HomeMy WebLinkAboutResolution_AdoptingER&RPolicyKITTITAS COUNTY
DEPARTMENT OF PUBLIC WORKS
2023 AGENDA STAFF REPORT
AGENDA DATE: April 18, 2023
ACTION REQUESTED: Request to Approve a Resolution Adopting Kittitas County
Department of Public Works Equipment Rental and
Revolving Fund Policy
BACKGROUND:
Several months ago, the County Engineer was notified by
the County Road Administration Board that a formal
Equipment Rental & Revolving (ER&R) policy is now
required. Responding to the request, Public Works
prepared a draft policy and presented it to Board of County
Commissioners on March 27, 2023. Public Works staff has
made several minor adjustments to the policy since and is
now ready for Board adoption. The changes do not modify
policy content and merely provide additional clarity such as
"Division Manager" is now described as "Designated
Division Manager". The Finance Manager is now
responsible for collecting appropriate data supporting
annual rate setting efforts by the County Engineer.
INTERACTION:
Public Works.
RECOMMENDATION:
Approve the Resolution adopting the proposed Kittitas
County Department of Public Works ER&R policy for use.
HANDLING:
Return one original to Public Works.
ATTACHMENTS:
Resolution; Kittitas County Department of Public Works
Equipment Rental and Revolving Fund Policy
LEAD STAFF:
Mark R. Cook, Director.
BOARD OF COUNTY COMMISSIONERS
COUNTY OF KITTITAS
STATE OF WASHINGTON
RESOLUTION
NO.
ADOPTING AN EQUIPMENT RENTAL AND REVOLVING FUND POLICY FOR USE
IN FUND NO. 105
WHEREAS: The Kittitas County Board of County Commissioners directed the
establishment of an equipment rental and revolving fund (105) in the
early 1990s; and
WHEREAS: Public Works has been utilizing documented business practices since
2016; and
WHEREAS: The County Road Administration Board is requiring the county adopt a
formal equipment rental and revolving fund policy at this time; and
WHEREAS: Public Works has prepared and presented a draft policy to the Board of
County Commissioners for review on March 27, 2023; and
WHEREAS: Public Works desires now formalizing the draft policy for Fund 105
use.
NOW, THEREFORE BE IT RESOLVED: The Board of County Commissioners, after due
consideration, does hereby adopt Public Works Equipment Rental and Revolving Fund Policy.
DATED this 181h day of April 2023, at Ellensburg, Washington.
Attest:
❑ Clerk of the Board- Julie Kjorsvik
❑ Deputy Clerk of the Board- Mandy Buchholz
BOARD OF COUNTY COMMISSIONERS
KITTITAS COUNTY, WASHINGTON
Cory Wright, Chairman
Brett Wachsmith, Vice -Chairman
Laura Osiadacz, Commissioner
KITTITAS COUNTY DEPARTMENT OF
FUND 501
(EQUIPMENT RENTAL AND REVOLVING)
POLICY NO. 1
ADOPTED APRIL, 18, 2023
Page 1 of 10
Table of Contents
1.0 PURPOSE............................................................................................................4
1.1 Applicability.......................................................................................................4
1.2 Authorities..........................................................................................................4
1.3 Vehicle or equipment purchase requests....................................................................4
1.4 Replacement........................................................................................................4
1.5 Appeal the Designated Division Manager's Decision on Replacement Request..................5
2.0 EQUIPMENT RENTAL............................................................................................ 5
2.1 Fund 501 Rental Rates..........................................................................................5
2.2 Base Vehicle/Equipment........................................................................................5
2.3 Auxiliary Equipment.............................................................................................6
2.4 Upgrades............................................................................................................6
2.5 Cost Efficiency....................................................................................................6
2.6 User Responsibility..............................................................................................6
2.7 Department Responsibility.....................................................................................6
2.8 Fuel..................................................................................................................6
2.9 Damaged Vehicle/Equipment..................................................................................6
2.10 Pool Vehicles......................................................................................................6
2.11 Minimum Rental..................................................................................................7
2.12 Inventory ............................................................................................................ 7
2.13 Accumulated Funding...........................................................................................7
2.14 Surplus of Equipment............................................................................................7
3.0 EQUIPMENT RENTAL AND REVOLVING CENTRAL STORES.................................7
3.1 Staff Time Reporting............................................................................................7
