Ballooning truck costs make things unattainable

The rising costs for trucks came through vividly during a recent Woodlands County meeting. A tender was put out previously for the purchase of five three-quarter-ton pickups. Three bids came in, with the lowest bid being $68,000 per truck. “In 2019, when we bought out last trucks, with pretty much the same configuration, we paid $38,000 (per truck). When we did further research, it was identified that, given the supply and demand of trucks right now that government discounts are not available, which is quite a large number per unit,” explained Director of Infrastructure Andre Bachand.

He said they looked into leasing vehicles for a year rather than purchasing. “Leasing of a truck came in at roughly $35,000, and that’s for a two-year-old truck. When we looked into it a bit more, the dealers are forecasting that next year the supply of vehicles will be more favourable. Based on that, Administration is recommending that Council rejects all bids received for the 2022 Pickup Truck Tender. We will re-budget for vehicles in 2023, and we will get through the next year with our current fleet.” Bachand said he had been discussing with CAO Gordon Frank about his work vehicle potentially going back into the operations fleet.

Councillor Peter Kuelken was struck by the difference of $30,000 and said it spoke to the procurement policy at Woodlands County. He said there should have been a quote sought out ahead of the tender to see what pricing was like rather than relying on information from two years ago. “There should have been a quote prior to budget time, so we understood this better. Now, we extend ourselves into the fact that we are looking at repurposing one of those trucks for the Fort Assiniboine Fire Department, so that changes a whole bunch of things within your management spectrum. The question I would ask of you is, why did it get to this point? We were basically making budget decisions on trucks that were bought two years ago, and we know that that changes dramatically.”

Bachand said they could only predict the future to a certain degree. “I don’t think anybody predicted the supply chain issue even when we were preparing the budget in September of last year. There were indications that the chip shortages, which was one of the major factors (of) why vehicles were behind, was being resolved and wouldn’t be an issue and things continued to be delayed to a certain degree. We do our best when we are preparing things in September and looking at the future. We reached out to certain companies, but we didn’t anticipate (this). Usually, there are vehicle allowances for the government, which is now gone away, and we didn’t even anticipate that. We assumed that was going to continue.”

Councillor Kuelken said he agreed with the recommendation presented to reject the tenders but felt that the procurement policy needed to be changed. “Obviously, this is a reoccurring issue under procurement, so if we can solve that problem, for budget purposes the next time around, then we aren’t faced with making these big decisions because we all know that the environment changes rather dramatically. I think for the purposes of both helping Administration deal with this and us as Council getting into, what I see as, administrative decision-making, that we have a little closer idea than two years which is what it says here, being the procurement be as current as possible.”

Mayor John Burrows said this issue was something they had been looking at for a while now. “We see the price of natural gas going up, the price of oil going up, price of gasoline going up, and energy across the board is going up. We have supply chain issues, we have worker shortages, and a partridge in a pear tree,” he said, ending with a slight chuckle shared by his colleagues. “These are pretty unprecedented times on the economics side, and this is one of the things that I really worry about going into this particular year. That’s why I actually wanted to make a recommendation that we have a look at our budget and how these factors are going to affect the entire budget so that we are ahead of it. This is definitely our warning sign.”

The three tenders received were Eagle River Chrysler, Curtesy Chrysler, and Leduc Chrysler. The funding total budgeted in the 2022 Capital Budget for purchasing trucks was $250,000. From Eagle River Chrysler, the lowest tender was $341,067.21, more than ninety thousand over Woodlands County’s budget. Council voted unanimously to reject the tenders. They will re-budget for trucks next year.