Cibolo’s plan to purchase a new piece of construction equipment hit a roadblock last week when City Council tabled a motion to make a $60,000 down payment, in light of economic uncertainty surrounding the coronavirus pandemic.
“With the state of everything that’s going on, I don’t believe we should be going forward with making big purchases like this,” Councilman Steve Quinn said during the council’s April 14 teleconference meeting. “Why can’t we push this out a couple of months, to see where we stand as a city?”
Council was discussing the lease purchase of a 2019 Ford F450 cab and chassis with an Altec 235 35-foot height bucket body — a “bucket truck,” as they are often referred to. The truck’s bucket lift allows workers to change street light bulbs, cut tree limbs, and install traffic signals, among other work duties.
The city originally contracted with a firm in August 2019 for the vehicle, only to have that order fall through.
Tim Fousse, Cibolo director of public works and capital projects, told council that the firm Enterprise Fleet Management has a vehicle available immediately. The city would have to put $60,000 down toward the deal, and then pay $813 per month for 60 months as a lease, after which time they would own the vehicle.
The coronavirus pandemic has shuttered businesses nationwide, and Cibolo is no exception. Sales tax revenue reports have not yet been released to show the impact of the stay-at-home orders that went into effect in March and extended this month.
Quinn questioned posting a $60,000 down payment when the city has no data on what impact the pandemic has had to the city budget.
“I don’t think we need to be putting $60,000 down toward this vehicle right now. I think we should have more of a freeze on what we are spending, and buy things only on an emergency-based need,” he said. “Two to three months down the road we can relook at this. But to go spend $60,000 right now, I don’t think is fiscally responsible for us.”
City Manager Robert Herrera said city staff continues to analyze the fiscal situation on a regular basis.
“I feel a little bit better about our sales tax (situation). While we’re dependent on it, we’re not as heavily dependent on it as other cities,” Herrera said.
“If the economy worsens, it probably wouldn’t be a good idea to go out for long-term debt because we could lose our rating, especially with the potential loss of sales tax,” he said. “Building permit activity slowed down, which could be a very negative trend for us.”
Fousse described how the city currently performs the duties a bucket truck would address. Wasted prep time and obvious safety issues are the primary motivators to seek the bucket truck.
Mayor Stosh Boyle affirmed the safety issue, saying anyone who has ever been “up in a cherry picker 40 feet off the ground knows” the risks involved.
Councilman Ted Gibbs said the purchase will alleviate the city’s current leasing situation. Cibolo spent $6,408 in the past 18 months renting equipment to perform the job, sometimes paying as much as $700 a week when used at length.
Councilman Tim Woliver asked Herrera and Fousse if the city could make some money on the bucket truck during the five-year leasing period.
“If we lease-to-own it, while we are in the lease period, are we allowed to sublease it out to somebody else and recoup money that way?” Woliver asked. “And has anybody asked Enterprise if there’s any way to defer that lump-sum payment, ask to negotiate that. Can we hold it off for a while, and still enter into the lease?”
Herrera said those were valid questions and council members agreed. Instead of delaying the purchase as Quinn suggested earlier, council voted unanimously to table the item until next month.
Bringing the issue back at a later date allows the city to ask the questions posed by Woliver and other council members. Herrera said the city will have received its first sales tax revenue reports by then, which will allow the city to start assessing the sales tax revenue damage inflicted by the shutdown.