3.2 Inventory Charges................................................................................................7
3.3 Bidding..............................................................................................................7
3.4 Accounting.........................................................................................................8
3.5 Consolidated Ordering..........................................................................................8
4.0 FUEL......................................................................................................................8
4.1 Fuel Charges.......................................................................................................8
4.2 Competitive Prices...............................................................................................8
4.3 Fuel Card Limitations...........................................................................................8
4.4 County Fuel Credit Cards.......................................................................................8
5.0 MECHANIC SHOP...................................................................................................8
Page 2 of 10
5.1 Shop Rates.........................................................................................................8
5.2 Outsourcing........................................................................................................8
5.3 Vehicle/Equipment Maintenance.............................................................................8
5.4 Broken Down Vehicle/Equipment............................................................................9
5.5 Misuse/Abuse......................................................................................................9
5.6 Renter Responsibility............................................................................................9
6.0 PITS AND QUARRIES..............................................................................................9
6.1 Unit Prices.......................................................................................................... 9
6.2 Rates for Manufactured Products.............................................................................9
6.3 Future Pit Operations............................................................................................9
6.4 Storage............................................................................................................ 10
7.0 SIGN FABRICATION SHOP................................................................................... 10
8.0 FACILITY RENTAL AND CONSTRUCTION........................................................... 10
8.1 Facility Space Rental Rate................................................................................... 10
8.2 Shop Rental Rate...............................................................................................10
8.3 Cost Distribution................................................................................................ 10
9.0 FINANCE DEPARTMENT FUND 501 DATA PROCESSING ...................................... 10
Page 3 of 10
EQUIPMENT RENTAL AND REVOLVING FUND 501 POLICY NO. 1
1.0 PURPOSE
To provide policies and procedures for administration of the EQUIPMENT RENTAL AND
REVOLVING Fund. (R.C.W. 36.33A.010 directs every county to establish, by resolution, an
"equipment rental and revolving fund" but does not provide specific policies for
administering this fund). The Kittitas County Board of Commissioners created the
Equipment Rental and Revolving Fund prior to 1992 to identify procedures for establishing
rates, service levels, and equipment replacement along with services provided within this
fund. This fund is designated Fund 501 for county budgeting purposes. The following
purposes are identified:
• To establish cost containment procedures that reflect proper fiscal management of these
resources and ensure proper equipment maintenance and replacement pursuant to state law
consistent with auditing requirements as stipulated by the State Auditor.
• To provide safe, cost effective, reliable transportation and equipment that meets the
County's needs and mission directives.
• To establish property and asset management procedures ensuring ongoing viability of
public works assets.
1.1 Applicability
This policy applies to all Kittitas County offices and departments and to county officials
(elected officials and department heads), and their employees, that utilize Public Works Fund
501 resources and services.
1.2 Authorities
Pursuant to revised code of Washington at 36.33A.010 and as ordered by the Kittitas County
Board of County Commissioners, Fund 501 is designated as the county's equipment rental and
revolving fund.
1.3 Vehicle or equipment purchase requests.
Vehicle or equipment purchase requests will be made on the appropriate Fund 501 requesting
form. The request must be signed by the appropriate county official before it will be
processed by Public Works.
1.4 Replacement
The Fund 501 designated Division Manager shall make the initial decision as to whether a
piece of equipment qualifies for replacement and with what make, model, or type of
equipment it is to be replaced with. If the requested vehicle or equipment is an appreciable
upgrade, or inflationary cost exceed replacement funding, a cost overrun contribution may be
required from the requesting department.
