At the March 19 committee of the whole meeting, chief financial officer Mallory Denniston, reporting on the sale, said her report that day to councillors was supplemental to one presented in December 2023, which provided information on Powell River Fire Rescue’s pumper truck fleet.
“Through that [December] meeting it was directed to staff to sell the asset using the most profitable method feasible, with net proceeds transferred to the vehicle and equipment reserve,” said Denniston.
She said she wanted to follow up with council regarding the process the city undertook. Given all the options to sell a major asset, staff found a closed bid posted on BC Bid to be the most profitable because there was no commission, she added.
“We set the minimum at $1 million, which would have profited $150,000 on the truck,” said Denniston. “After having the bid open for five weeks, it was closed and awarded to the highest bidder, which was $1.15 million, which is $150,000 more than we had budgeted.
“The sale of the pumper truck produced a net gain of about $300,000. I don’t know if I’ll ever again report on a depreciable asset making money.”
Denniston said the vehicle equipment reserve will have a $150,000 higher balance than had been budgeted. Equipment costs have increased in the city’s five-year financial plan, notably around the ladder truck that needs replacing, she added.
“That reserve is not at the minimum target balance,” said Denniston. “It’s not a rich reserve by any means and so this is very welcome news.”
Councillor George Doubt said it is good that the city made more money on the sale, but in the meantime, how much is the price of the next fire truck going up?
Denniston said staff undertook a net present value analysis of the two options and there was consideration to keeping the truck because the price had gone up significantly. She said the net present value of the scenario where the city sells the truck, it doesn’t need to buy another one for six years, and the net present value is higher in that scenario.
“We have inflation increasing the price of things but we have interest rates earning us money on our reserve to be used to buy the truck, so in the end, it was more favourable to do it this way,” said Denniston.
Doubt asked if the next pumper truck would be needed six years from now. Denniston said the ladder truck was in the budget for 2025 and in six years, a new pumper truck would be needed.
Councillor Cindy Elliott asked if there were any fees associated with the sale. Denniston said the fire chief went to the site to show the truck to potential bidders, and a procurement specialist was also paid, which would be less than $1,000.
“Our alternative was a 10 per cent commission through anything else,” said Denniston.
According to a staff report, council approved the purchase of a new pumper truck in the 2018 capital budget as part of the replacement plan. The truck was ordered in February 2022 and delivered in November 2023.
It was determined that given the increasing pumping capacity of existing equipment, the equipment replacement plan no longer needed a new pumper truck to satisfy the fire underwriter ratings standard and the fire truck was deemed a surplus asset.
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