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Enterprise may run county fleet

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news Detroit Lakes, 56501
Detroit Lakes Minnesota 511 Washington Avenue 56501

Easing into the transition, the Becker County Board plans to move forward and work with Enterprise to build its motor fleet instead of taking care of county vehicles in-house.

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The move would save the county money and headaches.

Wong Nystrom, Enterprise fleet consultant who specializes in non-profits and government agencies, told commissioners Tuesday that Becker County is certainly not the guinea pig for this program. Several counties throughout the state use Enterprise, including Clay, Douglas, Hennepin, Grant and Polk counties.

Though known as a car rental company, Enterprise has been providing motor fleets to other entities for many years.

Nystrom said that Becker County could “operate new vehicles for less,” and that he wasn’t asking for extra money, just the existing budget.

The county now spends more than $1 million a year on fleet expenses that include new vehicles, repairs and mileage reimbursement.

What would happen is the county will sell off its existing vehicles and replace them with vehicles through Enterprise. Enterprise researches the best vehicle for the job and then the county “leases” the vehicle from Enterprise.

Nystrom explained that a typical lease that most people know about is called a closed-end lease, where someone leases a personal vehicle for 24-36 months from a dealership and at the end of the lease gives the vehicles back to the dealership.

This would be a commercial open-end lease, which Enterprise also calls finance-to-own, where there are no penalties for the county to get out of the lease and usually after five years, the county would sell the vehicle and put the equity it toward the lease of a new vehicle.

Nystrom said that the county would own the vehicles, not Enterprise, which is the big difference between the two types of leases.

And when it comes time to sell those vehicles, Enterprise takes care of that as well.

If the relationship with Enterprise should end, the county would own the vehicle and just have to pay Enterprise for the remainder of the lease. He said there is no contract, so the county could “fire” Enterprise tomorrow if it wanted.

He said that local repair shops are used for maintenance and local car dealerships are used for delivering the new vehicles.

Enterprise tracks each vehicle in the fleet — the company doesn’t provide frontline squad cars and ambulances, though — so if a certain vehicle is having a lot of problems, it can be sold and replaced earlier than the usual five years.

The vehicles are also tracked because Enterprise charges the county about 32 cents per mile for the vehicle. That pays for the lease, insurance, maintenance — everything from oil changes and wiper blades to transmission replacement up to seven years or 100,000 miles — everything with the vehicle.

Nystrom assured the commissioners that the board has the final decision on everything, from which vehicles to purchase to where they are maintained. Enterprise simply does the research and gives them the options.

He also said the county could purchase vehicles outright instead of leasing them, but the county could buy about two cars for the same price as leasing 10 of them.

Going into the Enterprise program, the county would sell off its vehicles and use that money to start the new fleet through Enterprise. Nystrom said he has taken an inventory of the county’s vehicles and they range in value. Some would bring decent money for the county, and some, he said aren’t worth the effort to even sell them. He recommended donating some because one, for example, has a value of about $250.

“Your fleet is not in good shape compared to other counties,” he said.

He said the county could to start by switching just a handful of vehicles, rather than do all the vehicles at once, because there would be a rotating cycle.

With a roster of about 40 vehicles and switching out seven to eight vehicles a year, “after five years, you’d have a healthy fleet,” he said.

“I like the staging of it,” Commissioner Barry Nelson said.

 County Administrator Jack Ingstad and Nystrom will continue to work out the details and have a solid plan for the commissioners at the next meeting, Sept. 9.

“It seems like this is the perfect fit,” Ingstad said.

Follow Pippi Mayfield on Twitter at @PippiMayfield.

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