Page 4 of 10
1.5 Appeal the Designated Division Manager's Decision on Replacement Request
If the decision made by the fund Designated Division Manager is not acceptable to the county
official, their reasons for disagreement, along with their specific request shall be given to the
Director of Public Works for review. The Director of Public Works will either determine in
favor of the Designated Division Manager, or provide an alternative decision based on
additional information received. The decision of the Public Works Director will be given to
the county official for approval. If the department approves the decision, the Designated
Division Manager will pursue a replacement on behalf of the county official. If the decision is
not approved the county official may appeal the decision to the Board of County
Commissioners, whose decision will be final.
2.0 EQUIPMENT RENTAL
2.1 Fund 501 Rental Rates
Rates shall reflect 100 percent of annual expense, including depreciation, fuel, labor and parts
for repairs and service, insurance, indirect costs and overhead. The amount of collected
depreciation per vehicle is defined by its assigned useful life. Equipment purchased under
$5,000 is expensed in the year of purchase. A surcharge will be added annually adjusting for
anticipated inflation. The surcharge rate will not be applied when developing rental rates for
use during declared federal disasters. The rates are subject to annul review by the Board of
County Commissioners.
The rates for all Fund 501 services will be developed by the Designated Division Manager
with support from the Finance Manager and submitted to the County Engineer for approval.
The proposed rates will be presented to the Director of Public Works who, as part of the
annual budget process, will consider the rates along with the Fund budget and submit a
recommended rate resolution to the Board of Kittitas County Commissioners for approval,
along with specific budget documents. The Board of Kittitas County Commissioners shall set
Fund 501 rates by resolution. Four considerations make up a blended rate per vehicle in the
fleet: operational expenses, depreciation, corrections for prior years and a surcharge for
equipment replacement. The surcharge accounts for known pending costs such as annual
inflation. The Public Works Director determines the surcharge rate in conjunction with the
Finance Manager. The surcharge rate is not assigned to fleet vehicles during response to a
declared federal emergency. Prior to finalizing annual rates, current federal equipment rental
rates are compared to Fund 501 draft rates to inform decisionmakers.
Adjustments to the rates are made as needed in order to work toward an equitable status, as
one fund should not make a profit over another fund. Equipment purchased under $5,000 will
be assigned an annual rental amount.
2.2 Base Vehicle/Equipment
The Designated Division Manager shall determine the base vehicle or equipment to be
provided and what standard accessories are supplied with the vehicle or equipment. Standard
equipment shall include fire extinguisher, first aid kit (users to keep stocked after original
installation), and factory/dealership installed accessories ordered with vehicle or equipment
as stipulated by the Department Director.
Page 5 of 10
2.3 Auxiliary Equipment
Fund 501 shall recover costs for all auxiliary vehicles and equipment accessories at the time
of purchase and installation, rather than recovering costs over life of vehicle or equipment.
Requesting parties will be notified of the anticipated cost of auxiliary equipment or
accessories prior to acquisition.
2.4 Upgrades
Fund 501 shall recover costs for renting department's requested upgrades to standard
vehicle or maintenance parts, not typically stocked, or supplied by Fund 501 inventory, at
the time of purchase and installation.
2.5 Cost Efficiency
In an effort to keep rental rates cost-effective, the Designated Division Manager shall
place an emphasis on purchase price, fuel efficiency, and appropriate class size, make,
and models when purchasing vehicles and equipment. The requesting County Official
will be consulted if the requested vehicle or equipment creates concern on the part of the
Designated Division Manager.
2.6 User Responsibility
Each Department or its assigned user shall be responsible for keeping Fund 501 vehicles
and equipment appropriately clean, both inside and outside. Fund 501 will not pay car
washing or interior detail costs.
2.7 Department Responsibility
Each Department will be responsible for paying its own ferry fees, traffic infractions, and parking
fees. They will not be charged to or paid for through Fund 501.
2.8 Fuel
Fund 501 will not reimburse renting departments for any fuel purchases made at non -approved
fuel depots unless Fund 501 provided fuel credit cards are used or prior authorization is given.
