Deal to lease City of Charlottetown vehicles from off-Island firm comes under fire
Charlottetown officials say they'll save substantially by not tendering locally
The City of Charlottetown has signed a new deal to lease all of its vehicles from an international fleet management company, sidestepping local dealers.
The city says the move will save taxpayers thousands of dollars.
But some city councillors, and a group representing local car dealerships, are not buying that argument. On Monday night, the councillors asked that city staff take a second look at the deal to make sure all the costs and impacts are known.
Coun. Mitchell Tweel says city hall pushed through a deal without knowing all the facts. He said he's not convinced the city will see all the savings it's promising.
"We hear so much about supporting local [businesses] — 'we want to support our local, within reason, not at all cost,'" said Tweel. "I wasn't comfortable with it and that's why I said no."
'It's an excellent deal'
Local dealership owners packed into a meeting last summer when city hall first started discussion with Enterprise Fleet Management.
The deal was approved by a 4-3 vote in a special meeting of council on Aug. 23, 2021. (Councillors Terry MacLeod, Terry Bernard, Kevin Ramsay and Mike Duffy voted for the motion; Councillors Bob Doiron, Julie McCabe, and Mitchell Tweel were opposed; and Councillors Greg Rivard, Jason Coady and Alanna Jankov were absent. Mayor Philip Brown votes only in the case of a tie.)
The city is now leasing its vehicles, rather than purchasing them through a public tendering process. The first order has now been placed for 19 new vehicles, and the city said the savings will be substantial.
Coun. Bernard said it's a great deal for the city.
"I think it's an excellent deal for the City of Charlottetown, for the taxpayers of Charlottetown, the savings are substantial, the vehicles are purchased through local and the maintenance on them is done through local so to me it's a win-win situation," said Bernard.
"Optics doesn't matter to me, it's the facts that matter to me. The facts are that we are buying local, they ordered the last vehicles, they are getting the mark-up and the City of Charlottetown is seeing the savings that are significant."
City officials, for example, said last year the city purchased a Dodge half-ton 4X4 for $64,930. This year, it leased a Ford half-ton 4X4 for $49,822, a savings of $14,958.
Dealers' association 'disappointed'
CBC News reached out to a number of dealerships on the Island to seek comment. Three expressed concern about the deal, but would not go on the record, preferring to let their association speak for them.
The P.E.I. Automobile Dealers Association also wouldn't do an interview, but in a statement, it said it was "disappointed that the City of Charlottetown has made a decision to change the open tender process and is moving to working with an off-Island company to acquire fleet vehicles, rather than working directly with local automobile dealerships, where they would be guaranteed the best price."
Lisa Doyle-MacBain, the executive director of the association, told councillors that Enterprise orders directly through the manufacturer. She noted that local dealerships will receive what's called a "pass-through fee," but said that doesn't even cover the costs associated with the process, which includes a motor vehicle inspection, pre-delivery inspection, and putting gas in the tank.
Doyle-McBain said the pass-through fee ranges from $200 to $400 depending on the manufacturer.
'Working directly with local dealerships'
For its part, Enterprise Fleet Management said it works with hundreds of local governments.
"By partnering with Enterprise Fleet Management, the City of Charlottetown is estimated to realize a cost savings of more than $1.8 million over 10 years compared to the current fleet strategy," Alex Reby, Enterprise Fleet Management director, Eastern Canada, said in a statement to CBC News.
"Enterprise Fleet Management is working directly with local dealerships on P.E.I. to order and deliver vehicles. In addition, vehicle maintenance repairs will be made at local dealerships and body shops in the community."
The issue touched off a fiery exchange between Coun. Rivard and Stephen MacFadyen, the city's public works superintendent.
"My issue really boils down to what was told to us in the council chambers, that there was going to be no impact to the dealerships," said Rivard.
"That information is false so all the hurt feelings you want, the point is that we were told that nothing would happen and that the association was happy."
'My integrity is being questioned'
MacFadyen said he has "no reason to mislead anybody."
"I was disappointed Coun. Rivard to hear that you implied that we were lying to you," said MacFadyen, during the public council meeting earlier this week.
"You can disagree whether you like the proposal or not. I certainly don't like the fact that my integrity is being questioned."
City council has asked staff for more details.
The first 19 vehicles have been ordered through Enterprise but the city said given the global supply issues, delivery times have not been confirmed.