line. Mayfield stressed that although large purchases, such as those for state board connectivity, firewalls, and security, are already made through a consortium of colleges, individual college purchases are not always done through a consortium. They are free to purchase in consortium if they wish, but they wouldn’t force it. Mayfield stated that they know their needs are different – they will know what they require and when they need it. This working group session was one of a series of meetings that were designed to evaluate the state’s tax structure as well as the budgets of 13 state agencies. The group previously discussed topics like personnel, contracts, and travel. To support this important work, you can make a regular donation to the Spring Member Drive today.