Renting departments may check out Fund 501 provided fuel credit cards at the Public Works
accounting office for trips outside the County. Upon completion of the trip, the renting
department shall promptly return the credit card to the Public Works accounting office.
2.9 Damaged Vehicle/Equipment
If a vehicle or piece of equipment is wrecked or damaged, or for any reason beyond Fund 501's
responsibility, its service is lost prior to its depreciated life, and it will be the responsibility of the
renting department to pay the difference in costs to replace or repair it. Fund 501 does not carry
collision insurance on vehicles or equipment.
2.10 Pool Vehicles
The Fund 501 Designated Division Manager will provide pool vehicles for those
departments that don't have a need for permanently assigned vehicles or for vehicles such
as travel vans used periodically for group travel. Short-term rental rates shall be
Page 6 of 10
established for these vehicles and invoiced to the requesting department. It is presumed
that general pool vehicles are funded by the Board of County Commissioners through the
General Fund (initial acquisition and replacement).
2.11 Minimum Rental
For vehicles or equipment that are not used enough to cover their depreciation or do not meet
fiscal yearly requirements established by Fund 501, the renting department shall pay the annual
minimum set for such equipment. Public Works uses a monthly rental rate for all equipment.
Equipment utilized outside of the Road Fund is tracked by actual usage and current FEMA
hourly equipment rental rates apply.
2.12 Inventory
If a vehicle or piece of equipment is turned back to Fund 501 and is no longer needed by the
department, it shall become part of the Fund 501 inventory. The department shall not receive
any reimbursement from Fund 501 for past use or surplus value.
2.13 Accumulated Funding
The Finance Manager reviews funding balance in Fund 501 and advises the County Engineer
of any necessary adjustments required out of the equipment's annual review cycle.
Monitoring of the fund minimizes significant year-end adjustments for any particular piece of
equipment.
2.14 Surplus of Equipment
Public Works is responsible for disposing of surplus equipment. The Road Maintenance
Manager is responsible for preparing equipment for surplus and managing the surplus
process. The surplus value of equipment is returned to Fund 106 (Road Fund) or to the Fund
of equipment origin.
3.0 EQUIPMENT RENTAL AND REVOLVING CENTRAL STORES
3.1 Staff Time Reporting
All time reporting by staff will be posted to the appropriate accounting codes (job accounting
system), division, and department. All equipment is tracked for expense within the
department's accounting software and assigned individual numbers.
3.2 Inventory Charges
Inventory shall be charged out, including cost plus overhead associated with managing the
inventory, to the appropriate vehicle, equipment, division, or department. Corrections from
prior year charges for equipment that was either overly profitable or took a loss, the additional
gain/loss will be calculated in the following year's rental rate.
3.3 Bidding
Fund 501 strives to consolidate ordering, properly bid out purchases, and keep the
vendor list to a minimum. Where possible, attempts will be made to use state contracts
Page 7 of 10
or other approved procurement methods meeting state law requirements.
3.4 Accounting
Fund 501 will strive to keep monthly voucher counts and accounting workload as low as
possible. Annually, the Public Works Director will confer with the Finance Manger
ensuring proper annual overhead rates are being assessed to all Fund 501 assets.
3.5 Consolidated Ordering
When there is a cost or labor savings, centralized shop ordering for both shops to Fund 501
will be considered.
4.0 FUEL
4.1 Fuel Charges
Fuel will be charged against the vehicle or equipment at cost from vendor invoicing.
4.2 Competitive Prices
Fund 501 will pursue bid procedures or piggyback onto already bid contracts for fuel, fuel
delivery, and service contracts to secure competitive price and service.
4.3 Fuel Card Limitations
Renting departments shall use fuel cards for Fund 501 vehicles only and not for personal
use. Fund 501 shall maintain an accurate fuel card inventory.
4.4 County Fuel Credit Cards
Fuel purchases for Fund 501 vehicles other than at County fuel depots will be made with
County fuel credit cards. Cash or personal credit card purchases are strongly discouraged, as
federal fuel taxes are assessed and not reclaimable. County fuel credit cards are available for
use for extended trips.
5.0 MECHANIC SHOP
5.1 Shop Rates
Shop rates will be set based on wages, benefits, shop supplies, environmental surcharges,
training, utility fees, indirect costs, and overhead. Shop rates will be reviewed and adjusted
annually as necessary.
5.2 Outsourcing
Outsourcing will be used when necessary and cost-effective as determined by the Designated
Division Manager.
5.3 Vehicle/Equipment Maintenance
Page 8 of 10
The user department and the equipment or vehicle user shall be responsible for delivering
vehicle or equipment to the shop for regular scheduled maintenance and/or repair service.
Public Works utilizes various equipment management software to track use, expenses, and
associated costs to prioritize replacement needs.
5.4 Broken Down Vehicle/Equipment
When a vehicle or a piece of equipment is broken down or cannot be safely brought in for
service by the user, the user shall contact the Designated Division Manager or the maintenance
shop, and they will arrange for pickup or service in the field.
5.5 Misuse/Abuse
Any service or repair outside of routine service or regular repairs, determined to be the result
of misuse and/or abuse of the vehicle or equipment by the renting department, will be
reviewed by the Designated Division Manager and the renting department to determine if
additional charges for the work will be assessed to the renting department or if the life span
will be extended to cover repair costs.
5.6 Renter Responsibility
The renting department is responsible for protecting the finishes of the vehicle or equipment,
other than normal wear and tear, and to use the vehicle or equipment in the most appropriate
manner to protect its useful life. Cosmetic repairs may be charged directly to the renting
department outside of the regular rental rate. The fund Designated Division Manager will
review repairs and cost estimate(s) with the renting department.
6.0 PITS AND QUARRIES
6.1 Unit Prices
Unit prices for fund aggregates will be established to recover the annual costs of permits,
stormwater controls, pit reclamation, required testing, and pit management operations and
will be adjusted annually if/as necessary to meet these costs.
6.2 Rates for Manufactured Products
Rates for manufactured products will be established based on unit contract prices, stockpile
costs, and appropriate indirect costs and overhead. The fund Designated Division Manager
will review this, along with product needs, with the County Engineer before establishing
the rates each year.
6.3 Future Pit Operations
Rates for products are not set to collect additional funds for future pit operations, only
management of the pits and existing products.
Page 9 of 10
6.4 Storage
Storage of road equipment and supplies will be allowed as long as they meet the pit permit and
management requirements. Road crews will coordinate their use of pits with the Designated
Division Manager. The Road Maintenance Manager shall be responsible for security and
ongoing cleanup and organization of the pit and quarry sites.
7.0 SIGN FABRICATION SHOP
Expenses are charged directly to the Road Fund and transferred out of Fund 501
inventory. For fabrication to entities other than the Road Fund, the Road Fund will
bill the entity cost plus overhead.
8.0 FACILITY RENTAL AND CONSTRUCTION
8.1 Facility Space Rental Rate
A facility space rental rate will be established to recover the costs of supplies, utilities, and
general maintenance of existing structures. All Fund 501 facility assets will develop rental rates
specific to each asset. It is anticipated that useful life assignments are highly variable and will
be determined using input from various Public Works Designated Division managers in concert
with the Public Works Director.
8.2 Shop Rental Rate
The shop rental rate does not include collection of funds to replace structures or make
improvements or alterations to them. The rate will include all associated operational
costs.
8.3 Cost Distribution
Fund 501 Designated Division Manager and the Road Fund Manager (County Engineer) will
determine appropriate cost distribution for facility rental, crew laundry costs, medical supply
costs, operating supplies, and cleaning of the spaces, so that items are charged against the all -
fund users.
9.0 FINANCE DEPARTMENT FUND 501 DATA PROCESSING
9.1 The Finance Manager shall develop appropriate business practices ensuring cost capture, data
capture and processing as it impacts annual equipment rental rate development.
Page 10 of 10